Registration Nos. 333-72590
811-6217
Fiscal Year End December 31
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
OF SECURITIES OF UNIT
INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
PRE-EFFECTIVE AMENDMENT NO. 1
POST-EFFECTIVE AMENDMENT NO.
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MONY VARIABLE ACCOUNT L
(Exact Name of Trust)
MONY LIFE INSURANCE COMPANY
(Name of Depositor)
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1740 Broadway
New York, New York 10019
(Address of Principal Executive Office)
HAROULA K. BALLAS, ESQ.
Counsel, Operations
MONY Life Insurance Company
1740 Broadway
New York, New York 10019
(Name and Address of Agent for Service)
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Approximate date of proposed public offering: It is proposed that this
filing will become effective: (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[_] on pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(l)
[_] on pursuant to paragraph (a)(l) of rule 485.
If appropriate, check the following box:
[_]this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
TITLE OF SECURITIES BEING REGISTERED: Flexible Premium Variable Universal
Life Insurance Policies
Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
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STATEMENT PURSUANT TO RULE 24f-2
The Registrant registers an indefinite number or amount of its variable life
insurance contracts under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940.
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CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption in Prospectus
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1 Cover Page
2 Cover Page
3 Not Applicable
4 DISTRIBUTION OF THE POLICY
5 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
6 Variable Account L
7 Not required
8 Not required
9 Legal Proceedings
10 THE POLICY; INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT;
CHARGES AND DEDUCTIONS; OTHER INFORMATION; VOTING OF FUND SHARES;
MORE ABOUT THE POLICY
11 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE FUNDS;
PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT
12 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE FUNDS;
PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT
13 THE POLICY; CHARGES AND DEDUCTIONS; THE FUNDS
14 THE POLICY
15 THE POLICY
16 THE FUNDS; THE POLICY; INFORMATION ABOUT THE COMPANY AND THE
VARIABLE ACCOUNT
17 THE POLICY
18 THE FUNDS; THE POLICY; INFORMATION ABOUT THE COMPANY AND THE
VARIABLE ACCOUNT
19 VOTING OF FUND SHARES; MORE ABOUT THE POLICY
20 Not applicable
21 THE POLICY
22 Not applicable
23 Not applicable
24 IMPORTANT POLICY TERMS; MORE ABOUT THE POLICY
25 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
26 Not applicable
27 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
28 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
29 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
30 Not applicable
31 Not applicable
32 Not applicable
33 Not applicable
34 Not applicable
35 MORE ABOUT THE POLICY
36 Not applicable
37 Not applicable
Item No. of
Form N-8B-2 Caption in Prospectus
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38 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; MORE
ABOUT THE POLICY
39 MORE ABOUT THE POLICY
40 Not applicable
41 MORE ABOUT THE POLICY
42 Not applicable
43 Not applicable
44 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY;
MORE ABOUT THE POLICY
45 Not applicable
46 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY;
MORE ABOUT THE POLICY
47 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY;
MORE ABOUT THE POLICY
48 Not applicable
49 Not applicable
50 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
51 Cover Page; INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT;
THE POLICY; MORE ABOUT THE POLICY
52 OTHER INFORMATION
53 OTHER INFORMATION
54 Not applicable
55 Not applicable
56 Not required
57 Not required
58 Not required
59 FINANCIAL STATEMENTS
2
PART I
(INFORMATION REQUIRED IN A PROSPECTUS)
Prospectus
Dated January 14, 2002
Variable Universal Life Insurance Policy
MONY Life Insurance Company (the "Company") issues a variable universal life
insurance policy described in this Prospectus. Among the policy's many terms
are:
Allocation of Premiums and Cash Values:
. You can tell us what to do with your premium payments. You can also tell us
what to do with the cash values your policy may create for you resulting from
those premium payments.
. You can tell us to place them into a separate account. That separate
account is called MONY Variable Account L.
. If you do, you can also tell us to place your premium payments and fund
values into any of the 35 different subaccounts of MONY Variable Account
L. Each of these subaccounts seeks to achieve a different investment
objective. If you tell us to place your premium payments and cash values
into one or more subaccounts of the separate account, you bear the risk
that the investment objectives will not be met. That risk includes your
not earning any money on your premium payments and cash values and also
that your premium payments and cash values may lose some or all of their
value. The loss of value will result in the need to make additional
premium payments.
. You can also tell us to place some or all of your premium payments and
cash values into our account. Our account is called the Guaranteed
Interest Account. If you do, we will guarantee that those premium payments
and cash values will not lose any value. We also guarantee that we will
pay not less than 4.5% interest annually. We may pay more than 4.5% if we
choose. Premium payments and cash values you place into the Guaranteed
Interest Account become part of our assets.
Death Benefit:
. We will pay a death benefit if you die before you reach age 100 while the
policy is in effect. That death benefit will never be less than amount
specified in the policy. It may be greater than the amount specified if the
policy's cash values increase.
Living Benefits:
. You may ask for some or all of the policy's cash value at any time. If you
do, we may deduct a surrender charge. You may borrow up to 90% of the
policy's cash value from us at any time. You will have to pay interest to us
on the amount borrowed.
Charges and Fees:
. The policy allows us to deduct certain charges from the cash value. These
charges are detailed in the policy and in this prospectus.
These are only some of the terms of the policy.
Please read the prospectus carefully for more complete details of the policy.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense. This prospectus comes with prospectuses for The Alger
American Fund, Enterprise Accumulation Trust, INVESCO Variable Investment
Funds, Inc., Janus Aspen Series, Lord Abbett Series Fund, MFS(R) Variable
Insurance Trust/SM/, MONY Series Fund, Inc., PBHG Insurance Series Fund, PIMCO
Variable Insurance Trust and The Universal Institutional Funds, Inc. You should
read these prospectuses carefully and keep them for future reference.
MONY Variable Account L
MONY Life Insurance Company
1740 Broadway, New York, New York 10019
1-800-487-6669
TABLE OF CONTENTS
Page
----
Summary of the Policy............................................. 1
Important Policy Terms........................................... 1
Purpose of the Policy............................................ 1
Policy Premium Payments and Values............................... 1
Charges and Deductions........................................... 3
Fees and Expenses of the Funds................................... 3
The Death Benefit................................................ 9
Premium Features................................................. 10
MONY Variable Account L.......................................... 10
Allocation Options............................................... 10
Transfer of Fund Value........................................... 10
Policy Loans..................................................... 11
Full Surrender................................................... 11
Partial Surrender................................................ 11
Right to Return Policy Period.................................... 11
Grace Period and Lapse........................................... 11
Tax Treatment of Increases in Fund Value......................... 12
Tax Treatment of Death Benefit................................... 12
Riders........................................................... 12
Contacting the Company........................................... 12
Understanding the Policy......................................... 13
Detailed Information About the Company and MONY Variable Account L 14
MONY Life Insurance Company...................................... 14
MONY Variable Account L.......................................... 14
The Funds......................................................... 20
The Algier American fund......................................... 20
Enterprise Accumulation Trust.................................... 21
INVESCO Variable Investment Funds, Inc........................... 23
Janus Aspen Series............................................... 23
Lord Abbett Series Fund.......................................... 23
MFS(R) Variable Insurance Trust/SM/.............................. 24
MONY Series Fund, Inc............................................ 24
PBHG Insurance Series Fund....................................... 25
PIMCO Variable Insurance Trust................................... 25
The Universal Institutional Funds, Inc........................... 26
Purchase of Portfolio Shares by MONY Variable Account L.......... 26
Detailed Information About the Policy............................. 27
Application for a Policy......................................... 27
Right to Examine a Policy -- Right to Return Policy Period....... 29
Premiums......................................................... 29
Allocation of Net Premiums....................................... 31
Death Benefits under the Policy.................................. 31
Changes in Specified Amount...................................... 33
Other Optional Insurance Benefits................................ 34
Benefits at Maturity............................................. 35
Policy Values.................................................... 36
Determination of Fund Value...................................... 36
Calculating Unit Values for Each Subaccount...................... 37
Determining Fund Value........................................... 38
Transfer of Fund Value........................................... 39
i
Page
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Right to Exchange Policy.................................. 39
Option to Obtain Paid-Up Insurance........................ 39
Policy Loans.............................................. 40
Full Surrender............................................ 41
Partial Surrender......................................... 41
Grace Period and Lapse.................................... 42
Charges and Deductions..................................... 45
Deductions from Premiums.................................. 46
Daily Deduction from MONY Variable Account L.............. 46
Guarantee of Certain Charges.............................. 49
Other Information.......................................... 50
Federal Income Tax Considerations......................... 50
Charge for Company Income Taxes........................... 54
Voting of Fund Shares..................................... 54
Disregard of Voting Instructions.......................... 55
Report to Policy Owners................................... 55
Substitution of Investments and Right to Change Operations 55
Changes to Comply with Law................................ 56
Performance Information.................................... 56
The Guaranteed Interest Account............................ 57
General Description....................................... 57
Death Benefit............................................. 58
Policy Charges............................................ 58
Transfers................................................. 58
Surrenders and Policy Loans............................... 58
More About the Policy...................................... 59
Ownership................................................. 59
Beneficiary............................................... 59
Notification and Claims Procedures........................ 59
Payments.................................................. 60
Payment Plan/Settlement Provisions........................ 60
Payment in Case of Suicide................................ 60
Assignment................................................ 60
Errors on Application..................................... 61
Incontestability.......................................... 61
Policy Illustrations...................................... 61
Distribution of the Policy................................ 61
More About the Company..................................... 62
Management................................................ 62
State Regulation.......................................... 64
Telephone Transfer Privileges............................. 64
Legal Proceedings......................................... 65
Legal Matters............................................. 65
Registration Statement.................................... 65
Independent Accountants................................... 65
Financial Statements...................................... 65
Index to Financial Statements.............................. F-1
Appendix A................................................. A-1
Appendix B................................................. B-1
Appendix C................................................. C-1
ii
SUMMARY OF THE POLICY
This summary provides you with a brief overview of the more important
aspects of your policy. It is not intended to be complete. More detailed
information is contained in this prospectus on the pages following this Summary
and in your policy. This summary and the entire prospectus will describe the
part of the policy involving MONY Variable Account L. The prospectus also
briefly will describe the Guaranteed Interest Account on page 53. The
Guaranteed Interest Account is also described in your policy. Before purchasing
a policy, we urge you to read the entire prospectus carefully.
Important Policy Terms
We are providing you with definitions for the following terms to make the
description of the policy provisions easier for you to understand.
Outstanding Debt -- The unpaid balance of any loan which you request on the
policy. The unpaid balance includes accrued loan interest which is due and has
not been paid by you.
Loan Account -- An account to which amounts are transferred from the
subaccounts of MONY Variable Account L and the Guaranteed Interest Account as
collateral for any loan you request. We will credit interest to the Loan
Account at a rate not less than 4.5%. The Loan Account is part of the Company's
General Account.
Fund Value -- The sum of the amounts under the policy held in each
subaccount of MONY Variable Account L the Guaranteed Interest Account, and the
Loan Account.
Cash Value -- The Fund Value of the policy less any surrender charge and any
Outstanding Debt.
Minimum Monthly Premium -- The amount the Company determines is necessary to
keep the policy in effect for the first three policy years. In certain cases,
this also applies to the first three policy years following an increase in the
Specified Amount.
Guaranteed Interest Account -- This account is part of the general account
of MONY Life Insurance Company (the "Company"). You may allocate all or a part
of your net premium payments to this account. This account will credit you with
a fixed interest rate (which will not be less than 4.5%) declared by the
Company. (For more detailed information, see "The Guaranteed Interest Account,"
page 53.)
Specified Amount -- The minimum death benefit for as long as the policy
remains in effect.
Business Day -- Each day that the New York Stock Exchange is open for
trading.
Purpose of the Policy
The policy offers insurance protection on the life of the insured. If the
insured is alive on the anniversary of the policy date when the insured is age
100, a maturity benefit will be paid instead of a death benefit. The policy
provides a death benefit equal to (a) its Specified Amount, or (b) its
Specified Amount plus accumulated Fund Value. The policy also provides
surrender and loan privileges. The policy offers a choice of investment
alternatives and an opportunity for the policy's Fund Value and its death
benefit, to grow based on investment results. In addition, you, as owner of the
policy, choose the amount and frequency of premium payments, within certain
limits.
Policy Premium Payments and Values
The premium payments you make for the policy are received by the Company.
From those premium payments, the Company makes deductions to pay premium and
other taxes imposed by state and local
1
governments. The Company makes deductions to cover the cost to the Company of a
deferred acquisition tax imposed by the United States government. The Company
will also deduct a Sales Charge to cover the costs of making the policies
available to the public. After deduction of these charges, the amount remaining
is called the net premium payment.
You may allocate net premium payments among the various subaccounts of MONY
Variable Account L and/or the Guaranteed Interest Account. As owner of the
policy, you may give the right to allocate net premium payments to someone else.
The net premium payments you allocate among the various subaccounts of MONY
Variable Account L may increase or decrease in value on any day depending on
the investment experience of the subaccounts you select. Your death benefit may
or may not increase or decrease depending on several factors including the
death benefit option you choose. The death benefit will never decrease below
the Specified Amount of your policy.
Net premium payments you allocate to the Guaranteed Interest Account will be
credited with interest at a rate determined by the Company. That rate will not
be less than 4.5%.
The value of the net premium payments you allocate to MONY Variable Account
L and to the Guaranteed Interest Account are called the Fund Value. There is no
guarantee that the policy's Fund Value and death benefit will increase. You
bear the risk that the net premiums and Fund Value allocated to MONY Variable
Account L may be worth more or less while the policy remains in effect.
If you cancel the policy and return it to the Company during the Right to
Return Period, your premium payments will be returned by the Company. After the
Right to Return Period, you may cancel your policy by surrendering it to the
Company. The Company will pay you the Fund Value minus a charge if you cancel
your policy during the first fifteen years since the policy was issued or the
Specified Amount increased. The Company will also deduct any amount you have
borrowed from it from the amount it will pay you. The Fund Value minus
Surrender Charges and minus the amount of debt outstanding from loans you have
received is called the Cash Value of the policy.
Charges and fees such as the cost of insurance, administrative charges, and
mortality and expense risk charges are imposed by the policy. These charges and
fees are deducted by the Company from the policy's Cash Value and are described
in further detail below.
The policy remains in effect until the earliest of:
. A grace period expires without the payment of sufficient additional
premium to cover policy charges or repayment of the Outstanding Debt.
. Age 100.
. Death of the insured.
. Full surrender of the policy.
Generally, the policy remains in effect only as long as the Cash Value is
sufficient to pay all monthly deductions. However, during the first three years
the policy is in effect, the Company will determine an amount which if paid
during those first three policy years will keep the policy and all rider
coverages in effect for the first three policy years even if the Cash Value of
the policy is zero. This amount is called the Minimum Monthly Premium. If you
increase the Specified Amount during the first three policy years, you must pay
the Minimum Monthly Premium for three more years after the increase.
2
Charges and Deductions
The policy provides for the deduction of the various charges, costs, and
expenses from the Fund Value of the policy. These deductions are summarized in
the table below. Additional details can be found on pages 42-46.
Deductions from Premiums
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Sales Charge -- Varies based on Specified Amount Specified Amounts less than $500,000 --
plus Term Life Term Rider amount in effect. It is a 4% Policy Years 1-10
% of Premium paid. 1% Policy Years 11 and after
Specified Amounts of $500,000 or more --
2% Policy Years 1-10
0.5% Policy Years 11 and after
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Tax Charge State and local -- 0.8%
Federal -- 1.25%
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Daily Deduction from MONY Variable Account L
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Mortality & Expense Risk Charge -- Maximum 0.65% of subaccount value (0.001781% daily)
Annual Rate
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Deductions from Fund Value
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Cost of Insurance Charge Current cost of insurance rate x net amount at risk at
the beginning of the policy month
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Administrative Charge -- monthly $5.00
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Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the first 10
Based on issue age, gender and smoking Status. policy years (or for 10 years from the date of any
increase in Specified Amount)
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Optional Insurance Benefits Charge As applicable.
Monthly Deduction for any other Optional
Insurance Benefits added by rider.
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Transaction and Other Charges
- - Partial Surrender Fee $10
- - Transfer of Fund Value $25 maximum per transfer over 12/(1)/
(at Company's Option)
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Surrender Charge See discussion of Surrender Charge on page 44 for
Grades from 80% to 0 over 15 years based on a grading schedule.
schedule. Factors per $1,000 of Specified Amount
vary based on issue age, gender, and underwriting
class.
/(1)/Currently no charge on any transfers.
MONY Variable Account L is divided into subdivisions called subaccounts.
Each subaccount invests exclusively in shares of a designated portfolio. Each
portfolio pays a fee to its investment adviser to manage the portfolio. Each
portfolio also incurs expenses in its operation. These fees and expenses are
also shown in the table below.
Fees and Expenses of the Funds
The Funds and each of their portfolios incur certain charges including the
investment advisory fee and certain operating expenses. These fees and expenses
vary by portfolio and are set forth below. Their Boards govern the Funds. The
advisory fees are summarized at pages 5-8. Fees and expenses of the Funds are
described in more detail in the Funds' prospectuses.
3
Information contained in the following table was provided by the respective
Funds and has not been independently verified by us.
Annual Expenses for the Year Ended December 31, 2000
(as a percentage of average net assets)
Distribution and
Management Other Service (12-b-1) Total
Fund/Portfolio Fees Expenses Fee Expenses
-------------- ---------- -------- ---------------- --------
The Alger American
Fund
Alger American
Balanced Portfolio............ 0.75% 0.13% 0% 0.88%
Alger American
MidCap Growth
Portfolio..................... 0.80% 0.04% 0% 0.84%
Enterprise
Accumulation
Trust/(1)/
Equity Income
Portfolio..................... 0.75% 0.13% 0% 0.88%
Global Socially
Responsive
Portfolio/(2)/................ 0.90% 0.40% 0% 1.30%
Growth Portfolio................ 0.75% 0.08% 0% 0.83%
Growth and Income
Portfolio..................... 0.75% 0.10% 0% 0.85%
Managed Portfolio............... 0.80% 0.02% 0% 0.82%
Multi-Cap Growth
Portfolio..................... 1.00% 0.10% 0% 1.10%
Small Company
Growth Portfolio.............. 1.00% 0.11% 0% 1.11%
Small Company Value
Portfolio..................... 0.80% 0.09% 0% 0.89%
Total Return
Portfolio/(2)/................ 0.40% 0.25% 0% 0.65%
___________________
/(1)/Enterprise Capital Management, Inc. has contractually agreed to limit the
portfolios' expenses through May 1, 2002, to the following expense ratios: Equity
Income -- 1.05%; Global Socially Responsive -- 1.30%; Growth -- 1.15%; Growth and
Income -- 1.05%; Managed -- 1.05%; Multi-Cap Growth -- 1.40% Small Company Growth
-- 1.40%; Small Company Value -- 1.30% and Total Return -- 0.65%.
/(2)/The Global Socially Responsive and Total Return Portfolios were not in
operation on December 31, 2000. These are estimates of annual expenses.
INVESCO Variable
Investment Funds,
Inc.
INVESCO VIF --
Financial
Services Fund................. 0.75% 0.34% 0% 1.09%
INVESCO VIF --
Health Sciences
Fund.......................... 0.75% 0.32% 0% 1.07%
INVESCO VIF --
Telecommunications
Fund.......................... 0.75% 0.31% 0% 1.06%
Janus Aspen Series
- -- Service Shares
Capital
Appreciation
Portfolio..................... 0.65% 0.02% 0.25% 0.92%
Flexible Income
Portfolio..................... 0.65% 0.09% 0.25% 0.99%
International
Growth Portfolio.............. 0.65% 0.06% 0.25% 0.96%
Lord Abbett Series
Fund -- Class VC
Bond-Debenture
Portfolio..................... 0.50% 0.35% 0% 0.85%
Growth and Income
Portfolio/(1)/................ 0.50% 0.53% 0% 1.03%
Mid-Cap Value
Portfolio/(2)/................ 0.75% 0.35% 0% 1.10%
___________________
/(1)/Excludes expense waivers. With these waivers total Expenses would have been
1.02%.
/(2)/The Mid Cap Value Portfolio has established a non-12b-1 service fee arrangement
which is reflected under "Other Expenses." For the following reasons, the
information in the chart above relating to the Mid Cap Value Portfolio has been
restated to reflect the fees and expenses that will be applicable during 2001.
For the year 2000, Lord, Abbett & Co. voluntarily waived its management fees of
0.75% of average daily net assets of the Mid Cap Value Portfolio and voluntarily
reimbursed all other expenses. Absent such waivers and reimbursements the "Total
Expenses" for Mid-Cap Value would have been 1.56%. For the year 2001, Lord,
Abbett & Co. does not intend to waive its management fees for the Mid Cap Value
Portfolio but has contractually agreed to continue to reimburse a portion of the
Mid Cap Value Portfolio's expenses to the extent necessary to maintain its "Other
Expenses" at an aggregate of 0.35% of its average daily net assets.
4
Annual Expenses for the Year Ended December 31, 2000
(as a percentage of average net assets)
Distribution and
Management Other Service (12-b-1) Total
Fund/Portfolio Fees Expenses Fee Expenses
-------------- ---------- -------- ---------------- --------
MFS(R) Variable
Insurance
Trust/SM(1) /--
Initial Class
MFS Mid Cap Growth
Series/(2)/....... 0.75% 0.15% 0% 0.90%
MFS New Discovery
Series/(2)/....... 0.90% 0.15% 0% 1.05%
MFS Total Return
Series............ 0.75% 0.15% 0% 0.90%
MFS Utilities Series 0.75% 0.16% 0% 0.91%
- ----------
/(1)/Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with
its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the series' expenses. "Other Expenses" do
take into account these expense reductions, and are therefore lower than the
actual expenses of the series. Had these fee reductions not been taken into
account, "Total Expenses" would be higher for certain series and would
equal: 2.21% for Mid Cap Growth Series; 1.09% for New Discovery Series;
0.90% for Total Return Series; and 0.91% for Utilities Series.
/(2)/MFS has contractually agreed, subject to reimbursement, to bear expenses
for these series such that each such series' "Other Expenses" (after taking
into account the expense offset arrangement described above), do not exceed
the following percentages of the average daily net assets of the series
during the current fiscal year: 0.15% for both Mid Cap Growth and New
Discovery Series. These contractual fee arrangements will continue until at
least May 1, 2002, unless changed with the consent of the board of trustees
which oversees the series.
MONY Series Fund,
Inc./(1)/
Government
Securities
Portfolio........ 0.50% 0.11% 0% 0.61%
Long Term Bond
Portfolio/(2)/... 0.50% 0.10% 0% 0.60%
Money Market
Portfolio........ 0.40% 0.07% 0% 0.47%
- ----------
/(1)/MONY Life Insurance Company of America has contractually agreed to limit
expenses on these portfolios to the following amounts: Long Term Bond --
0.75%; Government Securities -- 0.75%; Money Market -- 0.50% . This
contractual limitation is in effect until April 30, 2002.
/(2)/Excludes expense reimbursements/reductions. With these
reimbursements/reductions total expenses would have been 0.59%
PBHG Insurance
Series Fund
PBHG Mid-Cap Value
Portfolio........ 0.85% 0.35% 0% 1.20%
PBHG Select Value
Portfolio........ 0.65% 0.32% 0% 0.97%
- ----------
1) For the fiscal year ended December 31, 2001, Pilgrim Baxter has
contractually agreed to waive that portion, if any, of the annual management
fees payable by the portfolios and to pay certain expenses of the portfolios
to the extent necessary to ensure that the total annual portfolio operating
expenses do not exceed 1.20% and 1.00% for the Mid-Cap Value Portfolio and
the Select Value Portfolio, respectively. Without these expense waivers,
"Other Expenses" and "Total Expenses" for the Mid-Cap Value Portfolio would
have been 3.32% and 4.52%, respectively. Pilgrim Baxter has agreed to
maintain this expense limitation agreement until December 31, 2002. In any
fiscal year in which the portfolios' total assets are greater than $75
million and its total annual portfolio operating expenses are less than
1.20% and 1.00% for the Mid-Cap Value Portfolio and the Select Value
Portfolio, respectively, the portfolios' board of trustees may elect to
reimburse Pilgrim Baxter for any fees it waived or expenses it reimbursed on
the portfolios' behalf during the previous two fiscal years. In 2000, the
board elected to reimburse $36,853 in waived fees, which are included in the
calculation of "Other Expenses" above for the Select Value Portfolio. At the
time of the election, the Portfolio had total assets in excess of $93
million. To date, the board has made no reimbursement election for the
Mid-Cap Value Portfolio.
5
Annual Expenses for the Year Ended December 31, 2000
(as a percentage of average net assets)
Distribution and
Management Other Service (12-b-1) Total
Fund/Portfolio Fees Expenses Fee Expenses
-------------- ---------- -------- ---------------- --------
PIMCO Variable
Insurance Trust --
AdministrativeClass
Global Bond
Portfolio/(1)/... 0.25% 0.65% 0% 0.90%
Real Return Bond
Portfolio........ 0.25% 0.40% 0% 0.65%
StocksPLUS Growth
and Income
Portfolio/(1)/... 0.40% 0.25% 0% 0.65%
- ----------
/(1)/PIMCO has contractually agreed to reduce total annual portfolio operating
expenses for the Administrative Class shares to the extent they would
exceed, due to the payment of organizational expenses and trustees' fees,
0.65% of average daily net assets for the StockPLUS Growth and Income
Portfolio and 0.90% of average daily net assets for the Global Bond
Portfolio. Under the Expense Reimbursement Agreement, PIMCO may recoup these
waivers and reimbursements in future periods, not exceeding three years,
provided total expenses, including such recoupment, do not exceed the annual
expense limit. Without these expense limitations actual expenses would have
been 0.66% for the the StockPlus Portfolio and 1.18% for the Global Bond
Portfolio.
The Universal Institutional Funds, Inc./(1)/
Emerging Markets Equity Portfolio................ 1.25% 0.71% 0% 1.96%
Global Value Equity Portfolio.................... 0.80% 0.63% 0% 1.43%
U.S. Real Estate Portfolio....................... 0.80% 0.36% 0% 1.16%
- ----------
/(1)/The Adviser has voluntarily agreed to reduce its management fee and/or
reimburse the portfolios to the amounts shown. With these reimbursements
and/or fee waivers the total expenses would have been 1.80%, 1.15% and 1.10%
for the Emerging Markets Equity Portfolio, Global Value Equity Portfolio,
U.S. Real Estate Portfolio, respectively. Fee waivers and/or expense
reimbursements are voluntary and the advisor reserves the right to terminate
any waiver and/or reimbursement at any time without notice.
6
Fund Investment Adviser Fees
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The Alger American Fund
- -----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- -----------------------------------------------------------------------------------------
Alger American Balanced Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio Annual rate of 0.80% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Enterprise Accumulation Trust
- -----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- -----------------------------------------------------------------------------------------
Equity Income Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Global Socially Responsive Portfolio Annual rate of 0.90% of the portfolio's average
daily net assets.
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Growth Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
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Growth and Income Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Managed Portfolio Annual rate of 0.80% of the first $400 million,
0.75% of the next $400 million, and 0.70% in
excess of $800 million of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Multi-Cap Growth Portfolio Annual rate of 1.00% of the portfolio's average
daily net assets.
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Small Company Growth Portfolio Annual rate of 1.00% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
Small Company Value Portfolio Annual rate of 0.80% of the portfolio's average
daily net assets.
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Total Return Portfolio Annual rate of 0.40% of the portfolio's average
daily net assets.
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INVESCO Variable Investment Funds, Inc.
- -----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- -----------------------------------------------------------------------------------------
INVESCO VIF - Financial Services Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
INVESCO VIF - Health Sciences Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
INVESCO VIF - Telecommunications Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------------
7
Janus Aspen Series
- --------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- --------------------------------------------------------------------------------
Capital Appreciation Portfolio Annual rate of 0.65% of the portfolio's average
daily net assets.
- --------------------------------------------------------------------------------
Flexible Income Portfolio Annual rate of 0.65% of the first $300 million;
and 0.55% in excess of $300 million of the
portfolio's average daily net assets.
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International Growth Portfolio Annual rate of 0.65% of the portfolio's average
daily net assets.
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Lord Abbett Series Fund
- --------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- --------------------------------------------------------------------------------
Bond-Debenture Portfolio Annual rate of 0.50% of the portfolio's average
daily net assets.
- --------------------------------------------------------------------------------
Growth and Income Portfolio Annual rate of 0.50% of the portfolio's average
daily net assets.
- --------------------------------------------------------------------------------
Mid-Cap Value Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
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MFS(R) Variable Insurance Trust/SM/
- --------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- --------------------------------------------------------------------------------
MFS Mid Cap Growth Series Annual rate of 0.75% of the portfolio's average
daily net assets.
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MFS New Discovery Series Annual rate of 0.90% of the portfolio's average
daily net assets.
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MFS Total Return Series Annual rate of 0.75% of the portfolio's average
daily net assets.
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MFS Utilities Series Annual rate of 0.75% of the portfolio's average
daily net assets.
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MONY Series Fund, Inc.
- --------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- --------------------------------------------------------------------------------
Government Securities Portfolio Annual rate of 0.50% of the first $400 million,
0.35% of the next $400 million, and 0.30% in
excess of $800 million of the portfolio's
aggregate average daily net assets.
- --------------------------------------------------------------------------------
Long Term Bond Portfolio Annual rate of 0.50% of the first $400 million,
0.35% of the next $400 million, and 0.30% in
excess of $800 million of the portfolio's
aggregate average daily net assets.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Money Market Portfolio Annual rate of 0.40% of the first $400 million,
0.35% of the next $400 million, and 0.30% in
excess of $800 million of the portfolio's
aggregate average daily net assets.
- --------------------------------------------------------------------------------
8
PBHG Insurance Series Fund
- ----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- ----------------------------------------------------------------------------------------
PBHG Mid-Cap Value Portfolio Annual rate of 0.85% of the portfolio's average
daily net assets.
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PBHG Select Value Portfolio Annual rate of 0.65% of the portfolio's average
daily net assets.
- ----------------------------------------------------------------------------------------
PIMCO Variable Insurance Trust//
- ----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- ----------------------------------------------------------------------------------------
Global Bond Portfolio Annual rate of 0.25% of the portfolio's average
daily net assets.
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Real Return Bond Portfolio Annual rate of 0.25% of the portfolio's average
daily net assets.
- ----------------------------------------------------------------------------------------
StocksPLUS Growth and Income Portfolio Annual rate of 0.40% of the portfolio's average
daily net assets.
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The Universal Institutional Funds, Inc.
- ----------------------------------------------------------------------------------------
Portfolio Investment Adviser Fee
- ----------------------------------------------------------------------------------------
Emerging Markets Equity Portfolio Annual rate of 1.25% of the first $500 million;
1.20% from $500 million to $1 billion; and
1.15% in excess of $1 billion of the portfolio's
average daily net assets.
- ----------------------------------------------------------------------------------------
Global Value Equity Portfolio Annual rate of 0.80% of the first $500 million;
0.75% from $500 million to $1 billion; and
0.70% in excess of $1 billion of the portfolio's
average daily net assets.
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
U. S. Real Estate Portfolio Annual rate of 0.80% of the first $500 million;
0.75% from $500 million to $1 billion; and
0.70% in excess of $1 billion of the portfolio's
average daily net assets.
The Death Benefit
The minimum initial Specified Amount is $50,000. You may elect one of two
options to compute the amount of death benefit payable under the policy. Your
selection may increase the death benefit.
Option 1 -- The death benefit equals the greater of:
(a)The Specified Amount, or
(b)Fund Value multiplied by a death benefit percentage required by the
federal tax law definition of life insurance.
If you choose Option 1, favorable investment performance will reduce the
cost you pay for the death benefit. This reduction will decrease the
deduction from Fund Value and
Option 2 -- The death benefit equals the greater of:
(a) The Specified Amount of the policy, plus the Fund Value, or
9
(b) The Fund Value multiplied by a death benefit percentage required by
the federal tax law definition of life insurance.
If you choose Option 2, favorable investment performance will increase the
Fund Value of the Policy which in turn increases insurance coverage.
The Fund Value used in these calculations is the Fund Value as of the date
of the insured's death.
You may change the death benefit option and increase or decrease the
Specified Amount, subject to certain conditions. See "Death Benefits Under the
Policy," page 29.
Premium Features
You must pay premiums equal to at least the amount necessary to keep the
policy in effect for the first three policy years. After that, subject to
certain limitations, you may choose the amount and frequency of premium
payments as your financial situation and needs change.
When you apply for a policy, you determine the level amount you intend to
pay at fixed intervals over a specified period of time. You elect to receive a
premium notice on an annual, semiannual, or quarterly basis. However, you may
choose to skip or stop making premium payments and your policy will continue in
effect until the Cash Value can no longer cover (1) the monthly deductions from
the Fund Value for your policy, and (2) any optional insurance benefits added
by rider. You may pay premiums under the electronic funds transfer program.
Under this program, you authorize the Company to withdraw the amount you
determine from your checking account each month.
The amount, frequency and period of time over which you pay premiums may
affect whether or not the policy will be classified as a modified endowment
contract. You will find more information on the tax treatment of life insurance
contracts, including modified endowment contracts under "Federal Income Tax
Considerations," page 46.
The payment of premiums you specified on the application will not guarantee
that your policy will remain in effect. See "Grace Period and Lapse," page 40.
If any premium payment would result in an immediate increase in the net amount
at risk, the Company may, (1) reject a part of the premium payment, or (2)
limit the premium payment, unless you provide satisfactory evidence of
insurability.
MONY Variable Account L
MONY Variable Account L is a separate investment account whose assets are
owned by the Company. See "MONY Variable Account L" on page 12.
Allocation Options
You may allocate premium payments and Fund Values among the various
subaccounts of MONY Variable Account L. Each of the subaccounts uses premium
payments and Fund Values to purchase shares of a designated portfolio of The
Alger American Fund, Enterprise Accumulation Trust, INVESCO Variable Investment
Funds, Inc., Janus Aspen Series, Lord Abbett Series Fund, MFS(R) Variable
Insurance Trust/SM/, MONY Series Fund, Inc., PBHG Insurance Series Fund, PIMCO
Variable Insurance Trust, and The Universal Institutional Funds, Inc. The
subaccounts available to you and the investment objectives of each available
subaccount are described in detail beginning on page 13.
Transfer of Fund Value
You may transfer Fund Value among the subaccounts. Subject to certain
limitations, you may also transfer between the subaccounts and the Guaranteed
Interest Account. Transfers may be made by telephone if the proper
10
form has been completed, signed and filed at the Company's Syracuse Operations
Center. See "Transfer of Fund Value," page 36.
Policy Loans
You may borrow up to 90% of your policy's Cash Value from the Company. Your
policy will be the only security required for a loan. See "Policy Loans," page
37.
The amount of Outstanding Debt is subtracted from your death benefit. Your
Outstanding Debt is repaid from the proceeds of a full surrender. See "Full
Surrender," page 39. Outstanding Debt may also affect the continuation of the
policy. See "Grace Period and Lapse," page 40. The Company charges interest on
policy loans. If you do not pay the interest when due, the amount due will be
borrowed from the policy's Cash Value and will become part of the Outstanding
Debt.
Full Surrender
You can surrender the policy during the insured's lifetime and receive its
Cash Value, which equals (a) Fund Value, minus (b) any surrender charge, and
minus (c) any Outstanding Debt. See "Full Surrender," page 39.
Partial Surrender
You may request a partial surrender if your Cash Value after the deduction
of the requested surrender amount and any fees is greater than $500. If the
requested amount exceeds the amount available, we will reject your request and
return it to you. A partial surrender may decrease the Specified Amount or will
decrease the death benefit. See "Partial Surrender," at page 39.
Partial surrenders must be for at least $500. A partial surrender fee of $10
will be assessed against the remaining Fund Value. There is no surrender charge
assessed on a partial surrender.
Right to Return Policy Period
You have the right to examine the policy when you receive it. You may return
the policy for any reason and obtain a full refund of the premium you paid if
you return your policy the later of: (a) 10 days (or longer in some states)
after you receive it; (b) 45 days after the date you sign the application for
the policy or (c) 10 days after we mail or deliver a notice of withdrawal
right. During the Right to Return Policy Period, net premiums will be kept in
the general account of the Company and will earn interest at an annual rate of
4.5%. See "Right to Examine a Policy -- Right to Return Policy Period," page 26.
Grace Period and Lapse
Your policy will remain in effect as long as:
(1) it has a Cash Value greater than zero; or
(2) during the first three policy years if on each monthly anniversary
the sum of the premiums paid minus the sum of partial surrenders (excluding
related fees) and any Outstanding Debt, is greater than or equal to the
Minimum Monthly Premium times the number of months your policy has been in
effect.
If you increase the Specified Amount during the first three policy years,
the minimum premium requirement will be increased and the time period will
be extended for an additional three policy years from the date of the
increase.
If the policy is about to terminate (or Lapse), we will give you notice that
you must pay additional premiums. That notice will tell you what the minimum
amount you must pay is if the policy is to remain in effect and the date by
which we must receive that amount (this period is called the "grace period").
11
You must understand that after the first three policy years, the policy can
lapse even if the scheduled premium payments are made.
Tax Treatment of Increases in Fund Value
The federal income tax laws generally tie the taxation of Fund Values to
your receipt of those Fund Values. This policy is currently subject to the same
federal income tax treatment as fixed life insurance. Certain policy loans may
be taxable. You can find information on the tax treatment of the policy under
"Federal Income Tax Considerations," on page 46.
Tax Treatment of Death Benefit
Generally, the death benefit will be fully excludable from the gross income
of the beneficiary under the Internal Revenue Code. Thus the death benefit
received by the beneficiary at the death of the insured will not be subject to
federal income taxes when received by the beneficiary. Also a death benefit
paid by this policy is currently subject to federal income tax treatment as a
death benefit paid by a fixed life insurance policy. See "Federal Income Tax
Considerations," page 46.
Riders
Additional optional insurance benefits may be added to the policy by an
addendum called a rider. As applicable a charge is deducted monthly from Fund
Value for each optional benefit added to your policy. There are six riders
available with this policy:
. Spouse's Term Rider
. Children's Term Insurance Rider
. Accidental Death and Dismemberment Rider
. Purchase Option Rider
. Term Life Term Insurance Rider
. Waiver of Monthly Deductions Rider
Riders are available only in states where approval has been received.
Contacting the Company
All written requests, notices, and forms required by the policies, and any
questions or inquiries should be directed to the Company's Operations Center at
1 MONY Plaza, Syracuse, New York 13202.
12
Understanding the Policy
The following chart may help you to understand how the policy works.
[FLOW CHART]
13
DETAILED INFORMATION ABOUT THE COMPANY
AND MONY VARIABLE ACCOUNT L
MONY Life Insurance Company
MONY Life Insurance Company issues the policy. In this prospectus MONY Life
Insurance Company is called the "Company." The Company is a stock life
insurance company organized in the State of New York. The Company is currently
licensed to sell life insurance and annuities in all 50 states of the United
States, the District of Columbia, the U.S. Virgin Islands, and Puerto Rico.
The principal office of the Company is located at 1740 Broadway, New York,
New York 10019. The Company was founded in 1842 as The Mutual Life Insurance
Company of New York. In 1998, The Mutual Life Insurance Company of New York
converted to a stock company through demutualization and was renamed MONY Life
Insurance Company. The demutualization did not have any material effect on the
obligations of the Company under the policies or on MONY Variable Account L.
On August 16, 1999, the rating assigned to the Company by A.M. Best Company,
Inc., an independent insurance company rating organization, was upgraded to A
(Excellent). This rating is based upon an analysis of financial condition and
operating performance. The A.M. Best rating of the Company should be considered
only as bearing on the ability of the Company to meet its obligations under the
policies.
The Company intends to administer the policies itself.
MONY Securities Corporation, a wholly owned subsidiary of the Company, is
the principal underwriter for the policies.
MONY Variable Account L
MONY Variable Account L is a separate investment account of the Company.
Presently, only premium payments and cash values of flexible premium variable
life insurance policies are permitted to be allocated to MONY Variable Account
L. The assets in MONY Variable Account L are kept separate from the general
account assets and other separate accounts of the Company.
The Company owns the assets in MONY Variable Account L. The Company is
required to keep assets in MONY Variable Account L that equal the total market
value of the policy liabilities funded by MONY Variable Account L. Realized or
unrealized income gains or losses of MONY Variable Account L are credited or
charged against MONY Variable Account L assets without regard to the other
income, gains or losses of the Company. Reserves and other liabilities under
the policies are assets of MONY Variable Account L. MONY Variable Account L
assets are not chargeable with liabilities of the Company's other businesses.
Fund Values of the policy during the Right to Return Period and Fund Values
allocated to the Guaranteed Interest Account are held in the Company's general
account. The Company's general account assets are subject to the liabilities
from the businesses the Company conducts. In addition, the Company may transfer
to its general account any assets that exceed anticipated obligations of MONY
Variable Account L. All obligations of the Company under the policy are general
corporate obligations of the Company. The Company may accumulate in MONY
Variable Account L proceeds from various policy charges and investment results
applicable to those assets.
MONY Variable Account L was authorized by the Board of Directors of the
Company and established under New York law on November 28, 1990. MONY Variable
Account L is registered with the SEC as a unit investment trust. The SEC does
not supervise the administration or investment practices or policies of MONY
Variable Account L.
14
MONY Variable Account L is divided into subdivisions called subaccounts.
Each subaccount invests exclusively in shares of a designated portfolio of the
Funds. For example, the Long Term Bond Subaccount invests solely in shares of
the MONY Series Fund, Inc. Long Term Bond Portfolio. These portfolios serve
only as the underlying investment for variable annuity and variable life
insurance contracts issued through separate accounts of the Company or other
life insurance companies. The portfolios may also be available to certain
pension accounts. The portfolios are not available directly to individual
investors. In the future, the Company may establish additional subaccounts
within MONY Variable Account L. Future subaccounts may invest in other
portfolios of the Funds or in other securities. Not all subaccounts are
available to you.
The following table lists the subaccounts of MONY Variable Account L that
are available to you, their respective investment objectives, and which Fund
portfolio shares are purchased:
Subaccount and Designated Portfolio Investment Objective
- -----------------------------------------------------------------------------------------------------------
Alger American Balanced Subaccount Seeks current income and long-term capital
appreciation. The portfolio focuses on stocks of
This subaccount purchases shares of The Alger companies with growth potential and fixed income
American Fund Alger American Balanced securities, with emphasis on income-producing
Portfolio. securities which appear to have some potential for
capital appreciation. Under normal circumstances,
the portfolio invests in common stocks and fixed-
income securities, which include commercial paper
and bonds rated within the 4 highest rating
categories by an established rating agency or if not
rated, which are determined by the Manager to be
of comparable quality. Ordinarily, at least 25% of
the Portfolio's net assets are invested in fixed-
income securities.
- -----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Subaccount Seeks long-term capital appreciation. The portfolio
focuses on midsize companies with promising
This subaccount purchases shares of The Alger growth potential. Under normal circumstances, the
American Fund Alger American MidCap Growth portfolio invests primarily in the equity securities of
Portfolio. companies having a market capitalization within the
range of companies in the S&P MidCap 400(TM)
Index.
- -----------------------------------------------------------------------------------------------------------
Enterprise Equity Income Subaccount Invests in a combination of growth and income.
Seeks to achieve an above average and consistent
This subaccount purchases shares of the Enterprise total return, primarily from investments in dividend
Accumulation Trust Equity Income Portfolio. paying U.S. common stocks.
- -----------------------------------------------------------------------------------------------------------
Enterprise Global Socially Responsive Seeks total return primarily from investments in
Subaccount common stocks of companies that the portfolio
manager believes are socially responsive and that
This subaccount purchases shares of the Enterprise are located in countries that are included in the
Accumulation Trust Global Socially Responsive MSCI World Index.
Portfolio.
- -----------------------------------------------------------------------------------------------------------
Enterprise Growth Subaccount Seeks capital appreciation, primarily from
investments in U.S. common stocks of large
This subaccount purchases shares of the Enterprise capitalization companies. Pursues goal by investing
Accumulation Trust Growth Portfolio. in companies with long-term earnings potential, but
which are currently selling at a discount to their
estimated long-term value.
15
Subaccount and Designated Portfolio Investment Objective
- ---------------------------------------------------------------------------------------------------------
Enterprise Growth and Income Subaccount Seeks total return through capital appreciation with
income as a secondary consideration by investing in
This subaccount purchases shares of the Enterprise a broadly diversified group of U.S. common stocks
Accumulation Trust Growth and Income Portfolio. of large capitalization companies.
- ---------------------------------------------------------------------------------------------------------
Enterprise Managed Subaccount Seeks growth of capital over time by investing in a
portfolio consisting of common stocks, bonds and
This subaccount purchases shares of the Enterprise cash equivalents, the percentages of which vary
Accumulation Trust Managed Portfolio. over time based on the investment manager's
assessment of economic and market trends and its
perception of the relative investment values
available from such types of securities at any given
time.
- ---------------------------------------------------------------------------------------------------------
Enterprise Multi-Cap Growth Subaccount Seeks long-term capital appreciation by primarily
investing in growth stocks. Companies will tend to
This subaccount purchases shares of the Enterprise fall into one of two categories: companies that offer
Accumulation Trust Multi-Cap Growth Portfolio. goods or services to a rapidly expanding
marketplace or companies experiencing a major
change that is expected to produce advantageous
results.
- ---------------------------------------------------------------------------------------------------------
Enterprise Small Company Growth Subaccount Seeks capital appreciation by investing primarily in
common stocks of small capitalization companies
This subaccount purchases shares of the Enterprise believed by the portfolio manager to have an
Accumulation Trust Small Company Growth outlook for strong earnings growth and potential for
Portfolio. significant capital appreciation.
- ---------------------------------------------------------------------------------------------------------
Enterprise Small Company Value Subaccount Seeks maximum capital appreciation by investing
primarily in common stocks of small capitalization
This subaccount purchases shares of the Enterprise companies that the portfolio manager believes are
Accumulation Trust Small Company Value undervalued -- that is the stock's market price does
Portfolio. not fully reflect the company's value.
- ---------------------------------------------------------------------------------------------------------
Enterprise Total Return Subaccount Seeks total return primarily from investments in a
diversified portfolio of fixed income instruments of
This subaccount purchases shares of the Enterprise varying maturities.
Accumulation Trust Total Return Portfolio.
- ---------------------------------------------------------------------------------------------------------
INVESCO VIF -- Financial Services Subaccount Seeks to provide capital growth by investing
primarily in equity securities of companies involved
This subaccount purchases shares of the INVESCO in the financial services sector.
Variable Investment Funds, Inc. INVESCO VIF --
Financial Services Fund.
- ---------------------------------------------------------------------------------------------------------
INVESCO VIF -- Health Sciences Subaccount Seeks to provide capital growth by investing
primarily in equity securities of companies that
This subaccount purchases shares of the INVESCO develop, produce or distribute products or services
Variable Investment Funds, Inc. INVESCO VIF -- related to health care.
Health Sciences Fund.
16
Subaccount and Designated Portfolio Investment Objective
- --------------------------------------------------------------------------------------------------------
INVESCO VIF -- Telecommunications Seeks to provide capital growth and current income
Subaccount by investing primarily in the equity securities of
companies involved in the design, development,
This subaccount purchases shares of the INVESCO manufacture, distribution, or sale of
Variable Investment Funds, Inc. INVESCO VIF -- communications services and equipment, and
Telecommunications Fund. companies that are involved in supplying equipment
or services to such companies. Will invest primarily
in companies located in at least three different
countries, although U.S. issuers will often dominate
the portfolio.
- --------------------------------------------------------------------------------------------------------
Janus Aspen Series Capital Appreciation Seeks long-term growth of capital. It pursues its
Subaccount objective by investing primarily in common stocks
selected for their growth potential. The portfolio
This subaccount purchases shares of Janus Aspen may invest in companies of any size, from larger,
Series Capital Appreciation Portfolio. well-established companies to smaller, emerging
growth companies.
- --------------------------------------------------------------------------------------------------------
Janus Aspen Series Flexible Income Subaccount Seeks to obtain maximum total return, consistent
with preservation of capital. It pursues its objective
This subaccount purchases shares of the Janus by investing primarily in a wide variety of income-
Aspen Series Flexible Income Portfolio. producing securities such as corporate bonds and
notes, government securities and preferred stock.
As a fundamental policy, the portfolio will invest at
least 80% of its assets in income-producing
securities. The portfolio may own an unlimited
amount of high-yield/high-risk bonds.
- --------------------------------------------------------------------------------------------------------
Janus Aspen Series International Growth Seeks long-term growth of capital. It pursues its
Subaccount objective by investing at least 65% of its total assets
in securities of issuers from at least five different
This subaccount purchases shares of the Janus countries, excluding the United States. Although the
Aspen Series International Growth Portfolio. portfolio intends to invest substantially all of its
assets in issuers located outside the United States it
may at times invest in U.S. issuers and it may at
times invest all of its assets in fewer than five
countries, or even a single country.
- --------------------------------------------------------------------------------------------------------
Lord Abbett Bond-Debenture Subaccount Investment Objective and Strategy: seeks high
current income and the opportunity for capital
This subaccount purchases shares of the Lord appreciation to produce a high total return. It
Abbett Series Fund Bond-Debenture Portfolio. pursues its objective by investing in high yield and
investment grade debt securities, securities
convertible into common stock and preferred
stocks. The portfolio invests at least 65% of its total
assets in fixed income securities of various types.
At least 20% of the portfolio's assets must be
invested in any combination of investment grade
securities, U.S. Government securities and cash
equivalents.
- --------------------------------------------------------------------------------------------------------
17
Subaccount and Designated Portfolio Investment Objective
- ------------------------------------------------------------------------------------------------------------
Lord Abbett Growth and Income Subaccount Investment Objective and Strategy: seeks long-term
growth of capital and income without excessive
This subaccount purchases shares of the Lord fluctuations in market value. It pursues its objective
Abbett Series Fund Growth and Income Portfolio. by investing at least 65% of its total assets in large,
seasoned, U.S. and multinational companies.
- ------------------------------------------------------------------------------------------------------------
Lord Abbett Mid-Cap Value Subaccount Investment Objective and Strategy: seeks capital
appreciation. It pursues its objective by investing at
This subaccount purchases shares of the Lord least 65% of its total assets in equity securities of
Abbett Series Fund Mid-Cap Value Portfolio. mid-sized companies, with market capitalizations of
roughly $500 million to $10 billion.
- ------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Subaccount Seeks long-term growth of capital by investing at
least 65% of its total assets in companies with
This subaccount purchases shares of the MFS(R) medium market capitalization which are defined as
Variable Insurance Trust/SM/ MFS Mid Cap Growth companies with market capitalizations equaling or
Series. exceeding $250 million but not exceeding the top of
the Russell Midcap(TM) Growth Index range at the
time of purchase by the portfolio.
- ------------------------------------------------------------------------------------------------------------
MFS New Discovery Subaccount Seeks capital appreciation by investing at least 65%
of its total assets in equity securities of emerging
This subaccount purchases shares of the MFS(R) growth companies. Emerging growth companies are
Variable Insurance Trust/SM/ MFS New Discovery companies that are either: early in their life cycle
Series. but which have the potential to become major
enterprises or major enterprises whose rates of
earnings growth are expected to accelerate because
of special factors, such as rejuvenated management,
new products, changes in consumer demand, or
basic changes in the economic environment.
- ------------------------------------------------------------------------------------------------------------
MFS Total Return Subaccount Seeks mainly to provide above-average income
consistent with the prudent employment of capital
This subaccount purchases shares of the MFS(R) and secondarily to provide a reasonable opportunity
Variable Insurance Trust/SM/ MFS Total Return for growth of capital and income. It pursues its
Series. objective by investing at least 40%, but not more
than 75%, of its net assets in common stocks and
related securities and at least 25% of its net assets in
non-convertible fixed income securities.
- ------------------------------------------------------------------------------------------------------------
MFS Utilities Subaccount Seeks capital growth and current income by
investing at least 65% of its total assets in equity
This subaccount purchases shares of the MFS(R) and debt securities of domestic and foreign
Variable Insurance Trust/SM/ MFS Utilities Series. companies (including emerging markets) in the
utilities industry.
- ------------------------------------------------------------------------------------------------------------
MONY Government Securities Subaccount Seeks to maximize income and capital appreciation
by investing in bonds, notes and other obligations
This subaccount purchases shares of the MONY either issued or guaranteed by the U.S.
Series Fund, Inc. Government Securities Portfolio. Government, its agencies or instrumentalities,
together having a weighted average maturity of
between 4 to 8 year.
- ------------------------------------------------------------------------------------------------------------
18
Subaccount and Designated Portfolio Investment Objective
- -------------------------------------------------------------------------------------------------------------
MONY Long Term Bond Subaccount Seeks to maximize income and capital appreciation
over the longer term by investing in highly-rated
This subaccount purchases shares of the MONY fixed income securities issued by a diverse mix of
Series Fund, Inc. Long Term Bond Portfolio. corporations, the U.S. Government and its agencies
or instrumentalities, as well as mortgage-backed
and asset-backed securities together having a dollar-
weighted average maturity of more than 8 years.
- -------------------------------------------------------------------------------------------------------------
MONY Money Market Subaccount Seeks to maximize current income consistent with
preservation of capital and maintenance of liquidity
This subaccount purchases shares of the MONY by investing primarily in high quality, short-term
Series Fund, Inc. Money Market Portfolio. money market instruments.
- -------------------------------------------------------------------------------------------------------------
Morgan Stanley Universal Institutional Seeks long-term capital appreciation by investing
Emerging Markets Equity Subaccount primarily in growth-oriented equity securities of
issuers in emerging market countries.
This subaccount purchases shares of The Universal
Institutional Funds, Inc. Emerging Markets Equity
Portfolio.
- -------------------------------------------------------------------------------------------------------------
Morgan Stanley Universal Institutional Global Seeks long-term capital appreciation by investing
Value Equity Subaccount primarily in equity securities of issuers throughout
the world, including U.S. issuers.
This subaccount purchases shares of The Universal
Institutional Funds, Inc. Global Value Equity
Portfolio.
- -------------------------------------------------------------------------------------------------------------
Morgan Stanley Universal Institutional U.S. Real Seeks to provide above average current income and
Estate Subaccount long-term capital appreciation by investing
primarily in equity securities of companies in the
This subaccount purchases shares of The Universal U.S. real estate industry, including real estate
Institutional Funds, Inc. U. S. Real Estate Portfolio. investment trusts ("REITs").
- -------------------------------------------------------------------------------------------------------------
PBHG Mid-Cap Value Subaccount Seeks to provide above-average total return over a 3
to 5 year market cycle by primarily investing in
This subaccount purchases shares of the PBHG value common stocks of companies with market
Insurance Series Fund PBHG Mid-Cap Value capitalizations within the range of the S&P
Portfolio. MidCap 400(TM) Index.
- -------------------------------------------------------------------------------------------------------------
PBHG Select Value Subaccount Seeks to provide long-term growth of capital and
income by primarily investing in value common
This subaccount purchases shares of the PBHG stocks of no more than 30 companies with large
Insurance Series Fund PBHG Select Value market capitalizations. Current income is a
Portfolio. secondary objective.
- -------------------------------------------------------------------------------------------------------------
PIMCO Global Bond Subaccount Seeks to maximize total return, consistent with
preservation of capital, by investing primarily in
This subaccount purchases shares of the PIMCO Fixed Income Instruments of issuers located in at
Variable Insurance Trust Global Bond Portfolio. least three countries (one of which may be the
United States).
- -------------------------------------------------------------------------------------------------------------
19
Subaccount and Designated
Portfolio Investment Objective
- ---------------------------------------------------------------------------------
PIMCO Real Return Bond
Subaccount Seeks to maximize real return, consistent with
preservation of real capital, by investing primarily
This subaccount purchases in inflation-indexed bonds of varying maturities
shares of the PIMCOVariable issued by the U.S. and non-U.S. governments, their
Insurance Trust Real Return agencies or government-sponsored enterprises and
BondPortfolio. corporations.
- ---------------------------------------------------------------------------------
PIMCO StocksPLUS Growth and Seeks total return which exceeds the total return of
IncomeSubaccount the S&P 500 by investing primarily in S&P 500
derivatives, backed by a portfolio of Fixed Income
This subaccount purchases Instruments.
shares of the PIMCOVariable
Insurance Trust StocksPLUS
Growth andIncome Portfolio.
- ---------------------------------------------------------------------------------
The investment objectives of each portfolio (except the Janus portfolios)
are fundamental and may not be changed without the approval of the holders of a
majority of the outstanding shares of the affected portfolio. For each of the
Funds this means the lesser of (1) 67% of the portfolio shares represented at a
meeting at which more than 50% of the outstanding portfolio shares are
represented or (2) more than 50% of the outstanding portfolio shares. The
investment objectives of the Janus portfolios purchased by the corresponding
subaccounts are non-fundamental and may be changed by the Fund's Trustees
without a shareholder vote.
THE FUNDS
Each available subaccount of MONY Variable Account A will invest only in the
shares of the Funds. The Funds (except for Janus Aspen Series Capital
Appreciation Portfolio) are diversified, open-end management investment
companies. The Janus Aspen Series Capital Appreciation Portfolio is a
non-diversified, open-end management investment company. The Funds are
registered with the SEC under the Investment Company Act of 1940. These
registrations do not involve supervision by the SEC of the management or
investment practices or policies of the Funds. The Funds, or any of them, may
withdraw from sale any or all the respective portfolios as allowed by
applicable law.
The Alger American Fund
Fred Alger Management, Inc., is each portfolio's investment adviser. The
investment adviser is responsible for managing each portfolio's assets
according to its goal and for placing orders with broker-dealers to purchase
and sell securities on behalf of each portfolio. The investment adviser fee for
each portfolio is shown in the table below.
Portfolio Investment Adviser Fee
----------------------------------------------------------------------------
Alger American Balanced Annual rate of 0.75% of the portfolio's average
Portfolio daily net assets.
----------------------------------------------------------------------------
Alger American MidCap Annual rate of 0.80% of the portfolio's average
Growth Portfolio daily net assets.
20
Enterprise Accumulation Trust
Enterprise Accumulation Trust has a number of portfolios. The shares of some
of the portfolios can be purchased by the subaccounts available to you.
Enterprise Capital Management, Inc. ("Enterprise Capital"), a wholly owned
subsidiary of MONY Life Insurance Company, is the investment adviser of
Enterprise Accumulation Trust. Enterprise Capital is responsible for the
overall management of the portfolios, including meeting the investment
objectives and policies of the portfolios. Enterprise Capital contracts with
sub-investment advisers to assist in managing the portfolios. For information
about the sub-advisers for each portfolio, see the Enterprise Accumulation
Trust prospectus included in this Prospectus Portfolio. Enterprise Accumulation
Trust pays an investment adviser fee to Enterprise Capital which in turn pays
the sub-investment advisers. Fees are deducted daily and paid to Enterprise
Capital on a monthly basis. The sub-investment adviser and daily investment
adviser fees and sub-investment adviser fees for each portfolio are shown in
the table below:
Portfolio and Sub-Investment Adviser Investment Adviser Fee Sub-Investment Adviser Fee
- -----------------------------------------------------------------------------------------------------
Equity Income Portfolio Annual rate of 0.75% of the Annual rate of 0.30% of the first
portfolio's average daily net $100 million, 0.25% of the next
1740 Advisers, Inc. (affiliate assets. $100 million, and 0.20% in
of MONY Life Insurance excess of $200 million of the
Company of America) is the portfolio's average daily net
sub-investment adviser. assets.
- -----------------------------------------------------------------------------------------------------
Global Socially Responsive Annual rate of 0.90% of the Annual rate of 0.45% of the first
Portfolio portfolio's average daily net $100 million; 0.40% of the next
assets. $100 million; and 0.30% in
Rockefeller & Co., Inc. is the excess of $200 million of the
sub-investment adviser. portfolio's average daily net
assets.
- -----------------------------------------------------------------------------------------------------
Growth Portfolio Annual rate of 0.75% of the Annual rate of 0.30% of the first
portfolio's average daily net $1 billion and 0.20% in excess of
Montag & Caldwell, Inc. is the assets. $1 billion of the portfolio's
sub-investment adviser. average daily net assets.
- -----------------------------------------------------------------------------------------------------
Growth and Income Portfolio Annual rate of 0.75% of the Annual rate of 0.30% of the first
portfolio's average daily net $100 million, 0.25% of the next
Retirement System Investors, assets. $100 million, and 0.20% in
Inc. is the sub-investment excess of $200 million of the
adviser. portfolio's average daily net
assets.
21
Portfolio and Sub-Investment Adviser Investment Adviser Fee Sub-Investment Adviser Fee
- ------------------------------------------------------------------------------------------------------------
Managed Portfolio Annual rate of 0.80% of the first Wellington Management
$400 million, 0.75% of the next Company's fee for the assets of
Wellington Management $400 million and 0.70% in excess the Portfolio it manages is an
Company, LLP and Sanford C. of $800 million of the portfolio's annual rate of 0.40% up to $500
Bernstein & Co., LLC. are the average daily net assets. million, 0.35% of the next $500
sub-investment advisers. million, 0.30% of the next $1
billion, and 0.25% in excess of $2
billion of the portfolio's average
daily net assets. Sanford C.
Bernstein & Co., Inc.'s fee for the
assets of the Portfolio it manages
is an annual rate of 0.40% up to
$10 million, 0.30% from $10
million to $50 million, 0.20%
from $50 million to $100 million,
and 0.10% in excess of $100
million of the portfolio's average
daily net assets.
- ------------------------------------------------------------------------------------------------------------
Multi-Cap Growth Portfolio Annual rate of 1.00% of the Annual rate of 0.40% of the
average daily net assets. average daily net assets.
Fred Alger Management Inc. is
the sub-investment adviser.
- ------------------------------------------------------------------------------------------------------------
Small Company Growth Annual rate of 1.00% of the Annual rate of 0.65% of the first
Portfolio portfolio's average daily net $50 million, 0.55% of the next
assets. $50 million and 0.45% in excess
William D. Witter, Inc. is the of $100 million of the portfolio's
sub-investment adviser. average daily net assets.
- ------------------------------------------------------------------------------------------------------------
Small Company Value Portfolio Annual rate of 0.80% of the first Annual rate of 0.40% of the first
$400 million, 0.75% of the next $1 billion and 0.30% in excess of
Gabelli Asset Management $400 million and 0.70% in excess $1 billion of the portfolio's
Company is the sub- of $800 million of the portfolio's average daily net assets.
investment adviser. average daily net assets.
- ------------------------------------------------------------------------------------------------------------
Total Return Portfolio Annual rate of 0.40% of the Annual rate of 0.25% of the
portfolio's average daily net portfolio's average daily net
Pacific Investment assets. assets.
Management Company, LLP is
the sub-investment adviser.
22
INVESCO Variable Investment Funds, Inc.
INVESCO Funds Group, Inc. is the investment adviser for each of the
portfolios. Together with affiliated companies, the investment adviser directs
all aspects of the management of the portfolios. The investment adviser fee for
each portfolio is shown in the table below.
Portfolio Investment Adviser Fee
- ---------------------------------------------------------------------------------------
INVESCO VIF -- Financial Services Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
- ---------------------------------------------------------------------------------------
INVESCO VIF -- Health Sciences Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
- ---------------------------------------------------------------------------------------
INVESCO VIF -- Telecommunications Fund Annual rate of 0.75% of the portfolio's average
daily net assets.
Janus Aspen Series
Janus Aspen Series has several portfolios. The shares of some of the
portfolios can be purchased by the subaccounts available to you. Janus Capital
is the investment adviser to each of the portfolios and is responsible for the
day-to-day management of the investment portfolios and other business affairs
of the portfolios. The daily investment adviser fee for each portfolio is shown
in the table below.
Portfolio Investment Adviser Fee
- -----------------------------------------------------------------------------------
Capital Appreciation Portfolio Annual rate of 0.65% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------
Flexible Income Portfolio Annual rate of 0.65% of the first $300 million; and
0.55% in excess of $300 million of the portfolio's
average daily net assets.
- -----------------------------------------------------------------------------------
International Growth Portfolio Annual rate of 0.65% of the portfolio's average
daily net assets.
- -----------------------------------------------------------------------------------
Lord Abbett Series Fund
Lord Abbett Series Fund has several portfolios. The shares of the portfolios
listed in the table below can be purchased by the subaccounts available to you.
Lord, Abbett & Co. is the investment adviser to each of the portfolios and
manages the investments of each of the portfolios. The investment adviser fee
is shown in the table below.
Portfolio Investment Adviser Fee
----------------------------------------------------------------------------
Bond-Debenture Portfolio Annual rate of 0.50% of the portfolio's average
daily net assets.
----------------------------------------------------------------------------
Growth and Income Portfolio Annual rate of 0.50% of the portfolio's average
daily net assets.
----------------------------------------------------------------------------
Mid-Cap Value Portfolio Annual rate of 0.75% of the portfolio's average
daily net assets.
23
MFS(R) Variable Insurance Trust/SM/
MFS Variable Insurance Trust contains a number of portfolios. The shares of
some of the portfolios can be purchased by the subaccounts available through
our product. Massachusetts Financial Services Company is the investment adviser
to each of the portfolios and manages the investments of each of the
portfolios. The investment adviser fee is shown in the table below.
Portfolio Investment Adviser Fee
--------------------------------------------------------------------------
MFS Mid Cap Growth Series Annual rate of 0.75% of the portfolio's average
daily net assets.
--------------------------------------------------------------------------
MFS New Discovery Series Annual rate of 0.90% of the portfolio's average
daily net assets.
--------------------------------------------------------------------------
MFS Total Return Series Annual rate of 0.75% of the portfolio's average
daily net assets.
--------------------------------------------------------------------------
MFS Utilities Series Annual rate of 0.75% of the portfolio's average
daily net assets.
MONY Series Fund, Inc.
MONY Series Fund, Inc. has a number of portfolios. The shares of some of the
portfolios can be purchased by the subaccounts available to you. Each of the
portfolios has different investment objectives and policies. The Company is a
registered investment adviser under the Investment Advisers Act of 1940. The
Company, as investment adviser, currently pays the compensation of the Fund's
directors, officers, and employees who are affiliated in some way with the
Company. MONY Series Fund, Inc. pays for all other expenses including, for
example, the calculation of the net asset value of the portfolios. To carry out
its duties as an investment adviser, the Company has entered into a Services
Agreement with MONY to provide personnel, equipment, facilities and other
services. As the investment adviser to MONY Series Fund, Inc., the Company
receives a daily investment adviser fee for each portfolio (see chart below).
Fees are deducted daily and paid to the Company monthly.
The following table describes the portfolios available and the investment
advisory fees:
Portfolio Investment Adviser Fee
- ------------------------------------------------------------------------------------
Government Securities Portfolio Annual rate of 0.50% of the first $400 million,
0.35% of the next $400 million, and 0.30% in
excess of $800 million of the portfolio's aggregate
average daily net assets.
- ------------------------------------------------------------------------------------
Long Term Bond Portfolio Annual rate of 0.50% of the first $400 million,
0.35% of the next $400 million, and 0.30% in
excess of $800 million of the portfolio's aggregate
average daily net assets.
- ------------------------------------------------------------------------------------
Money Market Portfolio Annual rate of 0.40% of the first $400 million,
0.35% of the next $400 million, and 0.30% of assets
in excess of $800 million of the portfolio's
aggregate average daily net assets.
24
PBHG Insurance Series Fund
PBHG Insurance Series Fund has a number of portfolios. The shares of some of
the portfolios can be purchased by the subaccounts available to you. Pilgrim
Baxter & Associates, Ltd. is the investment adviser for each of the portfolios.
Pilgrim Baxter Value Investors, Inc., a wholly-owned subsidiary of Pilgrim
Baxter & Associates, Ltd., is the sub-investment adviser for the Mid-Cap and
Select Value Portfolios. The investment adviser fees and sub-investment adviser
fees for each portfolio are shown in the table below. The sub-investment
adviser fee for each portfolio is paid by Pilgrim Baxter & Associates, Ltd. and
not by the portfolios.
Portfolio and
Investment Sub-Adviser Investment Adviser Fee Sub-Investment Adviser Fee
- ------------------------------------------------------------------------------------
PBHG Mid-Cap Annual rate of 0.85% of the Annual rate of 0.50% of the
ValuePortfolio portfolio's average daily net portfolio's average daily net
assets. assets.
Pilgrim Baxter &
Associates,Ltd. is the
investment
adviser.Pilgrim Baxter
Value Investors,Inc. is
the
sub-investmentadviser.
- ------------------------------------------------------------------------------------
PBHG Select Value Annual rate of 0.65% of the Annual rate of 0.40% of the
Portfolio portfolio's average daily net portfolio's average daily net
assets. assets.
Pilgrim Baxter &
Associates,Ltd. is the
investment
adviser.Pilgrim Baxter
Value Investors,Inc. is
the
sub-investmentadviser.
PIMCO Variable Insurance Trust
PIMCO Variable Insurance Trust has a number of portfolios. The shares of
some of the portfolios can be purchased by the subaccounts available to you.
Pacific Investment Management Company LLC is the investment adviser for the
portfolios and is responsible for managing the investment activities of the
portfolios and the portfolios' business affairs and other administrative
matters. The investment adviser fee for each portfolio is shown in the table
below.
Portfolio Investment Adviser Fee
- ---------------------------------------------------------------------------------
Global Bond Portfolio Annual rate of 0.25% of
the portfolio's average
dailynet assets.
- ---------------------------------------------------------------------------------
Real Return Bond Portfolio Annual rate of 0.25% of
the portfolio's average
dailynet assets.
- ---------------------------------------------------------------------------------
StocksPLUS Growth and Income Portfolio Annual rate of 0.40% of
the portfolio's average
dailynet assets.
25
The Universal Institutional Funds, Inc.
Morgan Stanley Asset Management* is the investment adviser to each of the
portfolios and manages the investments of each of the portfolios. The
investment adviser fee is shown in the table below.
Portfolio Investment Adviser Fee
----------------------------------------------------------------------------
Emerging Markets Equity Portfolio Annual rate of 1.25% of
the first $500
million;1.20% from $500
million to $1 billion;
and 1.15% inexcess of $1
billion of the
portfolio's average
dailynet assets.
----------------------------------------------------------------------------
Global Value Equity Portfolio Annual rate of 0.80% of
the first $500
million;0.75% from $500
million to $1 billion;
and 0.70% inexcess of $1
billion of the
portfolio's average
dailynet assets.
----------------------------------------------------------------------------
U. S. Real Estate Portfolio Annual rate of 0.80% of
the first $500
million;0.75% from $500
million to $1 billion;
and 0.70% inexcess of $1
billion of the
portfolio's average
dailynet assets.
* Morgan Stanley Asset Management Inc. changed its name to Morgan Stanley
Investment Management Inc. but continues to do business in certain instances
using the name Morgan Stanley Asset Management.
Purchase of Portfolio Shares by MONY Variable Account L
The Company purchases shares of each portfolio for the corresponding
sub-account at net asset value, i.e. without a sales load. Generally, all
dividends and capital gains distributions received from a portfolio are
automatically reinvested in the portfolio at net asset value. The Company, on
behalf of MONY Variable Account L, may elect not to reinvest dividends and
capital gains distributions. The Company redeems Fund shares at net asset value
to make payments under the Policies.
Fund shares are offered only to insurance company separate accounts. The
insurance companies may or may not be affiliated with the Company or with each
other. This is called "shared funding." Shares may also be sold to separate
accounts to serve as the underlying investments for variable life insurance
policies, variable annuity policies and qualified plans. This is called "mixed
funding." Currently, the Company does not foresee any disadvantages to policy
owners due to mixed or shared funding. However, differences in tax treatment or
other considerations may at some time create conflict of interests between
owners of various contracts. The Company and the Boards of Directors of the
Funds, and any other insurance companies that participate in the Funds are
required to monitor events to identify material conflicts. If there is a
conflict because of mixed or shared funding, the Company might be required to
withdraw the investment of one or more of its separate accounts from the Funds.
This might force the Funds to sell securities at disadvantageous prices.
The investment objectives of each of the portfolios is substantially similar
to the investment objectives of the subaccount which purchases shares of that
portfolio. A summary of the investment objective of each of the subaccounts
available to you is found in the chart on pages 13-18. No portfolio can assure
you that its objective will be achieved. You will find more detailed
information in the prospectus of each Fund that you received with this
prospectus. The Funds' prospectuses include information on the risks of each
portfolio's investments and investment techniques.
The Funds' Prospectuses Accompany This Prospectus And Should Be
Read Carefully Before Investing
26
DETAILED INFORMATION ABOUT THE POLICY
The Fund Value in MONY Variable Account L and the Guaranteed Interest
Account provide many of the benefits of your policy. The information in this
section describes the benefits, features, charges, and other major provisions
of the policies and the extent to which those benefits depend upon the Fund
Value.
Application for a Policy
The policy design meets the needs of individuals as well as for corporations
who provide coverage and benefits for key employees. A purchaser must complete
an application and personally deliver it to a licensed agent of the Company,
who is also a registered representative of MONY Securities Corporation ("MSC").
The licensed agent submits the application to the Company. The policy may also
be sold through other broker-dealers authorized under the law and by MSC. A
policy can be issued on the life of an insured for ages up to and including 85
with evidence of insurability that satisfies the Company. If a qualified plan
will own the policy, the insured cannot be more than 70 years old. The age of
the insured is the age on his or her last birthday prior to the date of the
policy. The Company accepts the application subject to its underwriting rules,
and may request additional information or reject an application.
The minimum Specified Amount you may apply for is $50,000. However, the
Company reserves the right to revise its rules at any time to require a
different minimum Specified Amount at issue for subsequently issued policies.
Each policy is issued with a policy date. The policy date is used to
determine the policy months and years, and policy monthly, quarterly,
semi-annual and annual anniversaries. The policy date is stated on page 1 of
the policy. The policy date will normally be the later of (1) the date that
delivery of the policy is authorized by the Company ("Policy Release Date"), or
(2) the policy date requested in the application. No premiums may be paid with
the application except under the temporary insurance procedures defined below.
Temporary Insurance Coverage
If you want insurance coverage before the Policy Release Date, and are more
than 15 days old and not more than 70 years old, you may be eligible for a
temporary insurance agreement. You must complete an application for the policy
and give it to the Company's licensed agent. The application contains a number
of questions about your health. Your eligibility for temporary coverage will
depend upon your answers to those questions. In addition, you must complete and
sign the Temporary Insurance Agreement Form. You must also submit payment for
at least one Minimum Monthly Premium for the Policy as applied for. Your
coverage under the Temporary Insurance Agreement starts on the date you sign
the form and pay the premium amount, or if later, the requested policy date.
See "Premium Flexibility," page 27.
Coverage under the Temporary Insurance Agreement ends on the earliest of:
. the Policy Release Date, if the policy is issued as applied for;
. the 15th day after the Policy Release Date or the date the policy takes
effect, if the policy is issued other than as applied for,
. no later than 90 days from the date the Temporary Insurance Agreement is
signed;
. the 45th day after the form is signed if you have not finished the last
required medical exam;
. 5 days after the Company sends notice to you that it declines to issue any
policy; and
. the date you tell the Company that the policy will be refused:
27
If the insured dies during the period of temporary coverage, the death
benefit will be:
(1) the insurance coverage applied for (including any optional riders) up
to $500,000, less
(2) the deductions from premium and the monthly deduction due prior to
the date of death.
Premiums paid for temporary insurance coverage are held in the Company's
general account until the Policy Release Date. Except as provided below,
interest is credited on the premiums (less any deductions from premiums) held
in the Company's general account. The interest rate will be set by the Company,
but will not be less than 4.5% per year. If the policy is issued and accepted,
these amounts will be applied to the policy. These premiums will be returned to
you (without interest) within 5 days after the earliest of:
(1) the date you tell the Company that the policy will be refused. Your
refusal must be (a) at or before the Policy Release Date, or (b) (if the
policy is authorized for delivery other than as applied for), on or before
the 15th day after the Policy Release Date; or
(2) the date on which coverage under the Temporary Insurance Agreement
ends other than because the applicant has died or the policy applied for is
issued or refused; or
(3) the date the Company sends notice to you declining to issue any
policy.
Initial Premium Payment
Once your application is approved and you are issued a policy, the balance
of the first scheduled premium payment is payable. The scheduled premium
payments specified in your policy must be paid in full when your policy is
delivered. Your policy is effective the later of (1) acceptance and payment of
the scheduled premium payment, or (2) the policy date requested in the
application. Any premium balance remitted by you earns interest until the Right
to Return Policy Period has ended. The policy premium credited with interest
equals amounts in the general account under the Temporary Insurance Agreement,
plus interest credited minus deductions from premiums. The monthly deduction
due prior to or on the Policy Release Date will be made. If you request a
policy date which is later than the Policy Release Date, your premium will be
held in the general account until the policy date. Premium held in the
Company's general account earns an interest rate set by the Company, but will
not be less than 4.5% per year. When the Right to Return Policy Period ends,
the premium, plus any interest credited by the Company, is allocated to the
subaccounts of MONY Variable Account L or the Guaranteed Interest Account
pursuant to your instructions. (See "Right to Examine a Policy -- Right to
Return Policy Period," below.)
Policy Date
The Company may approve the backdating of a policy. The policy may be
backdated for not more than 6 months (a shorter period is required in certain
states) prior to the date of the application. Backdating can be to your
advantage if it lowers the insured's issue age and results in lower cost of
insurance rates. If the policy is backdated, the initial scheduled premium
payment will include sufficient premium to cover the extra charges for the
backdating period. Extra charges equal the monthly deductions for the period
that the policy date is backdated.
Risk Classification
Insureds are assigned to underwriting (risk) classes. Risk classes are used
in calculating the cost of insurance and certain rider charges. In assigning
insureds to underwriting classes, the Company will normally use the medical or
paramedical underwriting method. This method may require a medical examination
of the proposed insured. The Company may use other forms of underwriting when
it is considered appropriate.
28
Right to Examine a Policy -- Right to Return Policy Period
The Right to Return Policy Period runs for the later of (a) 10 days (or
longer in certain states) after you receive the policy; (b) 45 days after the
application is signed; or (c) 10 days after we mail or deliver a notice of
withdrawal right. During this period, you may cancel the policy and receive a
refund of the full amount of the premium paid.
Premiums
The policy is a flexible premium policy. The policy provides considerable
flexibility, subject to the limitations described below, to pay premiums at
your discretion.
Premium Flexibility
The Company requires you to pay an amount equal to at least the Minimum
Monthly Premium to put the policy in effect. If you want to pay premiums less
often than monthly, the premium required to put the policy in effect is equal
to the Minimum Monthly Premium multiplied by 12 divided by the frequency of the
scheduled premium payments. This Minimum Monthly Premium will be based upon:
1) the policy's Specified Amount,
2) any riders added to the policy, and
3) the insured's
a) Age,
b) smoking status,
c) gender (unless unisex cost of insurance rates apply, see "Cost of
Insurance," page 44), and
d) underwriting class.
The Minimum Monthly Premium will be shown in the policy. Thereafter, subject
to the limitations described below, you may choose the amount and frequency of
premium payments to reflect your varying financial conditions.
The policy is guaranteed not to lapse during the first three policy years if
on each monthly anniversary the conditions previously described in "Summary of
the Policy" on page 1 are met. See also "Grace Period and Lapse," page 40.
Scheduled Premium Payments
When you apply for a policy, you determine a scheduled premium payment. This
scheduled premium payment provides for the payment of level premiums at fixed
intervals over a specified period of time. You will receive a premium reminder
notice for the scheduled premium payment amount on an annual, semiannual or
quarterly basis, at your option. The minimum scheduled premium payment equals
the Minimum Monthly Premium multiplied by 12 divided by the scheduled premium
payment frequency. Although reminder notices will be sent, you may not be
required to pay scheduled premium payments.
You must specify the subaccounts and/or Guaranteed Interest Account and the
percentage of scheduled premium payments to be allocated to those subaccounts
and/or Guaranteed Interest Account. If we do not receive a valid set of
allocation instructions from you, scheduled premiums will be allocated to the
Money Market Subaccount.
You may elect to make monthly premium payments by electronic funds transfer.
Based on your policy date, up to two Minimum Monthly Premiums may be required
to be paid in cash before premiums may be paid by
29
electronic funds transfer to the Company. Paying premiums by electronic funds
transfer requires you to authorize the Company to withdraw premiums from your
checking account each month.
Payment of the scheduled premium payments will not guarantee that your
policy will remain in effect. (See "Grace Period and Lapse" in the Summary and
on page 40.)
Modified Endowment Contracts
The amount, frequency and period of time over which you pay premiums may
affect whether your policy will be classified as a modified endowment contract.
A modified endowment contract is a type of life insurance policy subject to
different tax treatment than that given to a conventional life insurance
policy. The difference in tax treatment occurs when you take certain pre-death
distributions from your policy. See "Federal Income Tax Considerations --
Modified Endowment Contracts," page 48.
Unscheduled Premium Payments
Generally, you may make premium payments at any time and in any amount.
However, if the premium payment you wish to make exceeds the Scheduled Premium
payments for the policy, the Company may reject or limit any unscheduled
premium payment that would result in an immediate increase in the death benefit
payable. An immediate increase would occur if the policy's death benefit
exceeds the Specified Amount for the policy. The policy's death benefit would
exceed the Specified Amount of the policy if your Fund Value multiplied by the
death benefit percentage determined in accordance with the federal income tax
law definition of life insurance exceeds the Specified Amount. See "Death
Benefits Under the Policy," page 30 and "Federal Income Tax Considerations --
Definition of Life Insurance," page 47. However, such a premium may be accepted
if you provide us with satisfactory evidence of insurability. If satisfactory
evidence of insurability is not received, the payment or a part of it may be
returned. In addition, all or a part of a premium payment will be rejected and
returned to you if it would exceed the maximum premium limitations prescribed
by the federal income tax law definition of life insurance.
Payments you send to us will be treated as premium payments, and not as
repayment of Outstanding Debt, unless you request otherwise. If you request
that the payment be treated as a repayment of Outstanding Debt, any part of a
payment that exceeds the amount of Outstanding Debt will be applied to the Fund
Value. Applicable taxes and sales charges are only deducted from any payment
that constitutes a premium payment.
Premium Payments Affect the Continuation of the Policy
If you skip or stop paying premiums, the policy will continue in effect
until the Cash Value can no longer cover (1) the monthly deductions from the
Fund Value for the policy, and (2) the charges for any optional insurance
benefits added by rider. See "Grace Period and Lapse." page 40.
Your policy is guaranteed to remain in effect as long as:
(a) the Cash Value is greater than zero; or
(b) during the first three policy years, the Minimum Monthly Premium
requirements are satisfied, and if you increase the Specified Amount during
the first three policy years, the increased Minimum Monthly Premium
requirements are satisfied for the remainder of the first three policy years.
Generally, your policy remains in effect so long as your policy has Cash
Value. Charges that maintain your policy are deducted monthly from Fund Value.
The Cash Value of your policy is affected by,
(1) the investment experience of any amounts in the subaccounts of MONY
Variable Account L,
(2) the interest earned in the Guaranteed Interest Account, and
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(3) the deduction from Cash Value of the various charges, costs, and
expenses imposed by the policy provisions.
This in turn affects the length of time your policy remains in effect
without the payment of additional premiums. Therefore, coverage will last as
long as the Cash Value of your policy is sufficient to pay these charges. See
"Grace Period and Lapse," page 40.
Allocation of Net Premiums
Net premiums may be allocated to any of the available subaccounts and to the
Guaranteed Interest Account. Allocations must be in whole percentages, and no
allocation may be for less than 5% of a net premium. Allocation percentages
must sum to 100%.
You may change the allocation of net premiums at any time by submitting a
proper written request to the Company's home office at 1740 Broadway, New York,
New York, 10019. In addition, you may make changes in net premium allocation
instructions by telephone if a properly completed and signed telephone transfer
authorization form or a policy application with the telephone authorization
completed has been received by us at our Syracuse Operations Center at 1 MONY
Plaza, Syracuse, New York, 13202. The Company may stop making available the
ability to give net premium allocation instructions by telephone at any time,
but it will give you notice before doing so if we have received your telephone
transfer authorization form or a policy application with the telephone
authorization completed. See "Telephone Transfer Privileges," page 61. Whether
you give us instructions in writing or by telephone, the revised allocation
percentages will be effective on the day we receive the notification.
Unscheduled premium payments may be allocated either by percentage or by
dollar amount. If the allocation is expressed in dollar amounts, the 5% limit
on allocation percentages does not apply.
Death Benefits under the Policy
When your policy is issued, the initial amount of insurance ("Specified
Amount") is shown on the specification page of your policy. The minimum
Specified Amount is $50,000.
As long as the policy is in effect, the Company will, upon proof of death of
an insured, pay death benefit proceeds to a named beneficiary. Death benefit
proceeds will consist of:
(1) The policy's death benefit, plus
(2) Any insurance proceeds provided by rider, less
(3) Any Outstanding Debt, (and, if in the Grace Period, less any overdue
charges).
You may select one of two death benefit Options: Option 1 or Option 2.
Generally, you designate the death benefit option in your application. If no
option is designated, the Company assumes Option 2 has been selected. Subject
to certain restrictions, you can change the death benefit option selected. As
long as your policy is in effect, the death benefit under either option will
never be less than the Specified Amount of your policy.
Option 1 -- The death benefit equals the greater of:
(a) The Specified Amount, or
(b) Fund Value multiplied by a death benefit percentage.
The death benefit percentages vary according to the age of the insured
and will be at least equal to the percentage defined in the Internal Revenue
Code. The Internal Revenue Code addresses the definition of a life insurance
policy for tax purposes. See "Federal Income Tax Considerations --
Definition of Life Insurance," page 46. The death benefit percentage is 250%
for insureds 40 or under, and it declines for older insureds. A table
showing the death benefit percentages is in Appendix A to this prospectus
and in your
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policy. If you seek to have favorable investment performance reflected in
increasing Fund Value, and not in increasing insurance coverage, you should
choose Option 1.
Option 2 -- The death benefit equals the greater of:
(a) The Specified Amount of the policy, plus the Fund Value, or
(b) The Fund Value multiplied by a death benefit percentage.
The Fund Value used in these calculations is determined as of the date of
the insured's death. The death benefit percentage is the same as that used
for Option 1 and is stated in Appendix A. The death benefit in Option 2 will
always vary as Fund Value varies. If you seek to have favorable investment
performance reflected in increased insurance coverage, you should choose
Option 2.
Examples of Options 1 and 2
The following examples demonstrate the determination of death benefits under
Options 1 and 2. The examples show three policies with the same Specified
Amount, but Fund Values that vary as shown. It is assumed that the insured is
age 40 at the time of death and that there is no Outstanding Debt. The date of
death is also assumed to be on a monthly anniversary day.
Policy 1 Policy 2 Policy 3
-------- -------- --------
Specified Amount.................. $100,000 $100,000 $100,000
Fund Value on Date of Death....... $ 35,000 $ 60,000 $ 85,000
Death Benefit Percentage.......... 250% 250% 250%
Death Benefit under Option 1...... $100,000 $150,000 $212,500
Death Benefit under Option 2...... $135,000 $160,000 $212,500
Option 1, Policy 1: The death benefit equals $100,000 since the death benefit is the greater of the
Specified Amount ($100,000) or the Fund Value multiplied by the death benefit
percentage ($35,000 x 250% = $87,500).
Option 1, Policies 2 & 3: The death benefit is equal to the Fund Value multiplied by the death benefit
percentage since ($60,000 x 250% = $150,000 for Policy 2; $85,000 x 250% =
$212,500 for Policy 3) is greater than the Specified Amount ($100,000).
Option 2, Policy 1: The death benefit equals $135,000 since the Specified Amount plus the Fund Value
($100,000 + $35,000 = $135,000) is greater than the Fund Value multiplied by the
death benefit percentage ($35,000 x 250% = $87,500).
Option 2, Policy 2: The death benefit equals the Specified Amount plus the Fund Value ($100,000 +
$60,000 = $160,000) since it is greater than the Fund Value multiplied by the death
benefit percentage ($60,000 X 250% = $150,000).
Option 2, Policy 3: The death benefit is the Fund Value multiplied by the death benefit percentage
($85,000 X 250% = $212,500) since it is greater than the Specified Amount plus the
Fund Value ($100,000 + $85,000 = $185,000).
The Company pays death benefit proceeds to a beneficiary in a lump sum or under
a payment plan offered under the policy. The policy should be consulted for
details.
Changes in Death Benefit Option
You may request that the death benefit option under your policy be changed
from Option 1 to Option 2, or Option 2 to Option 1. You may make a change by
sending a written request to the Company's administrative office. A change from
Option 2 to Option 1 is made without providing evidence of insurability. A
change from Option 1 to Option 2 will require that you provide satisfactory
evidence of insurability. The effective date of a
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change requested between monthly anniversaries will be the next monthly
anniversary day after the change is accepted by the Company.
If you change from Option 1 to Option 2 your policy's Specified Amount is
reduced by the amount of the policy's Fund Value at the date of the change.
This maintains the death benefit payable under Option 2 at the amount that
would have been payable under Option 1 immediately prior to the change. The
total death benefit will not change immediately. The change to Option 2 will
affect the determination of the death benefit from that point on. As of the
date of the change, the Fund Value will be added to the new specified Amount.
The death benefit will then vary with the Fund Value. This change will not be
permitted if it would result in a new Specified Amount of less than $100,000.
If you change from Option 2 to Option 1, the Specified Amount of the policy
will be increased by the amount of the policy's Fund Value at the date of the
change. This maintains the death benefit payable under Option 1 at the amount
that would have been payable under Option 2 immediately prior to the change.
The total death benefit will not change immediately. The change to Option 1
will affect the determination of the death benefit from that point on. The
death benefit will equal the Specified Amount (or if higher, the Fund Value
multiplied by the death benefit percentage). The change to Option 1 will
generally reduce the death benefit payable in the future.
A change in the death benefit option may affect the monthly cost of
insurance charge since this charge varies with the net amount at risk.
Generally, the net amount at risk is the amount by which the death benefit
exceeds Fund Value. See "Cost of Insurance," page 44. If the policy's death
benefit is not based on the death benefit percentage under Option 1 or 2,
changing from Option 2 to Option 1 will generally decrease the net amount at
risk. Therefore, this change may decrease the cost of insurance charges.
Changing from Option 1 to Option 2 will generally result in a net amount at
risk that remains level. However, such a change will result in an increase in
the cost of insurance charges over time. This results because the cost of
insurance rates increase with the insured's age.
Changes in Specified Amount
You may request an increase or decrease in the Specified Amount under your
policy subject to Company approval. A change in the Specified Amount may be
made at any time after the policy is issued. Increases in Specified Amount are
not permitted on or after the insured's age 85. Increasing the Specified Amount
will generally increase the policy's death benefit. Decreasing the Specified
Amount will generally decrease the policy's death benefit. The amount of change
in the death benefit depends on (1) the death benefit option chosen, and (2)
whether the death benefit under the policy is being computed using the death
benefit percentage at the time of the change. Changing the Specified Amount
could affect the subsequent level of policy values. For example, an increase in
Specified Amount may increase the net amount at risk, which will increase your
cost of insurance charges over time. Conversely, a decrease in Specified Amount
may decrease the net amount at risk, which may decrease your cost of insurance
over time.
To increase or decrease the Specified Amount, send a written application to
the Company's administrative office. It will become effective on the monthly
anniversary day on or next following the Company's acceptance of your request.
If you are not the insured, the Company may also require the consent of the
insured before accepting a request.
Increases
An increase of Specified Amount requires that additional, satisfactory
evidence of insurability be provided to the Company.
When you request an increase in Specified Amount, a new "coverage segment"
is created for which cost of insurance and other charges are computed
separately. See "Charges and Deductions," page 42. In addition, the
33
surrender charge associated with your policy will increase. The surrender
charge for the increase is computed in a similar way as for the original
Specified Amount. The Minimum Monthly Premium will also be adjusted. The
adjustment will be done prospectively to reflect the increase. If the Specified
Amount is increased when a premium payment is received, the increase will be
processed before the premium payment is processed.
If an increase creates a new coverage segment of Specified Amount, Fund
Value after the increase will be allocated, (1) first to the original coverage
segment, and (2) second to each coverage segment in order of the increases.
Decreases
Any decrease in Specified Amount (whether requested by you or resulting from
a partial surrender or a death benefit option change) will be applied:
(1) To reduce the coverage segments of Specified Amount associated with
the most recent increases, then
(2) To the next most recent increases successively, and last
(3) To the original Specified Amount.
A decrease will not be permitted if the Specified Amount would fall below
$100,000. Any decrease in the Term Life Term Insurance Rider will be applied to
reduce the coverage segments of the Rider in the order of the most recent
increases successively and finally to the original Rider.
The Minimum Monthly Premium will not be adjusted for the decrease in the
Specified Amount. If the Specified Amount is decreased when a premium payment
is received, the decrease will be processed before the premium payment is
processed. Rider coverages may also be affected by a decrease in Specified
Amount.
The Company reserves the right to reject a requested decrease. Decreases
will not be permitted if:
(1) Compliance with the guideline premium limitations under federal tax
law resulting from the decrease would result in immediate termination of
your policy, or
(2) To effect the decrease, payments to you would have to be made from
Fund Value for compliance with the guideline premium limitations, and the
amount of the payments would exceed the Cash Value of your policy.
If a requested change is not approved, we will send you a written notice of
our decision.
Other Optional Insurance Benefits
Subject to certain requirements and state approval, you may elect to add one
or more of the optional insurance benefits described below. Optional insurance
benefits are added when you apply for your policy. These other optional
benefits are added to your policy by an addendum called a rider. As applicable
a charge is deducted monthly from the Fund Value for each optional benefit
added to your policy. See "Charges and Deductions," page 41. You can cancel
these benefits at any time. Certain restrictions may apply and are described in
the applicable rider. In addition, adding or canceling these benefits may have
an effect on your policy's status as a modified endowment contract. See
"Federal Income Tax Considerations -- Modified Endowment Contracts," page 48.
An insurance agent authorized to sell the policy can describe these extra
benefits further. Samples of the provisions are available from the Company upon
written request.
From time to time we may make available riders other than those listed
below. Contact an insurance agent authorized to sell the policy for a complete
list of the riders available.
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Spouse's Term Rider
This rider provides for term insurance benefits on the life of the insured's
spouse, to the spouse's age 80. The minimum amount of coverage is $25,000. The
rider coverage may be converted without evidence of insurability to any level
premium, level face amount permanent plan of insurance offered by the Company
at any time prior to the spouse's age 65 or 5 years from the issue of the
rider, if later.
Children's Term Insurance Rider
This rider provides term insurance coverage on the lives of the children of
the insured under age 18. The coverage continues to the policy anniversary
after the child's 22nd birthday. It provides coverage for children upon birth
or legal adoption without presenting evidence of insurability, if the rider is
applied for and issued at the same time as the policy is applied for and
issued. If applied for after the policy is issued, different requirements may
be imposed. Coverage is limited to the lesser of 1/5th of the initial
Specified Amount or $10,000. Upon the expiration of the rider coverage, it may
be converted to any level premium, level face amount permanent plan of
insurance then offered by the Company, for up to five times the rider coverage
amount.
Purchase Option Rider
This Rider provides the option to purchase up to $100,000 of additional
coverage without providing additional evidence that the insured remains
insurable. Coverage may be added on each policy anniversary when the insured's
age is 25, 28, 31, 34, 37, 40, 43, 46 and 49. In addition, the future right to
purchase new insurance on the next option date may be advanced and exercised
immediately upon the following events:
. Marriage of the insured.
. Birth of a child of the insured.
. Legal adoption of a child by insured.
A period of term insurance is automatically provided starting on the date of
the specified event. The interim term insurance, and the option to accelerate
the purchase of the coverage expires 60 days after the specified event.
Waiver of Monthly Deduction Rider
This rider provides for the waiver of certain charges while the insured has
a covered disability and the policy is in effect. While the insured is
disabled, no deductions are made for (1) monthly administrative charges, (2)
per $1,000 Specified Amount charges, (3) cost of insurance charges, and rider
charges. During this period the charges are waived and therefore not deducted
from the Fund Value. The cumulative Minimum Monthly Premium requirement does
not change during the covered disability. It remains fixed at the level at the
beginning of the disability.
Term Life Term Insurance Rider
This rider provides additional death benefits on the life of the insured
until the insured reaches age 80. The minimum amount of coverage is $25,000.
You may convert the rider coverage without evidence of insurability to any
level premium, level face amount permanent policy of insurance offered by the
Company. The conversion must occur prior to the insured's age 65 or 5 years
from the issue of the rider, whichever is later.
Benefits at Maturity
The maturity date for this policy is the policy anniversary on which the
insured is age 100. If the insured is living on the maturity date, the Company
will pay to you, as an endowment benefit, the Cash Value of the policy.
Ordinarily, the Company pays within seven days of the policy anniversary.
Payments may be postponed in
35
certain circumstances. See "Payments," page 56. Premiums will not be accepted,
nor will monthly deductions be made, after the maturity date.
Policy Values
Fund Value
The Fund Value is the sum of the amounts under the policy held in each
subaccount of MONY Variable Account L and any Guaranteed Interest Account. It
also includes the amount set aside in the Company's Loan Account, and any
interest, to secure Outstanding Debt.
On each Business Day, the part of the Fund Value allocated to any particular
subaccount is adjusted to reflect the investment experience of that subaccount.
On each monthly anniversary day, the Fund Value also is adjusted to reflect
interest on the Guaranteed Interest Account and the Loan Account and the
assessment of the monthly deduction. See "Determination of Fund Value," page
34. No minimum amount of Fund Value allocated to a particular subaccount is
guaranteed. You bear the risk for the investment experience of Fund Value
allocated to the subaccounts.
Cash Value
The Cash Value of the policy equals the Fund Value less any surrender charge
less any Outstanding Debt. Thus, the Fund Value exceeds your policy's Cash
Value by the amount of the surrender charge and any Outstanding Debt. Once the
surrender charge expires, the Cash Value equals the Fund Value less any
Outstanding Debt.
Determination of Fund Value
Although the death benefit under a policy can never be less than the
policy's Specified Amount, the Fund Value will vary. The Fund Value varies
depending on several factors:
. Payment of premiums.
. Amount held in the Loan Account to secure any Outstanding Debt.
. Partial surrenders.
. The charges assessed in connection with the policy.
. Investment experience of the subaccounts.
. Amounts credited to the Guaranteed Interest Account.
There is no guaranteed minimum Fund Value (except to the extent that you have
allocated net premium payments and cash values to the Guaranteed Interest
Account) and you bear the entire risk relating to the investment performance of
Fund Value allocated to the subaccounts.
The Company uses amounts allocated to the subaccounts to purchase shares of
the corresponding portfolios of the Funds. The values of the subaccounts
reflect the investment experience of the corresponding portfolio. The
investment experience reflects:
. The investment income.
. Realized and unrealized capital gains and losses.
. Expenses of a portfolio including the investment adviser fees.
. Any dividends or distributions declared by a portfolio.
Any dividends or distributions from any portfolio of the Funds are reinvested
automatically in shares of the same portfolio. However, the Company, on behalf
of MONY Variable Account L, may elect otherwise. The
36
subaccount value will also reflect the mortality and expense risk charges the
Company makes each day to the Variable Account.
Amounts allocated to the subaccounts are measured in terms of units. Units
are a measure of value used for bookkeeping purposes. The value of amounts
invested in each subaccount is represented by the value of units credited to
the policy for that subaccount. (See "Calculating Unit Values for Each
Subaccount," on page 35.) On any day, the amount in a subaccount of MONY
Variable Account L is equal to the unit value times the number of units in that
subaccount credited to the policy. The units of each subaccount will have
different unit values.
Units of a subaccount are purchased (credited) whenever premiums or amounts
transferred (including transfers from the Loan Account) are allocated to that
subaccount. Units are redeemed (debited) to:
. Make partial surrenders.
. Make full surrenders.
. Transfer amounts from a subaccount (including transfers to the Loan
Account).
. Pay the death benefit when the insured dies.
. Pay monthly deductions from the policy's Fund Value.
. Pay policy transaction charges.
. Pay surrender charges.
The number of units purchased or redeemed is determined by dividing the dollar
amount of the transaction by the unit value of the affected subaccount,
computed after the close of business that day. The number of units changes only
as a result of policy transactions or charges. The number of units credited
will not change because of later changes in unit value.
Transactions are processed when a premium or an acceptable written or
telephone request is received at the Company's administrative office. If the
premium or request reaches the administrative office on a day that is not a
Business Day, or after the close of business on a Business Day (after 4:00
Eastern Time), the transaction date will be the next Business Day. All policy
transactions are performed as of a Business Day. If a transaction date or
monthly anniversary day occurs on a day other than a Business Day (e.g.,
Saturday), the calculations will be done on the next day that the New York
Stock Exchange is open for trading.
Calculating Unit Values for Each Subaccount
To determine the unit value of a subaccount on any Business Day, the Company
takes the prior Business Day's Unit Value and multiplies it by the Net
Investment Factor for the current Business day. The Net Investment Factor is
used to measure the investment performance of a subaccount from one Business
Day to the next. The Net Investment Factor for each subaccount equals:
(1) the net asset value per share of each Fund held in the subaccount at
the end of the current Business Day divided by
(2) the net asset value per share of each Fund held in the subaccount at
the end of the prior Business Day, minus
(3) the daily mortality and expense risk charge and any other applicable
charges adjusted for the number of days in the period.
The unit value of each subaccount on its first Business Day was set at
$10.00.
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Determining Fund Value
[FLOW CHART]
38
Transfer of Fund Value
You may transfer Fund Value among the subaccounts after the Right to Return
Policy Period by sending a proper written request to the Company's
administrative office. Transfers may be made by telephone if you have proper
authorization. See "Telephone Transfer Privileges," page 61. Currently, there
are no limitations on the number of transfers between subaccounts. There is
also no minimum amount required: (1) to make a transfer, or (2) to remain in
the subaccount after a transfer. You may not make a transfer if your policy is
in the grace period and a payment required to avoid lapse is not paid. See
"Grace Period and Lapse," page 40. No charges are currently imposed upon these
transfers. However, the Company reserves the right to assess a $25 transfer
charge in the future on policy transfers over 12 during any policy year, and to
discontinue telephone transfers.
After the Right to Return Policy Period, Fund Value may also be transferred
from the subaccounts to the Guaranteed Interest Account. Transfers from the
Guaranteed Interest Account to the subaccounts will only be permitted in the
policy month following a policy anniversary as described in "The Guaranteed
Interest Account," page 53.
Right to Exchange Policy
During the first 24 months following the policy date, you may exchange your
policy for a policy where the investment experience is guaranteed. To
accomplish this, the entire amount in the subaccounts of MONY Variable Account
L is transferred to the Guaranteed Interest Account. All future premiums are
allocated to the Guaranteed Interest Account. This serves as an exchange of
your policy for the equivalent of a flexible premium universal life policy. See
"The Guaranteed Interest Account," page 53. No charge is imposed on the
transfer when you exercise the exchange privilege.
Option to Obtain Paid-Up Insurance
You may change to guaranteed paid-up insurance on a policy anniversary. At
that time, the Specified Amount will be reduced to an amount that the Cash
Value will maintain in effect until the maturity date when applied as a net
single premium. However, the maximum amount of Cash Value applied will not be
greater than necessary to provide an amount at risk equal to the amount at risk
immediately before this option becomes effective. Any Cash Value in excess of
the amount applied will be refunded to you.
The net single premium rates will be based on: (a) the 1980 CSO mortality
tables at the Insured's gender and attained age and class of risk on the later
of the policy date and the most recent increase in coverage under the policy;
and (b) 4.5% interest. On and after the effective date, the Cash Value of the
paid-up coverage will equal the present value of future guaranteed benefits
based on the net single premium rates described above without regard to any
loans.
In order to obtain paid-up insurance, the Company must receive a written
request 30 days prior to the policy anniversary date on which it becomes
effective. The endorsement issued to reflect the change to paid-up insurance
will show the reduced Specified Amount and the guaranteed Cash Value on the
effective date and each policy anniversary thereafter.
Once the paid-up insurance option is effective the following conditions
apply:
(1) It may not be revoked.
(2) The Company will not accept any further premium.
(3) No further optional policy changes may be made.
(4) The policy is no longer subject to the Administrative charge and the
per $1,000 Specified Amount charge.
39
(5) Any surrender charge, loan balance and loan interest which existed
immediately before the effective date will be set to zero.
(6) Any partial surrender will result in a recalculation of the Specified
Amount and Cash Value.
(7) Any additional benefits provided by rider will terminate.
(8) The death benefit will equal the reduced Specified Amount.
Policy Loans
You may borrow money from the Company at any time using your policy as
security for the loan. You take a loan by submitting a proper written request
to the Company's administrative office. You may take a loan any time your
policy has a positive Cash Value. The maximum amount you may borrow at any time
is 90% of the Cash Value of your policy. (If you request a loan on a monthly
anniversary day, the maximum loan is reduced by the monthly deduction due on
that day.) The Outstanding Debt is the cumulative amount of outstanding loans
and loan interest payable to the Company at any time.
Loan interest is payable in arrears on each policy anniversary at an annual
rate which varies by the number of years since your policy was issued. For the
first ten policy years, the loan rate is 5.25%. After the tenth policy
anniversary, the loan rate is 4.75%. Interest on the full amount of any
Outstanding Debt is due on the policy anniversary, until the Outstanding Debt
is repaid. If interest is not paid when due, it will be added to the amount of
the Outstanding Debt.
You may repay all or part of the Outstanding Debt at any time while your
policy is in effect. Only payments shown as loan or interest payments will be
treated as such. If a loan repayment is made which exceeds the Outstanding
Debt, the excess will be applied as a scheduled premium payment. The payment
will be subject to the rules on acceptance of premium payments.
When you take a loan, an amount equal to the loan is transferred out of the
subaccounts and the Guaranteed Interest Account into the Loan Account to secure
the loan. Within certain limits, you may specify the amount or the percentage
of the loan amount to be deducted from the subaccounts and the Guaranteed
Interest Account. The request for a loan will not be accepted if (1) you do not
specify the source of the transfer, or (2) if the transfer instructions are
incorrect. On each policy anniversary, an amount equal to the loan interest due
and unpaid for the policy year will be transferred to the Loan Account. The
transfer is made from the subaccounts and the Guaranteed Interest Account on a
proportional basis.
The Fund Value in the Loan Account in excess of the Outstanding Debt will be
allocated to the subaccounts and/or the Guaranteed Interest Account in a manner
determined by us.
The Loan Account is part of the Company's general account. Amounts held in
the Loan Account are credited monthly with an annual rate of interest not less
than 4.5%
Loan repayments release funds from the Loan Account. Unless you request
otherwise, amounts released from the Loan Account will be transferred into the
subaccounts and Guaranteed Interest Account pursuant to your most recent valid
allocation instructions for scheduled premium payments. In addition, Fund Value
in the Loan Account in excess of the outstanding loan is treated differently.
The treatment depends on (1) whether at the time the loan was made, Fund Values
were transferred from the subaccounts or the Guaranteed Interest Account, and
(2) whether or not loan interest due is paid when due or the amount of the
interest is added to the loan ("capitalized"). If the loan is from the
subaccounts and loan interest is paid in cash, this excess offsets the amount
that must be transferred from the subaccounts to the Loan Account on the policy
anniversary. If the loan is from the Guaranteed Interest Account and loan
interest is paid in cash, this excess is allocated back to the Guaranteed
Interest Account. The allocation back is on a monthly basis proportionately to
all interest crediting generations from which the loan was taken.
40
Amounts held in the Loan Account to secure Outstanding Debt forego the
investment experience of the subaccounts and the current interest rate of the
Guaranteed Interest Account. Thus Outstanding Debt, whether or not repaid, has
a permanent effect on your policy values and may have an effect on the amount
and duration of the death benefit. If not repaid, the Outstanding Debt will be
deducted from the amount of the death benefit upon the death of the insured, or
the value paid upon surrender or maturity.
Outstanding Debt may affect the length of time the policy remains in effect.
After the third policy anniversary (or, in some instances, the third
anniversary following an increase), your policy will lapse when (1) Cash Value
is insufficient to cover the monthly deduction against the policy's Fund Value
on any monthly anniversary day, and (2) the minimum payment required is not
made during the grace period. Moreover, the policy may enter the grace period
more quickly when Outstanding Debt exists, because the Outstanding Debt is not
available to cover the monthly deduction. Additional payments or repayments of
a part of Outstanding Debt may be required to keep the Policy in effect. See
"Grace Period and Lapse," page 40.
A loan will not be treated as a distribution from your policy and will not
result in taxable income to you unless your policy is a modified endowment
contract. If your policy is a modified endowment contract, a loan will be
treated as a distribution that may give rise to taxable income. If your policy
lapses with an outstanding loan balance there could be adverse federal income
tax consequences depending on the particular facts and circumstances. For
example, if (1) your policy lapses with an outstanding loan balance, and (2) it
does not lapse under a non-forfeiture option, you can have ordinary income to
the extent the outstanding loan exceeds your investment in the policy (i.e.
generally premiums paid less prior non-taxable distributions). For more
information on the tax treatment of loans, see "Federal Income Tax
Considerations," page 46.
Full Surrender
You may fully surrender your policy at any time during the lifetime of the
insured. The amount received for a full surrender is the policy's Fund Value
less (1) any surrender charge, and (2) any Outstanding Debt.
You may surrender your policy by sending a written request together with the
policy to the Company's administrative office. The proceeds will be determined
as of the end of the valuation period during which the request for surrender is
received. You may elect to (1) have the proceeds paid in cash, or (2) apply the
proceeds under a payment plan offered under your policy. See "Payment Plan
Settlement Provisions," page 56. For information on the tax effects of
surrender of a policy, see "Federal Income Tax Considerations," page 46.
Partial Surrender
With a partial surrender, you obtain a part of the Cash Value of your policy
without having to surrender the policy in full. You may request a partial
surrender at any time. The partial surrender will take effect on (1) the
business day that we receive your request at our administrative office, or (2)
on the next business day if that day is not a business day. There is currently
no limit on the number of partial surrenders allowed in a policy year.
A partial surrender must be for at least $500 (plus the applicable fee). In
addition, your policy's Cash Value must be at least $500 after the partial
surrender. If you have taken a loan on your policy, the amount of the partial
surrender is limited so that the loan amount, after the partial surrender, is
not greater than 90% of Cash Value.
You may make a partial surrender by submitting a proper written request to
the Company's administrative office. As of the effective date of any partial
surrender, your Fund Value and Cash Value are reduced by the amount surrendered
(plus the applicable fee). You allocate an amount or percent of your Fund Value
in the subaccounts and the Guaranteed Interest Account for your partial
surrender. Allocations by percentage must be in whole percentages and the
minimum percentage is 10% against any subaccount or the Guaranteed Interest
Account. Percentages must total 100%. We will reject an allocation which does
not comply with the rules or if there is not enough Fund Value in a subaccount
or the Guaranteed Interest Account to provide its share of the allocation. If
the insured dies after the request for a partial surrender is sent to the
Company and prior to it being
41
effected, the amount of the partial surrender will be deducted from the death
benefit proceeds. The death benefit proceeds will be determined taking into
account the amount surrendered.
When you make a partial surrender and you selected death benefit Option 1,
the Specified Amount of your policy is decreased by the amount of the partial
surrender (excluding its fee). If you selected death benefit Option 2, a
partial surrender will not change the Specified Amount of your policy. However,
if the death benefit is not equal to the Fund Value times a death benefit
percentage, the death benefit will be reduced by the amount of the partial
surrender. Under either death benefit Option, if the death benefit is based on
the Fund Value times the applicable death benefit percentage, the death benefit
may decrease by an amount greater than the partial surrender. See "Death
Benefits under the Policy," page 29.
There is a fee for each partial surrender of $10.
For information on the tax treatment of partial surrenders, see "Federal
Income Tax Considerations," page 46.
Grace Period and Lapse
Your policy will remain in effect as long as:
(1) it has a Cash Value greater than zero, and
(2) you have purchased the Guaranteed Death Benefit to Age 100 Rider, and
you have met all the requirements of the rider, and
(3) you make any required additional premium payments during the 61-day
Grace Period.
Special Rule for First Three Policy Years
During the first three policy years (or the first three policy years
following an increase in Specified Amount during that period), your policy and
any riders are guaranteed not to lapse if on each monthly anniversary day
either:
. Your policy's Cash Value is greater than zero, or
. The sum of the premiums paid minus all partial surrenders (excluding
related fees), minus any Outstanding Debt, is greater than or equal to
. The Minimum Monthly Premium times the number of months your policy has
been in effect (or number of months from the most recent increase in
Specified Amount).
Your policy may be at risk of lapse if:
. The insufficiency occurs at any other time, or
. The Minimum Monthly Premium test has not been met during the first three
policy years (as described above).
To avoid lapse if the Cash Value is insufficient to pay the current Monthly
Deduction, you must pay the necessary amount during the grace period. When an
insufficiency occurs, you may also be required to pay any unpaid loan interest
accrued for the policy year. The interest amount will also have to be paid
prior to the end of the grace period.
We will reject any payment if it means your total premium payments will
exceed the maximum permissible premium for your policy's Specified Amount under
the Internal Revenue Code. This may happen when you have Outstanding Debt. In
this event, you could repay enough of the Outstanding Debt to avoid
termination. You may also wish to repay an additional part of the Outstanding
Debt to avoid recurrence of the potential lapse. If premium payments have not
exceeded the maximum permissible premiums, you may wish to make larger or
42
more frequent premium payments to avoid recurrence of the potential lapse.
However, we will not reject any premium payments necessary to prevent lapse of
your policy.
If the Cash Value of your policy will not cover the entire monthly deduction
on a monthly anniversary day, we will deduct the amount that is available. We
will notify you (and any assignee of record) of the payment necessary to keep
your policy in effect. You will then have a grace period of 61 days, from the
date the notice was sent, to make the payment. During the first three policy
years (or within three years of an increase in Specified Amount during that
period), if the Cash Value of the policy is less than zero, you must pay:
(1) The Minimum Monthly Premium not paid, plus
(2) One succeeding Minimum Monthly Premium.
After the third policy anniversary (or after three years from the most recent
increase in Specified Amount during that period), the payment required is:
(1) The monthly deduction not paid, plus
(2) Two succeeding monthly deductions plus the amount of the deductions
from premiums for various taxes and the sales charge.
(See "Charges and Deductions -- Deductions from Premiums," page 43). The policy
will remain in effect through the grace period. If you fail to make the
necessary payment within the grace period, your coverage under the policy will
end and your policy will lapse. Necessary premium payments made during the
grace period will be allocated among the subaccounts and the Guaranteed
Interest Account. The allocation is made according to your current scheduled
premium payment allocation instructions. Any monthly deduction due will be
charged proportionately to the subaccounts and the Guaranteed Interest Account.
If the insured dies during the grace period, the death benefit proceeds will
equal:
(1) The amount of the death benefit immediately prior to the start of the
grace period, reduced by
(2) Any unpaid monthly deductions and any Outstanding Debt.
Reinstatement
We will reinstate a lapsed policy at any time:
(1) Before the maturity date, and
(2) Within five years after the monthly anniversary day which precedes
the start of the grace period.
To reinstate a lapsed policy we must also receive:
(1) A written application from you;
(2) Evidence of insurability satisfactory to us;
(3) Payment of all monthly deductions that were due and unpaid during the
grace period;
(4) Payment of an amount at least sufficient to keep your policy in
effect for one month after the reinstatement date;
(5) Payment or reinstatement of any debt on the policy anniversary at the
start of the grace period; and
(6) Payment of interest on debt reinstated from the beginning of the
grace period to the end of the grace period at the rate that applies to
policy loans on the date of reinstatement.
When your policy is reinstated, the Fund Value will be equal to the Fund
Value on the date of the lapse subject to the following:
(1) The surrender charge will be equal to the surrender charge that would
have existed had your policy been in effect since the original policy date.
43
(2) Any Outstanding Debt on the date of lapse will be reinstated.
(3) Any net premium paid for reinstatement will also be reinstated.
(4) No interest on amounts held in our Loan Account to secure Outstanding
Debt will be paid or credited between lapse and reinstatement.
Reinstatement will be effective as of the monthly anniversary day on or
preceding the date of approval by us. At that time, the Fund Value minus, if
applicable, Outstanding Debt will be allocated among the subaccounts and the
Guaranteed Interest Account pursuant to your most recent scheduled premium
payment allocation instructions.
44
CHARGES AND DEDUCTIONS
The following chart is intended to provide an overview of the current
charges and deductions under the policy. Please see the discussion of each item
in this prospectus and in the policy for further details.
Deductions from Premiums
- -------------------------------------------------------------------------------------------------------
Sales Charge -- Varies based on Specified Specified Amounts less than $500,000 --
Amount plus Term Life Term Rider amount 4% Policy Years 1-10
in effect. It is a % of Premium paid. 1% Policy Years 11 and later
Specified Amounts of $500,000 or more --
2% Policy Years 1-10
0.5% Policy Years 11 and later
- -------------------------------------------------------------------------------------------------------
Tax Charge State and local -- 0.8%
Federal -- 1.25%
- -------------------------------------------------------------------------------------------------------
Daily Deduction from MONY Variable Account L
- -------------------------------------------------------------------------------------------------------
Mortality & Expense Risk Charge -- Maximum .65% of subaccount value (0.001781% daily)
Annual Rate
- -------------------------------------------------------------------------------------------------------
Deductions from Fund Value
- -------------------------------------------------------------------------------------------------------
Cost of Insurance Charge Current cost of insurance rate x net amount at risk
at the beginning of the policy month
- -------------------------------------------------------------------------------------------------------
Administrative Charge -- monthly $5.00
- -------------------------------------------------------------------------------------------------------
Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the first 10
Based on issue age, gender and smoking Status. policy years (or for 10 years from the date of any
increase in Specified Amount)
- -------------------------------------------------------------------------------------------------------
Optional Insurance Benefits Charge Monthly As applicable.
Deduction for any other Optional Insurance
Benefits added by rider.
- -------------------------------------------------------------------------------------------------------
Transaction and Other Charges
- - Partial Surrender Fee $10
- - Transfer of Fund Value (at Company's Option) $25 maximum per transfer over 12/1/
- -------------------------------------------------------------------------------------------------------
Surrender Charge See discussion of Surrender Charge on page 44 for
Grades from 80% to 0 over 15 years based on a grading schedule.
schedule. Factors per $1,000 of Specified Amount
vary based on issue age, gender, and underwriting
class.
/1/ Currently no charge on any transfers.
The following provides additional details of the deductions from premium
payments under a policy prior to allocating net premium payments to the
subaccounts of MONY Variable Account L or to the Guaranteed Interest Account
and of the deductions from MONY Variable Account L and from the policy's Fund
Value.
45
Deductions from Premiums
Deductions are made from each premium payment prior to applying the net
premium payment to the Fund Value.
Sales Charge -- This charge varies based on the total of the
Specified Amount plus the Term Life Term Insurance
Rider amount in effect on the policy date. The
charge is a percent of each premium paid.
. Specified Amount plus any Term Life Term
Insurance amount in force less than $500,000 --
4% Policy Years 1-10 1% Policy Years 11 and
later
. Specified Amount plus any Term Life Term
Insurance amount in force of $500,000 or more
-- 2% Policy Years 1-10 0.5% Policy years 11
and later
You should refer to your policy to determine your Specified Amount and the
amount of any Term Life Term Insurance in force.
The sales charge compensates us for the cost of distributing the policies.
This charge is not expected to be enough to cover sales and distribution
expenses for the policies. To the extent that sales and distribution expenses
exceed sales charges, amounts derived from surrender charges will be used.
Expenses in excess of the sales and surrender charges may be recovered from
other charges, including amounts indirectly derived from the charge for
mortality and expense risks and mortality gains.
Tax Charge -- State and local premium tax -- currently 0.8%
Federal tax for deferred acquisition costs of the
Company -- currently 1.25%
All states levy taxes on life insurance premium payments. For policyholders
resident in the State of New York, the Company currently deducts an amount
equal to 0.8% of each premium payment to pay applicable premium taxes. These
taxes vary from state to state and may vary from jurisdiction to jurisdiction
within a state. Currently, these taxes range from 0% to 4%. The 0.8% deduction
is the actual premium tax imposed by the State of New York. We do not expect to
profit from this charge.
The 1.25% current charge against each premium covers our estimated cost for
the Federal income tax treatment of deferred acquisition costs. This is
determined solely by the amount of life insurance premiums received. We believe
this charge is reasonable in relation to our increased federal tax burden under
IRC Section 848 resulting from the receipt of premium payments. No charge will
be deducted where premiums received from you are not subject to this tax.
We reserve the right to increase or decrease the charge for taxes due to any
change in tax law or due to any change in the cost to us.
Daily Deduction From MONY Variable Account L
A charge is deducted daily from each subaccount of MONY Variable Account L
for the mortality and expense risks assumed by the Company.
Mortality and Expense
Risk Charge -- Maximum of 0.001781% of the amount in the
subaccount, which is equivalent to an annual rate of
0.65% of subaccount value.
46
This charge compensates us for assuming mortality and expense risks under
the policies. The mortality risk assumed is that insureds, as a group, may live
for a shorter period of time than estimated. Therefore, the cost of insurance
charges specified in the policy will not be enough to meet our actual claims.
We assume an expense risk that other expenses incurred in issuing and
administering the policies and operating MONY Variable Account L will be
greater than the amount estimated when setting the charges for these expenses.
We will realize a profit from this fee to the extent it is not needed to
provide benefits and pay expenses under the policies. We may use this profit
for other purposes. These purposes may include any distribution expenses not
covered by the sales charge or surrender charge.
This charge is not assessed against the amount of the policy Fund Value that
is allocated to the Guaranteed Interest Account, nor to amounts in the Loan
Account.
Deductions from Fund Value
-- A charge called the Monthly Deduction is deducted
from the Fund Value on each monthly anniversary day.
The Monthly Deduction consists of the following
items:
Cost of Insurance -- This charge compensates us for the anticipated cost
of paying death benefits in excess of Fund Value to
insureds' beneficiaries. The amount of the charge is
equal to a current cost of insurance rate multiplied
by the net amount at risk under the policy at the
beginning of each policy month. Here, net amount at
risk equals the death benefit payable at the
beginning of the policy month less the Fund Value at
that time.
The policy contains guaranteed cost of insurance rates that may not be
increased. The guaranteed rates are based on the 1980 Commissioners Standard
Ordinary Smoker and Nonsmoker Mortality Tables. (For issue ages under 18, no
smoker/nonsmoker adjustment is made until attained age 15. Where unisex cost of
insurance rates apply, the 1980 Commissioners Ordinary Smoker and Nonsmoker
Mortality Table B applies.) These rates are based on the age and underwriting
class of the insured. They are also based on the gender of the insured, but
unisex rates are used where appropriate under applicable law. Unisex laws
include the State of Montana and in policies purchased by employers and
employee organizations in connection with employment related insurance or
benefit programs. As of the date of this prospectus, we charge "current rates"
that are lower (i.e., less expensive) than the guaranteed rates. We may change
current rates in the future. Like the guaranteed rates, the current rates also
vary with the age, gender, smoking status, and underwriting class of the
insured. In addition, they also vary with the policy duration. The cost of
insurance rate generally increases with the age of the insured.
If there have been increases in the Specified Amount, then for purposes of
calculating the cost of insurance charge, the Fund Value will first be applied
to the initial Specified Amount. If the Fund Value exceeds the initial
Specified Amount, the excess will then be applied to any increase in Specified
Amount in the order of the increases. If the death benefit equals the Fund
Value multiplied by the applicable death benefit percentage, any increase in
Fund Value will cause an automatic increase in the death benefit. The
underwriting class and duration for such increase will be the same as that used
for the most recent increase in Specified Amount (that has not been eliminated
through a later decrease in Specified Amount).
Administrative Charge -- $5.00 per month
This charge reimburses us for expenses associated with administration and
maintenance of the policies. The charge is guaranteed never to exceed $5.00. We
do not expect to profit from this charge.
Monthly per $1,000
Specified Amount Charge
-- This charge applies for the first 10 years following
the issuance of the policy or an increase in the
Specified Amount. The charge is made per $1,000 of
Specified Amount based on issue age, gender, and
smoking status. The monthly per $1,000 factors are
shown in Appendix B.
47
Optional Insurance
Benefits Charge -- A monthly deduction for any other optional insurance
benefits added to the policy by rider.
Surrender Charge -- The Company will assess a surrender charge against
Fund Value upon a full surrender of the policy. The
surrender charge is based on a factor per $1,000 of
initial Specified Amount (or upon an increase in
Specified Amount) and grades from 80% to zero over
15 years base on a schedule. The factors per $1,000
vary by issue age, gender, and underwriting class.
The grading percentages (as shown below) vary based
on issue age and number of full years since the
Policy was issued (or since the increase in
Specified Amount).
Grading Percentages Percent for Issue Ages Percent for Issue Ages
Policy Years 0-75 76-85
------------------------------------------------------------------
1-3 80% 80%
------------------------------------------------------------------
4 80 70
------------------------------------------------------------------
5 80 60
------------------------------------------------------------------
6 80 50
------------------------------------------------------------------
7 80 40
------------------------------------------------------------------
8 70 30
------------------------------------------------------------------
9 60 20
------------------------------------------------------------------
10 50 10
------------------------------------------------------------------
11 40 0
------------------------------------------------------------------
12 30 0
------------------------------------------------------------------
13 20 0
------------------------------------------------------------------
14 10 0
------------------------------------------------------------------
15+ 0 0
Note: Issue ages for policies issued to Qualified Plans are limited to ages
18-70
The surrender charge is a contingent deferred load. It is a contingent load
because it is assessed only if the policy is surrendered or if the policy
lapses. It is a deferred load because it is not deducted from the premiums
paid. The purpose of the surrender charge is to reimburse us for some of the
expenses of distributing the policies.
Example: If a male insured age 35 purchases a policy with a Specified Amount
of $100,000, the per $1,000 of initial Specified Amount surrender
charge factor would be $7.25 (Preferred, nonsmoker). The maximum
surrender charge during the first seven policy years would be 80%
of (100 x 7.25) or $580.00.
The maximum surrender charge per $1,000 of initial Specified Amount factor
would be $64.00 based upon the assumptions described above and if the policy
were purchased by a male insured age 85, standard smoker.
Effect of Changes in
Specified Amount on the
Surrender Charge -- The surrender charge will increase when a new
coverage segment of Specified Amount is created due
to a requested increase in coverage. The surrender
charge related to the increase will be computed in
the same
48
manner as the surrender charge for the original
Specified Amount. It will reduce over the 15-year
period following the increase. The new surrender
charge for the policy will equal:
(1) The remaining part of the surrender charge for
the original Specified Amount, plus
(2) The surrender charge related to the increase.
Decreases in Specified Amount have no effect on
surrender charges.
Transaction and Other
Charges -- Partial Surrender Fee -- $10
Transfer of Fund Value -- $25 (at option of the
Company)
The partial surrender fee is guaranteed not to exceed $10. Currently, we do
not charge for transfers of Fund Value between the subaccounts. However, we
reserve the right to assess a $25 charge on transfers over 12 during any policy
year. This would include telephone transfers, if we permit them.
We may charge the subaccounts for federal income taxes that are incurred by
us and are attributable to MONY Variable Account L and its subaccounts. No such
charge is currently assessed. See "Charge for Company Income Taxes," page 50.
We will bear the direct operating expenses of MONY Variable Account L. The
subaccounts purchase shares of the corresponding portfolio of the underlying
Fund. The Fund's expenses are not fixed or specified under the terms of the
policy.
Guarantee of Certain Charges
We guarantee that the following charges will not increase:
(1) Mortality and expense risk charge.
(2) Administrative charge.
(3) Per $1,000 Specified Amount charge.
(4) Sales charge.
(5) Guaranteed cost of insurance rates.
(6) Surrender charge.
(7) Partial surrender fee.
Any changes in the current cost of insurance charges or charges for optional
insurance benefits will be made based on the class of the insured. Changes will
be based on changes in:
(1) Future expectations with respect to investment earnings,
(2) Mortality,
(3) Length of time policies will remain in effect,
(4) Expenses, and
(5) Taxes.
In no event will they exceed the guaranteed rates defined in the policy.
49
OTHER INFORMATION
Federal Income Tax Considerations
The following provides a general description of the federal income tax
considerations relating to the policy. This discussion is based upon our
understanding of the present federal income tax laws as the Internal Revenue
Service ("IRS") currently interprets them. This discussion is not intended as
tax advice. Tax laws are very complex and tax results will vary according to
your individual circumstances. A person considering the purchase of the policy
may need tax advice. It should be understood that these comments on federal
income tax consequences are not an exhaustive discussion of all tax questions
that might arise under the policy. Special rules that are not discussed here
may apply in certain situations. We make no representation as to the likelihood
of continuation of federal income tax or estate or gift tax laws or of the
current interpretations of the IRS or the courts. Future legislation may
adversely affect the tax treatment of life insurance policies or other tax
rules that we describe here or that relate directly or indirectly to life
insurance policies. Our comments do not take into account any state or local
income tax considerations that may be involved in the purchase of the policy.
Definition of Life Insurance
Under section 7702 of the Internal Revenue Code (the "Code"), a policy will
be treated as a life insurance policy for federal tax purposes if one of two
alternate tests are met. These tests are:
(1) "Cash Value Accumulation Test"
(2) "Guideline Premium/Cash Value Corridor Test"
Your policy is tested under the Guideline Premium/Cash Value Corridor Test.
This test provides for, among other things:
(1) A maximum allowable premium per thousand dollars of death benefit,
known as the "guideline annual premium," and
(2) A minimum ongoing "corridor" of death benefit in relation to the Fund
Value of the policy, known as the "death benefit percentage."
See Appendix A, for a table of the Guideline Premium/Cash Value Corridor Test
factors.
We believe that the policy meets this statutory definition of life insurance
and hence will receive federal income tax treatment consistent with that of
fixed life insurance. Thus, the death benefit should be excludable from the
gross income of the beneficiary (whether the beneficiary is a corporation,
individual or other entity) under Section 101(a)(1) of the Code for purposes of
the regular federal income tax. You generally should not be considered to be in
constructive receipt of the cash values under the policy until a full
surrender, maturity of the policy, or a partial surrender. In addition, certain
policy loans may be taxable in the case of policies that are modified endowment
contracts. Prospective policy owners that intend to use policies to fund
deferred compensation arrangements for their employees are urged to consult
their tax advisors with respect to the tax consequences of such arrangements.
Prospective corporate owners should consult their tax advisors about the
treatment of life insurance in their particular circumstances for purposes of
the alternative minimum tax applicable to corporations.
Tax Treatment of Policies
The Technical and Miscellaneous Revenue Act of 1988 established a new class
of life insurance contracts referred to as modified endowment contracts. A life
insurance contract becomes a "modified endowment contract" if, at any time
during the first seven contract years, the sum of actual premiums paid exceeds
the sum of the "seven-pay premium." Generally, the "seven-pay premium" is the
level annual premium, which if paid for each of the first seven years, will
fully pay for all future death and endowment benefits under a contract.
50
Example: Seven-pay premium = $1,000
Maximum premium to avoid "modified endowment" treatment =
First year -- $1,000
Through first two years -- $2,000
Through first three years -- $3,000 etc.
Under this test, a policy may or may not be a modified endowment contract. The
outcome depends on the amount of premiums paid during each of the policy's
first seven contract years. Changes in benefits may require testing to
determine if the policy is to be classified as a modified endowment contract. A
modified endowment contract is treated differently for tax purposes then a
conventional life insurance contract.
Conventional Life Insurance Policies
If a policy is not a modified endowment contract distributions are treated
as follows. Upon a full surrender or maturity of a policy for its Cash Value,
the excess if any, of the Cash Value plus Outstanding Debt minus the cost basis
under a policy will be treated as ordinary income for federal income tax
purposes. A policy's cost basis will usually equal the premiums paid less any
premiums previously recovered through partial surrenders. Under Section 7702 of
the Code, special rules apply to determine whether part or all the cash
received through partial surrenders in the first 15 policy years is paid out of
the income of the policy and therefore subject to income tax. Cash distributed
to a policy owner on partial surrenders occurring more than 15 years after the
policy date will be taxable as ordinary income to the policy owner to the
extent that it exceeds the cost basis under a policy.
We believe that loans received under policies that are not modified
endowment contracts will be treated as indebtedness of the owner. Thus, no part
of any loan under the policy will constitute income to the owner until the
policy matures, unless the policy is surrendered before it matures. Interest
paid (or accrued by an accrual basis taxpayer) on a loan under a policy that is
not a modified endowment contract may be deductible. Deductibility will be
subject to several limitations, depending upon (1) the use to which the
proceeds are put and (2) the tax rules applicable to the policy owner. For
example, an individual who uses the proceeds of a loan for business or
investment purposes may be able to deduct all or part of the interest expense.
Generally, if an individual uses the policy loan for personal purposes, the
interest expense is not deductible. The deductibility of loan interest (whether
incurred under a policy loan or other indebtedness) also may be subject to
other limitations.
For example, the interest may be deductible to the extent that the interest
is attributable to the first $50,000 of the Outstanding Debt where:
. The interest is paid (or accrued by an accrual basis taxpayer) on a loan
under a policy, and
. The policy covers the life of an officer, employee, or person financially
interested in the trade or business of the policy owners.
Other tax law provisions may limit the deduction of interest payable on loan
proceeds that are used to purchase or carry certain life insurance policies.
Modified Endowment Contracts
Pre-death distributions from modified endowment contracts may result in
taxable income. Upon full surrender or maturity of the policy, the policy owner
would recognize ordinary income for federal income tax purposes. Ordinary
income will equal the amount by which the Cash Value plus Outstanding Debt
exceeds the investment in the policy. (The investment in the policy is usually
the premiums paid plus certain pre-death distributions that were taxable less
any premiums previously recovered that were excludable from gross income.) Upon
partial surrenders and policy loans the policy owner would recognize ordinary
income to the extent allocable to income (which includes all previously
non-taxed gains) on the policy. The amount allocated to income is the amount by
which the Fund Value of the policy exceeds investment in the policy immediately
51
before distribution. The tax law provides for aggregation of two or more
policies classified as modified endowment contracts if:
(1) The policies are purchased from any one insurance company (including
the Company), and
(2) The purchases take place during a calendar year.
The policies are aggregated for the purpose of determining the part of the
pre-death distributions allocable to income on the policies and the part
allocable to investment in the policies.
Amounts received under a modified endowment contract that are included in
gross income are subject to an additional tax. This additional tax is equal to
10% of the amount included in gross income, unless an exception applies. The
10% additional tax does not apply to any amount received:
(1) When the taxpayer is at least 591/2 years old;
(2) Which is attributable to the taxpayer becoming disabled; or
(3) Which is part of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of the
taxpayer and his or her beneficiary.
A contract may not be a modified endowment contract originally but may
become one later. Treasury Department regulations, yet to be prescribed, cover
pre-death distributions received in anticipation of the policy's failure to
meet the seven-pay premium test. These distributions are to be treated as
pre-death distributions from a modified endowment contract (and, therefore, are
to be taxed as described above). This treatment is applied even though the
policy was not yet a modified endowment contract. The Code defines a
distribution in anticipation of failing the test as one made within two years
of the policy being classified as a modified endowment contract.
It is unclear whether interest paid (or accrued by an accrual basis
taxpayer) on Outstanding Debt with respect to a modified endowment contract
constitutes interest for federal income tax purposes. If it does constitute
interest, its deductibility will be subject to the same limitations as
conventional life insurance contracts (see "Conventional Life Insurance
Policies," page 47.)
Reasonableness Requirement for Charges
The tax law also deals with allowable mortality costs and other expenses
used in the calculations to determine whether a contract qualifies as life
insurance for income tax purposes. For policies entered into on or after
October 21, 1988, the calculations must be based upon, (1) reasonable mortality
charges, and (2) other charges reasonably expected to be paid. The Treasury
Department is expected to declare regulations governing reasonableness
standards for mortality charges. We believe our mortality costs and other
expenses used in these calculations meet the current requirements. It is
possible that future regulations will contain standards that would require us
to modify our mortality charges for these calculations. We reserve the right to
make modifications to retain the policy's qualification as life insurance for
federal income tax purposes.
Pension and Profit Sharing Plans
Policies purchased by a fund, which is part of a pension or profit sharing
plan (under Sections 401(a) or 403 of the Code), will be treated differently
from that described above. For participants in these plans, the current cost of
insurance for the net amount at risk is treated as a "current fringe benefit."
The current cost of insurance must be included annually in the plan
participant's gross income. This cost (referred to as the "P.S. 58" cost) is
reported to the participant annually. The excess of the death benefit over the
policy Fund Value will not be subject to federal income tax if:
(1) The plan participant dies while covered by the plan, and
52
(2) The policy proceeds are paid to the participant's beneficiary.
However, the policy Fund Value will generally be taxable to the extent it
exceeds the sum of (1) $5,000 plus (2) the participant's cost basis in the
policy. The participant's cost basis will generally include the costs of
insurance previously reported as income to the participant. Special rules may
apply if the participant has borrowed from his or her policy or was an
owner-employee under the plan.
There are limits on the amounts of life insurance that may be purchased on
behalf of a participant in a pension or profit sharing plan. Complex rules, in
addition to those discussed above, apply whenever life insurance is purchased
by a tax-qualified plan.
Other Employee Benefit Programs
Complex rules may apply when a policy is held by an employer or a trust, or
acquired by an employee, to provide for employee benefits. These policy owners
also must consider whether the policy was applied for by or issued to a person
having an insurable interest under applicable state law. The lack of insurable
interest may, among other things, affect the qualification of the policy as
life insurance for federal income tax purposes. It may also affect the right of
the beneficiary to death benefits. Employers and employer-created trusts may be
subject to reporting, disclosure, and fiduciary obligations under the Employee
Retirement Income Security Act of 1974 (ERISA). The policy owner's legal
advisor should be consulted to address these issues.
Diversification Requirements
To comply with regulations under Section 817(h) of the Code, each portfolio
is required to diversify its investments. Generally, on the last day of each
quarter of a calendar year,
(1) No more than 55% of the value of the portfolio's assets can be
represented by any one investment,
(2) No more than 70% can be represented by any two investments,
(3) No more than 80% can be represented by any three investments, and
(4) No more than 90% can be represented by any four investments.
Securities of a single issuer generally are treated for purposes of Section
817(h) as a single investment. However, for this purpose, each U.S. Government
agency or instrumentality is treated as a separate issuer. Any security issued,
guaranteed, or insured (to the extent guaranteed and insured) by the U.S. or by
an agency or instrumentality of the U.S. is treated as a security issued by the
U.S. Government or its agency or instrumentality, as applicable.
Currently, for federal income tax purposes, the portfolio shares underlying
the subaccounts available under the policies are owned by the Company and not
by you or any beneficiary. However, no representation is or can be made
regarding the likelihood of the continuation of current interpretations by the
IRS.
Other
Federal estate and gift and state and local estate, inheritance, and other
tax consequences of ownership or receipt of policy proceeds depend on the
jurisdiction and the circumstances of each owner or beneficiary.
For complete information on federal, state, local and other tax
considerations, a qualified tax advisor should be consulted.
53
The Company Does Not Make Any Guarantee Regarding
The Tax Status Of Any Policy
Charge for Company Income Taxes
For federal income tax purposes, variable life insurance generally is
treated in a manner consistent with fixed life insurance. The Company will
review the question of a charge to the Variable Account for the Company's
federal income taxes periodically. A charge may be made for any federal income
taxes incurred by the Company that are attributable to the Variable Account.
This might become necessary if:
(1) The tax treatment of the Company is ultimately determined to be other
than what the Company currently believes it to be,
(2) There are changes made in the federal income tax treatment of
variable life insurance at the insurance company level, or
(3) There is a change in the Company's tax status.
Under current laws, the Company may incur state and local taxes (in addition
to premium taxes imposed by the states) in several states. At present, these
taxes are not significant. If there is a material change in applicable state or
local tax laws or in the cost to the Company, the Company reserves the right to
charge the Account for any such taxes attributable to the Account.
Voting of Fund Shares
Based on its view of present applicable law, the Company will exercise
voting rights attributable to the shares of each portfolio of the Funds held in
the subaccounts. We will exercise such rights at any regular and special
meetings of the shareholders of the Funds on matters requiring shareholder
voting under the Investment Company Act of 1940. Our exercise of these voting
rights will be based on instructions received from persons having the voting
interest in corresponding subaccounts of MONY Variable Account L. We may elect
to vote the shares of the Funds in our own right if:
(1) The Investment Company Act of 1940 or any regulations thereunder is
amended, or
(2) The present interpretation of the Act should change, and
(3) As a result we determine that it is permitted to vote the shares of
the Funds in our right.
The person having the voting interest under a policy is the policy owner.
Unless otherwise required by applicable law, a policy owner will have the right
to instruct for the number of votes of any portfolio determined by dividing his
or her Fund Value in the subaccount that corresponds to the portfolio by $100.
Fractional votes will be counted. The number policy owner votes will be
determined as of the date set by the Company. However, such date will not be
more than 90 days prior to the date established by the corresponding Fund for
determining shareholders eligible to vote at that Fund's meeting. If required
by the Securities and Exchange Commission, the Company reserves the right to
determine the voting rights in a different fashion. Voting instructions may be
cast in person or by proxy.
If the Company does not receive voting instructions from the policy owner on
time, the Company will vote his or her votes. The Company will vote in the same
proportion as voting instructions received on time for all policies
participating in that subaccount. The Company will also exercise the voting
rights from assets in each subaccount, which are not otherwise attributable to
policy owners. These votes will be exercised in the same proportion as the
voting instructions that are received on time for all policies participating in
that subaccount. Generally, the Company will vote any voting rights
attributable to shares of portfolios of the Funds held in its General Account.
These votes will be exercised in the same proportion as the aggregate votes
cast with respect to shares of portfolios of the Funds held by MONY Variable
Account L and other separate accounts of the Company.
54
Disregard of Voting Instructions
The Company may disregard voting instructions when required by state
insurance regulatory authorities, if, (1) the instructions require that voting
rights be exercised so as to cause a change in the subclassification or
investment objective of a Portfolio, or (2) to approve or disapprove an
investment advisory contract. In addition, the Company itself may disregard
voting instructions of changes initiated by policy owners in the investment
policy or the investment adviser (or portfolio manager) of a portfolio. The
Company's disapproval of such change must be reasonable and must be based on a
good faith determination that the change would be contrary to state law or
otherwise inappropriate, considering the portfolio's objectives and purpose,
and considering the effect the change would have on the Company. If the Company
does disregard voting instructions; a summary of that action and the reasons
for such action will be included in the next report to policy owners.
Report to Policy Owners
A statement will be sent at least annually to each policy owner setting
forth:
(1) A summary of the transactions which occurred since the last
statement, and
(2) Indicating the death benefit, Specified Amount, Fund Value, Cash
Value, and any Outstanding Debt.
In addition, the statement will indicate the allocation of Fund Value among
the Guaranteed Interest Account, the Loan Account and the subaccounts, and any
other information required by law. Confirmations will be sent out upon premium
payments, transfers, loans, loan repayments, withdrawals, and surrenders.
Each policy owner will also receive an annual and a semiannual report
containing financial statements for MONY Variable Account L and the Funds. The
Funds' statement will include a list of the portfolio securities of the Funds,
as required by the Investment Company Act of 1940, and/or such other reports as
may be required by federal securities laws.
Substitution of Investments and Right to Change Operations
The Company reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for the
securities that are held by or may be purchased by MONY Variable Account L or
any of its other separate accounts. The Company may substitute shares of
another portfolio of the Funds or of a different fund for shares already
purchased, or to be purchased in the future under the policies if:
(1) Shares of any or all of the portfolios of the Funds should no longer
be available for investment or,
(2) In the judgment of the Company's management, further investment in
shares of any or all portfolios of the Funds should become inappropriate in
view of the purposes of the policies.
Where required, the Company will not substitute any shares attributable to a
policy owner's interest in MONY Variable Account L without notice, policy owner
approval, or prior approval of the Securities and Exchange Commission. The
Company will also follow the filing or other procedures established by
applicable state insurance regulators. Applicable state insurance regulators
include the Superintendent of Insurance of the State of New York.
The Company also reserves the right to establish additional subaccounts of
MONY Variable Account L. Each additional subaccount would invest in (1) a new
portfolio of the Funds, or (2) in shares of another investment company, a
portfolio thereof, or (3) another suitable investment vehicle, with a specified
investment objective. New subaccounts may be established when, in the sole
discretion of the Company, marketing needs or investment conditions warrant,
and any new Subaccounts will be made available to existing Policy Owners on a
basis to be determined by the Company. The Company may also eliminate one or
more subaccounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant.
55
If a substitution or change is made, the Company may make changes in this
and other policies as may be necessary or appropriate to reflect such
substitution or change. If the Company considers it to be in the best interests
of persons having voting rights under the policies, MONY Variable Account L may:
(1) Be operated as a management investment company under the Investment
Company Act of 1940 or any other form permitted by law,
(2) Be deregistered under that Act if such registration is no longer
required, or
(3) Be combined with other separate accounts of the Company or an
affiliate thereof.
Subject to compliance with applicable law, the Company also may combine one or
more Subaccounts and may establish a committee, board, or other group to manage
one or more aspects of the operation of MONY Variable Account L.
Changes to Comply with Law
The Company reserves the right to make any change without consent of policy
owners to the provisions of the policy to comply with, or give policy owners
the benefit of, any Federal or State statute, rule, or regulation. Federal and
State laws include but not limited to requirements for life insurance contracts
under the Internal Revenue Code, and regulations of the United States Treasury
Department or any state.
PERFORMANCE INFORMATION
We may advertise the performance of the MONY Variable Account L subaccounts.
We will also report performance to policy owners and may make performance
information available to prospective purchasers. This information will be
presented in compliance with applicable law.
Performance information may show the change in a policy owner's Fund Value
in one or more subaccounts, or as a change in a policy owner's death benefit.
Performance information may be expressed as a change in a policy owner's Fund
Value over time or in terms of the average annual compounded rate of return on
the policy owner's Fund Value. Such performance is based upon a hypothetical
policy in which premiums have been allocated to a particular subaccount of MONY
Variable Account L over certain periods of time that will include one, five and
ten years, or from the commencement of operation of the subaccount of MONY
Variable Account L if less than one, five, or ten years. Any such quotation may
reflect the deduction of all applicable charges to the policy including premium
load, the cost of insurance, the administrative charge, and the mortality and
expense risk charge. The quotation may also reflect the deduction of the
surrender charge, if applicable, by assuming surrender at the end of the
particular period. However, other quotations may simultaneously be given that
do not assume surrender and do not take into account deduction of the surrender
charge.
Performance information for MONY Variable Account L may be compared in
advertisements, sales literature, and reports to policy owners to:
(1) Other variable life separate accounts or investment products tracked
by research firms, ratings services, companies, publications, or persons who
rank separate accounts or investment products on overall performance or
other criteria, and
(2) The Consumer Price Index (measure for inflation) to assess the real
rate of return from the purchase of a policy.
Reports and promotional literature may also contain the Company's rating or a
rating of the Company's claim paying ability as determined by firms that
analyze and rate insurance companies and by nationally recognized statistical
rating organizations.
56
Performance information for any subaccount of MONY Variable Account L
reflects only the performance of a hypothetical policy whose Fund Value is
allocated to MONY Variable Account L during a particular time period on which
the calculations are based. Performance information should be considered in
light of the investment objectives and policies, characteristics and quality of
the portfolios of the Funds in which MONY Variable Account L invests. The
market conditions during the given period of time should not be considered as a
representation of what may be achieved in the future.
We may also use non-standard performance in cases where we add new
subaccounts which purchase shares of underlying funds in existence prior to the
formation of such subaccounts. In such cases we will use the historical
performance of the underlying fund with the current expenses of the applicable
subaccount under the Contract.
THE GUARANTEED INTEREST ACCOUNT
You may allocate all or a portion of your net premiums and transfer Fund
Value to the Guaranteed Interest Account of the Company. Amounts allocated to
the Guaranteed Interest Account become part of the "General Account" of the
Company, which supports insurance and annuity obligations. The amounts
allocated to the General Account of the Company are subject to the liabilities
arising from the business the Company conducts. Descriptions of the Guaranteed
Interest Account are included in this Prospectus for the convenience of the
purchaser. The Guaranteed Interest Account and the General Account of the
Company have not been registered under the Securities Act of 1933 and the
Investment Company Act of 1940. Accordingly, neither the Guaranteed Interest
Account nor any interest therein is generally subject to the provisions of
these Acts and, as a result, the staff of the Securities and Exchange
Commission has not reviewed the disclosure in this prospectus relating to the
Guaranteed Interest Account. Disclosures regarding the Guaranteed Interest
Account may, however, be subject to certain generally applicable provisions of
the federal securities laws relating to the accuracy and completeness of
statements made in the prospectus. For more details regarding the Guaranteed
Interest Account, see the policy.
General Description
Amounts allocated to the Guaranteed Interest Account become part of the
General Account of Company which consists of all assets owned by the Company
other than those in MONY Variable Account L and other separate accounts of the
Company. Subject to applicable law, the Company has sole discretion over the
investment of the assets of its General Account.
You may elect to allocate net premiums to the Guaranteed Interest Account,
MONY Variable Account L, or both. You may also transfer Fund Value from the
subaccounts of MONY Variable Account L to the Guaranteed Interest Account or
from the Guaranteed Interest Account to the subaccounts. The Company guarantees
that the Fund Value in the Guaranteed Interest Account will be credited with a
minimum interest rate of 0.0121% daily, compounded daily, for a minimum
effective annual rate of 4.5%. Such interest will be paid regardless of the
actual investment experience of the Guaranteed Interest Account. In addition,
Company may in its sole discretion declare current interest in excess of the
4.5% annual rate. (The portion of a Policy Owner's Fund Value that has been
used to secure Outstanding Debt will be credited with a guaranteed interest
rate of 0.0121% daily, compounded daily, for a minimum effective annual rate of
4.5%.) Prior to the beginning of each calendar month, an interest rate will be
declared. The declared rate will apply to premium payments and transfers into
the Guaranteed Interest Account made during the calendar month. The calendar
year and month the payment or transfer is made determines the "generation" of
such monies. The current interest will be credited from the date of the payment
or transfer for a period of 12 months beginning the first day of the monthly
generation to which the payment or transfer is assigned. After the first 12
months, a renewal interest rate will be declared for a new 12-month period. At
the end of the renewal period all monies will earn an interest rate which is
declared monthly and applies for a one-month period.
The Company bears the full investment risk for the Fund Value allocated to
the Guaranteed Interest Account.
57
Death Benefit
The death benefit under the policy will be determined in the same fashion if
you have Fund Value in the Guaranteed Interest Account or Fund Value in the
subaccounts. The death benefit under Option 1 will be equal to the Specified
Amount of the Policy or, if greater, Fund Value on the date of death multiplied
by a death benefit percentage. Under Option 2, the Death Benefit will be equal
to the Specified Amount of the Policy plus the Fund Value or, if greater, Fund
Value on the date of death multiplied by a death benefit percentage. See "Death
Benefits under the Policy," page 29.
Policy Charges
Deductions from premium, monthly deductions from the Fund Value, and Fund
charges will be the same if you allocate net premiums or transfer Fund Value to
the Guaranteed Interest Account or allocate net premiums to the subaccounts.
These charges include the sales and tax charges; the charges for the cost of
insurance, administrative charge, per $1,000 of Specified Amount charge, the
charge for any optional insurance benefits added by Rider, and the surrender
charge. Fees for partial surrenders and, if applicable, transfer charges, will
also be deducted from the Guaranteed Interest Account.
You will not directly or indirectly pay charges applicable to the
portfolios, including the operating expenses of the portfolios, and the
investment advisory fee charged by the portfolio managers if your Fund Value is
allocated to the Guaranteed Interest Account. Likewise, the mortality and
expense risk charge applicable to the Fund Value allocated to the subaccounts
is not deducted from Fund Value allocated to the Guaranteed Interest Account.
Any amounts that the Company pays for income taxes allocable to the subaccounts
will not be charged against the Guaranteed Interest Account. However, it is
important to remember that you will not participate in the investment
experience of the subaccounts to the extent that Fund Values are allocated to
the Guaranteed Interest Account.
Transfers
Amounts may be transferred after the Right to Return Policy Period from the
subaccounts to the Guaranteed Interest Account and from the Guaranteed Interest
Account to the subaccounts, subject to the following limitations.
. Transfers to the Guaranteed Interest Account may be made at any time and
in any amount.
. Transfers from the Guaranteed Interest Account to the subaccounts are
limited to:
. one in any policy year, and
. the period which begins on the policy anniversary and which ends 30 days
after the policy anniversary.
If the transfer request is received on the policy anniversary, it will be
processed as of the policy anniversary. If the transfer request is received
within 30 days after the policy anniversary, the transfer will be effective as
of the close of business on the day received if it is a Business Day. If it is
not a Business Day, then at the close of business on the next day which is a
Business Day. Any request received within 10 days before the policy anniversary
will be considered received on the policy anniversary. Any transfer requests
received at other times will not be honored, and will be returned to the policy
owner.
Currently there is no charge imposed upon transfers; however, the Company
reserves the right to assess such a charge in the future on transfers over 12
during any policy year.
Surrenders and Policy Loans
You may also make full surrenders and partial surrenders from the Guaranteed
Interest Account to the same extent as if you had allocated premiums and cash
values to the subaccounts. See "Full Surrender," page 39 and
58
"Partial Surrender", page 39. Transfers and surrenders payable from the
Guaranteed Interest Account, and the payment of policy loans allocated to the
Guaranteed Interest Account, may be delayed for up to six months. However, the
Company will not delay payment of surrenders or loans, the proceeds of which
will be used to pay premiums on the policy.
MORE ABOUT THE POLICY
Ownership
The policy owner is the individual named as such in the application or in
any later change shown in the Company's records. While the insured is living,
the policy owner alone has the right to receive all benefits and exercise all
rights that the policy grants or the Company allows.
Joint Owners
If more than one person is named as policy owner, they are joint owners. Any
policy transaction requires the signature of all persons named jointly. Unless
otherwise provided, if a joint owner dies, ownership passes to the surviving
joint owner(s). When the last joint owner dies, ownership passes through that
person's estate, unless otherwise provided.
Beneficiary
The beneficiary is the individual named as such in the application or any
later change shown in the Company's records. The policy owner may change the
beneficiary at any time during the life of the insured by written request on
forms provided by the Company. The Company must receive the request at its
administrative office. The change will be effective as of the date this form is
signed. Contingent and/or concurrent beneficiaries may be designated. The
policy owner may designate a permanent beneficiary, whose rights under the
policy cannot be changed without his or her consent. Unless otherwise provided,
if no designated beneficiary is living upon the death of the insured, the
policy owner or the policy owner's estate is the beneficiary.
The Company will pay the death benefit proceeds to the beneficiary. Unless
otherwise provided, the beneficiary must be living at the time of the insured's
death to receive the proceeds.
The Policy
This Policy is a contract between the policy owner and the Company. The
entire contract consists of the policy, a copy of the initial application, all
subsequent applications to change the policy, any endorsements, all riders, and
all additional policy information sections (specification pages) added to the
policy.
Notification and Claims Procedures
Any election, designation, change, assignment, or request made by you must
be in writing on a form acceptable to the Company. The Company is not liable
for any action taken before such written notice is received and recorded. The
Company may require that the policy be returned for any policy change or upon
its surrender.
If an insured dies while the policy is in effect, notice should be given to
the Company as soon as possible. Claim procedure instructions will be sent
immediately. As due proof of death, the Company may require proof of age and a
certified copy of a death certificate. The Company may also require the
beneficiary and the insured's next of kin to sign authorizations as part of
this process. These authorization forms allow the Company to obtain information
about the insured, including but not limited to medical records of physicians
and hospitals used by the insured.
59
Payments
Within seven days after the Company receives all the information needed for
processing a payment, the Company will:
(1) Pay death benefit proceeds,
(2) Pay the Cash Value on surrender, partial surrenders and loan proceeds
based on allocations made to the subaccounts, and
(3) Effect a transfer between subaccounts or from the Variable Account to
the Guaranteed Interest Account.
However, the Company can postpone the calculation or payment of such a
payment or transfer of amounts based on investment performance of the
subaccounts if:
. The New York Stock Exchange is closed on other than customary weekend and
holiday closing or trading on the New York Stock Exchange is restricted as
determined by the SEC; or
. An emergency exists, as determined by the SEC, as a result of which
disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Account's net assets.
We will pay interest on death proceeds at the rate specified by the state in
which the policy is delivered. Interest will be paid from the date of death to
date of payment of proceeds.
Payment Plan/Settlement Provisions
Maturity or surrender benefits may be used to purchase a payment plan
providing monthly income for the lifetime of the Insured. Death benefit
proceeds may be used to purchase a payment plan providing monthly income for
the lifetime of the beneficiary. The monthly payments consisting of proceeds
plus interest will be paid in equal installments for at least ten years. The
purchase rates for the payment plan are guaranteed not to exceed those shown in
the policy, but current rates that are lower (i.e., providing greater income)
may be established by the Company from time to time. This benefit is not
available if the income would be less than $25 a month or if the proceeds are
less than $1,000. Maturity or surrender benefits or death benefit proceeds may
be used to purchase any other payment plan that the Company makes available at
that time.
Payment in Case of Suicide
If the insured dies by suicide, (1) while sane or insane, (2) within two
years from the policy date or reinstatement date, the Company will limit the
death benefit proceeds to the premium payments less any partial surrender
amounts (and their fees) and any Outstanding Debt. If an insured dies by
suicide, (1) while sane or insane, (2) within two years of the effective date
of any increase in the Specified Amount, the Company will refund the cost of
insurance charges made with respect to such increase.
Assignment
You may assign your policy as collateral security for a loan or other
obligation. No assignment will bind the Company unless the original, or a copy,
is received at the Company's administrative office. The assignment will be
effective only when received by the Company. An assignment does not change the
ownership of the policy. However, after an assignment, the rights of any policy
owner or beneficiary will be subject to the assignment. The entire policy,
including any attached payment option or rider, will be subject to the
assignment. The Company will rely solely on the assignee's statement as to the
amount of the assignee's interest. The Company will not be responsible for the
validity of any assignment. Unless otherwise provided, the assignee may
exercise all rights this policy grants except (a) the right to change the
policy owner or beneficiary, and (b) the right to elect a payment option.
Assignment of a policy that is a modified endowment contract may generate
taxable income. (See "Federal Income Tax Considerations", page 46.)
60
Errors on the Application
If the age or gender of the insured has been misstated, the death benefit
under this policy will be the greater of:
(1) What would be purchased by the most recent cost of insurance charge
at the correct age and gender, or
(2) The death benefit derived by multiplying the Fund Value by the death
benefit percentage for the correct age and gender.
If unisex cost of insurance rates apply, no adjustment will be made for a
misstatement of gender. See "Cost of Insurance," page 44.
Incontestability
The Company may contest the validity of this policy if any material
misstatements are made in the application. However, the policy will be
incontestable as follows:
(1) The initial Specified Amount cannot be contested after the policy has
been in force during the insured's lifetime for two years from the policy
date; and
(2) An increase in the Specified Amount or any reinstatement cannot be
contested after the increase or the reinstated policy has been in force
during an Insured's lifetime for two years from its effective date.
Policy Illustrations
Upon request, the Company will send you an illustration of future benefits
under the policy based on both guaranteed and current cost assumptions.
Distribution of the Policy
MONY Securities Corporation ("MSC"), a wholly owned subsidiary of MONY Life
Insurance Company, is principal underwriter (distributor) of the policies. MSC
is a New York corporation organized on September 26, 1969. MSC is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers. The policies are sold by
individuals who are registered representatives of MSC and who are also licensed
as life insurance agents for the Company. The policies may also be sold through
other broker/dealers authorized by MSC and applicable law to do so.
Except where MSC has authorized other broker/dealers to sell the policies
(as described in the preceding paragraph), compensation payable for the sale of
the policies will be based upon the following schedule. After issue of the
Contract, commissions will equal at most 50 percent of premiums paid up to a
maximum amount. Thereafter, commissions will equal at most 3.0 percent of any
additional premiums plus, on the sixth and each succeeding quarterly
anniversary for so long as the policy shall remain in effect, an annualized
rate of 0.15 percent of the Fund Value of the policy. Upon any subsequent
increase in Specified Amount, commissions will equal at most 50 percent of
premiums paid on or after the increase up to a maximum amount. Thereafter,
commissions will return to no more than the 3.0 percent level. Further,
registered representatives may be eligible to receive certain bonuses and other
benefits based on the amount of earned commissions.
In addition, registered representatives who meet specified production levels
may qualify, under sales incentive programs adopted by Company, to receive
non-cash compensation such as expense-paid trips, expense-paid educational
seminars and merchandise. Company makes no separate deductions, other than
previously described, from premiums to pay sales commissions or sales expenses.
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MORE ABOUT THE COMPANY
Management
The directors and officers of the Company are listed below. The business
address for all directors and officers of MONY Life Insurance Company is 1740
Broadway, New York, New York 10019.
Current Officers and Directors of the Company are:
Name Position and Offices with Depositor
- ---- -----------------------------------
Tom H. Barrett........ Director since 1990. Partner in American Industrial Partners, a
private investment partnership since 1992. Serves on the board
of directors of Air Products and Chemicals, Inc., A.O. Smith
Corporation and Newell Rubbermaid, Incorporated.
David L. Call......... Director since 1993. Dean Emeritus, Cornell University,
College of Agriculture and Life Sciences since 1995. Serves as
small business consultant and is a director of Seneca Foods
Corporation.
G. Robert Durham...... Director since 1988. Retired from Walter Industries, Inc., a
home building and financing, natural resources and industrial
manufacturing company in 1996 after serving as Chairman of
the Board and Chief Executive Officer since 1991. Serves on
the board of directors of The FINOVA Group, Inc., Amphenol
Corporation and Earle M. Jorgensen Co.
James B. Farley....... Director since 1988. Retired from MONY Life Insurance
Company in 1994 after serving as Chairman of the Board from
1993 and Chairman of the Board and Chief Executive Officer
since 1991. Serves on the board of directors of Ashland, Inc.
and Harrah's Entertainment, Inc. and is a Trustee of the Forster
Trust.
Robert Holland, Jr.... Director since 1990. Owner and Chief Executive Officer of
WorkPlace Integrators, an office furniture dealership in
Southeast Michigan, since 1996. Chief Executive Officer of
Ben & Jerry's Homemade, Inc., an ice cream company from
February 1995 to October 1996. Serves on the board of
directors of AC Nielsen Corporation, Henry Ford Health
System, Tricon Global Restaurants, Inc., Trumark Inc. and
Lexmark International, and is on the Advisory Board of
Boardroom Consultants.
James L. Johnson...... Director since 1986. Chairman Emeritus of GTE Corporation,
a telecommunications company, having served as Chairman
and Chief Executive Officer from 1988 to 1992. Serves on the
board of directors of CellStar Corporation, The FINOVA
Group, Inc., Harte-Hanks Communications, Inc., Valero
Energy Corp. and Walter Industries, Inc.
Frederick W. Kanner... Director since March 2000. Partner of Dewey Ballantine LLP
since 1976, and an Associate of said firm prior to that time.
Serves on the Board of Trustees of the Lawyers' Alliance for
New York and the Lawyers' Committee for Civil Rights under
Law.
62
Name Position and Offices with Depositor
- ---- -----------------------------------
Robert R. Kiley......... Director since 1995. President and Chief Executive Officer of
the New York City Partnership and Chamber of Commerce,
Inc. since 1995. Principal of Kohlberg & Co. since 1994.
Serves on the board of directors of the New York City
Partnership and Chamber of Commerce, Inc.
Jane C. Pfeiffer........ Director since 1988. Ms. Pfeiffer is an independent
management consultant. Serves on the board of directors of
Ashland, Inc., International Paper Company and J.C. Penney
Company, Inc. and is trustee of the University of Notre Dame
and a member of The Council on Foreign Relations.
Thomas C. Theobald...... Director since 1990. Managing director, William Blair Capital
Partners, L.L.C., an investment firm since 1994. Serves on the
board of directors of Anixter International, Inc., Xerox Corp.,
Jones Lang LaSalle, Inc., LaSalle US Realty Income and
Growth Fund, Stein Roe Funds, AuditForce, Inc. and
MacArthur Foundation.
All of the officers have held their respective positions listed below for five
or more years.
Name Position and Offices with Depositor
- ---- -----------------------------------
Current Officer -- Directors of the Company
are:
Michael I. Roth............................ Director, Chairman and Chief Executive Officer
Samuel J. Foti............................. Director, President and Chief Operating Officer
Kenneth M. Levine.......................... Director, Executive Vice President and Chief Investment
Officer
Name Office with Depositor
- ---- ---------------------
Other Officers of the Company are:
Lee M. Smith...................... Corporate Secretary and Vice President, Government Relations
Richard E. Connors................ Senior Vice President
Richard Daddario.................. Executive Vice President and Chief Financial Officer
Phillip A. Eisenberg.............. Senior Vice President and Chief Actuary
David V. Weigel................... Treasurer
No officer or director listed above receives any compensation from MONY
Variable Account L. The Company or any of its affiliates has paid no separately
allocable compensation to any person listed for services rendered to the
Account.
Mr. Roth is Chairman of the Board and Chief Executive Officer (since August
1998) and Director (since September 1997) of The MONY Group, Inc. Chairman of
the Board and Chief Executive Officer (since July 1991) and Director (since
June 1991) of MONY Life Insurance Company of America. Director of MONY
subsidiaries: 1740 Advisers, Inc. (since December 1992), MONY Benefits
Management Corp. (since March 1999). Serves on the board of directors of the
American Council of Life Insurance, The Life Insurance Council of New York,
Enterprise Foundation (a charitable foundation which develops housing not
affiliated with the Enterprise Group of Funds), Metropolitan Development
Association of Syracuse and Central New York, Enterprise Group of Funds, Inc.,
Enterprise Accumulation Trust, Pitney Bowes, Inc., Lincoln Center for the
Performing Arts Leadership Committee, Life Office Management Association, New
York City Partnership and Chamber of Commerce, and Committee for Economic
Development. Also serves as Chairman of the Board of Insurance Marketplace
Standards Association.
63
Mr. Foti is President and Chief Operating Officer (since August 1998) and
Director (since September 1997) of The MONY Group, Inc. President and Chief
Operating Officer of MONY Life Insurance Company of America (since February
1994) and Director (since September 1989). Director of MONY subsidiaries: MONY
Brokerage, Inc. (since January 1990), MONY International Holdings, Inc. (since
October 1994), MONY Life Insurance Company of the Americas, Ltd. (since
December 1994). Serves on the board of directors of Enterprise Group of Funds,
Inc., Enterprise Accumulation Trust and The American College of which he is
Chairman.
Mr. Levine is Executive Vice President and Chief Investment Officer (since
August 1998) and Director (since September 1997) of The MONY Group Inc.
Chairman of the Board (since December 1991) and President (since June 1992) of
MONY Series Fund, Inc. Director of MONY subsidiaries: MONY Life Insurance
Company of America (since July 1991), 1740 Advisers, Inc. (since December
1989), MONY Benefits Management Corp. (since October 1991), MONY Realty
Partners, Inc. (since October 1991) and 1740 Ventures, Inc. (since October
1991).
Mr. Daddario is Executive Vice President and Chief Financial Officer (since
August 1998) of The MONY Group, Inc. Vice President and Controller of MONY Life
Insurance Company of America (since September 1989). Director of MONY
subsidiaries: MONY International Holdings, Inc. (since 1998), MONY Brokerage,
Inc. (since June 1997) and MONY Life Insurance Company of the Americas, Ltd.
(since December 1997).
Mr. Eisenberg is Vice President and Actuary (since November 1992) and
Director of MONY Life Insurance Company of America. Director of MONY
subsidiary: MONY Benefits Management Corp. (since March 1999).
Mr. Smith is Vice President and Secretary (since September 1999) of The MONY
Group Inc. Vice President -- Government Relations and Industry Affairs.
Mr. Connors is Director of MONY Life Insurance Company of America (since
June 1994). Director of MONY subsidiary: MONY Brokerage, Inc. (since May 1994).
Mr. Weigel is Vice President-Treasurer of The MONY Group Inc. (since August
1998). Treasurer of MONY Life Insurance Company of America (since July 1991).
State Regulation
The Company is subject to the laws of the state of New York governing
insurance companies and to regulation by the Superintendent of Insurance of New
York. In addition, it is subject to the insurance laws and regulations of the
other states and jurisdictions in which it is licensed or may become licensed
to operate. An annual statement in a prescribed form must be filed with the
Superintendent of Insurance of New York and with regulatory authorities of
other states on or before March 1st in each year. This statement covers the
operations of the Company for the preceding year and its financial condition as
of December 31st of that year. The Company's affairs are subject to review and
examination at any time by the Superintendent of Insurance or his agents, and
subject to full examination of Company's operations at periodic intervals.
Telephone Transfer Privileges
You may request a transfer of Fund Value or change allocation instructions
for future premiums by telephone if an authorization for telephone transfer
form has been completed, signed, and received at the Company's Syracuse
Operations Center. The telephone allocation and transfer privileges may also be
elected by completing the telephone authorization section on the policy
application. The Company may record all or part of any telephone conversation
with respect to transfer and allocation instructions. Telephone instructions
received by the Company by 4:00 p.m. Eastern time on any valuation date will be
effected as of the end of that valuation date in accordance with your
instructions, subject to the limitations stated in this prospectus (presuming
that the Right to Return Policy Period has expired). The Company reserves the
right to deny any telephone transfer or allocation request. If all telephone
lines are busy (which might occur, for example, during periods of substantial
market fluctuations), you might not be able to request transfers by telephone
and would have to submit written requests. Telephone transfer and allocation
instructions will only be accepted if complete and correct.
64
The Company has adopted guidelines (which it believes to be reasonable)
relating to telephone transfers and allocation instructions. These guidelines,
among other things, outline procedures to be followed which are designed to
prevent unauthorized instructions. If these procedures are followed, the
Company shall not be liable for, and you will therefore bear the entire risk
of, any loss as a result of the Company's following telephone instructions if
such instructions prove to be fraudulent. A copy of the guidelines and the
Company's form for electing telephone transfer privileges is available from
licensed agents of the Company who are also registered representatives of MSC
or by calling 1-800-487-6669. The Company's form or a policy application with
the telephone authorization completed must be signed and received at the
Company's Syracuse Operations Center before telephone transfers will be
accepted.
Legal Proceedings
There are no legal proceedings pending to which MONY Variable Account L is a
party, or which would materially affect MONY Variable Account L.
Legal Matters
Legal matters have been passed on by Arthur D. Woods, Vice
President-Variable Products and Broker-Dealer Operations Counsel of the MONY
Life Insurance Company in connection with:
(1) The issue and sale of the policies described in this prospectus,
(2) The organization of the Company,
(3) The Company's authority to issue the policies under New York law, and
(4) The validity of the forms of the policies under New York law.
Robert Levy, Vice President -- Chief Tax and Benefits Counsel of MONY Life
Insurance Company has passed upon legal matters relating to the federal income
tax laws.
Registration Statement
A Registration Statement under the Securities Act of 1933 has been filed
with the SEC relating to the offering described in this Prospectus. This
Prospectus does not include all of the information set forth in the
Registration Statement, as portions have been omitted pursuant to the rules and
regulations of the SEC. The omitted information may be obtained at the SEC's
principal office in Washington, D.C., upon payment of the SEC's prescribed fees.
Independent Accountants
The audited financial statements for the Company included in this Prospectus
and in the Registration Statement have been audited by PricewaterhouseCoopers
LLP, independent accountants, as indicated in their report herein. The audited
financial statements are included in reliance upon the authority of said firm
as experts in accounting and auditing. PricewaterhouseCoopers LLP's office is
located at 1177 Avenue of the Americas, New York, New York, 10036.
Financial Statements
The audited financial statements of the Company are set forth herein.
The financial statements of the Company have been audited by
PricewaterhouseCoopers LLP. The financial statements of the Company should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Policies.
65
FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Page
----
With respect to MONY Variable Account L:
No financial statements for MONY Variable Account L are included because although the MONY Variable Account L
commenced operations in 1990, the subaccounts available to policyholders had not commenced operations as of
December 31, 2001.
With respect to MONY Life Insurance Company:
Unaudited interim condensed consolidated balance sheets as of September 30, 2001 and December 31, 2000................ F-2
Unaudited interim condensed consolidated statements of income and comprehensive income for the three-month periods
ended September 30, 2001 and 2000................................................................................... F-3
Unaudited interim condensed consolidated statements of income and comprehensive income for the nine-month periods
ended September 30, 2001 and 2000................................................................................... F-4
Unaudited interim condensed consolidated statement of changes in shareholders' equity for the nine-month periods ended
September 30, 2001 and 2000......................................................................................... F-5
Unaudited interim condensed consolidated statements of cash flows for the nine-month periods ended September 30,
2001 and 2000....................................................................................................... F-6
Notes to unaudited interim condensed financial statements............................................................. F-7
Report of Independent Accountants..................................................................................... F-18
Consolidated balance sheets as of December 31, 2000 and 1999.......................................................... F-19
Consolidated statements of income and comprehensive income for the years ended December 31, 2000, 1999 and 1998....... F-20
Consolidated statements of changes in shareholders' equity for the years ended December 31, 2000, 1999 and 1998....... F-21
Consolidated statements of cash flows for the years ended December 31, 2000, 1999 and 1998............................ F-22
Notes to consolidated financial statements............................................................................ F-23
F-1
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2001 and December 31, 2000
September 30, December 31,
2001 2000
------------- ------------
($ in millions)
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value................ $ 6,787.5 $ 6,693.0
Equity securities available-for-sale, at fair value........................ 308.7 328.6
Mortgage loans on real estate.............................................. 1,814.5 1,754.7
Policy loans............................................................... 1,244.8 1,264.6
Real estate to be disposed of.............................................. 167.7 171.3
Real estate held for investment............................................ 56.1 40.7
Other invested assets...................................................... 142.1 100.0
--------- ---------
10,521.4 10,352.9
========= =========
Cash and cash equivalents................................................... 436.3 499.5
Accrued investment income................................................... 193.1 188.8
Amounts due from reinsurers................................................. 591.5 598.0
Premiums receivable......................................................... 12.6 13.6
Deferred policy acquisition costs........................................... 1,152.8 1,209.7
Other Assets................................................................ 552.6 544.0
Assets transferred in Group Pension Transaction (Note 5).................... 4,811.8 4,927.7
Separate account assets..................................................... 4,767.0 5,868.1
--------- ---------
Total assets............................................................. $23,039.1 $24,202.3
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits...................................................... $ 7,844.6 $ 7,794.5
Policyholders' account balances............................................. 2,265.2 2,191.3
Other policyholders' liabilities............................................ 302.7 295.9
Amounts due to reinsurers................................................... 74.6 85.6
Accounts payable and other liabilities...................................... 572.4 631.6
Short term debt............................................................. 52.3
Long term debt.............................................................. 216.9 217.0
Current federal income taxes payable........................................ 105.4 120.4
Deferred Federal Income Taxes............................................... 147.0 24.7
Liabilities transferred in Group Pension Transaction (Note 4)............... 4,742.3 4,897.2
Separate account liabilities................................................ 4,764.3 5,865.3
--------- ---------
Total liabilities........................................................ 21,035.4 22,175.8
========= =========
Commitments and contingencies (Note 5)
Common stock, $1.0 par value; 2.5 million shares authorized and outstanding 2.5 2.5
Capital in excess of par................................................... 1,628.6 1,628.6
Retained earnings.......................................................... 310.7 382.4
Accumulated other comprehensive income..................................... 61.9 13.0
--------- ---------
Total shareholders' equity............................................... 2,003.7 2,026.5
--------- ---------
Total liabilities and shareholders' equity............................... $23,039.1 $24,202.3
========= =========
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-2
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Three-month Periods Ended September 30, 2001 and 2000
2001 2000
------ ------
($ in millions)
Revenues:
Premiums................................................ $162.0 $162.5
Universal life and investment-type product policy fees.. 50.1 51.2
Net investment income................................... 169.6 225.5
Net realized gains on investments....................... 0.5 22.9
Group Pension Profits (Note 4).......................... 8.0 10.8
Other income............................................ 31.3 52.3
------ ------
421.5 525.2
------ ------
Benefits and Expenses:
Benefits to policyholders............................... 203.9 194.0
Interest credited to policyholders' account balances.... 27.9 28.9
Amortization of deferred policy acquisition costs....... 32.9 30.7
Dividends to policyholders.............................. 54.5 61.0
Other operating costs and expenses...................... 100.6 109.4
------ ------
419.8 424.0
------ ------
(Loss)/Income before income taxes and extraordinary item 1.7 101.2
Income tax benefit/(expense)............................ (2.3) (33.6)
------ ------
(Loss)/Income before extraordinary item................. (0.6) 67.6
Extraordinary loss, net of tax.......................... -- 1.0
------ ------
Net (loss)/income....................................... (0.6) 66.6
Other comprehensive income, net......................... 52.9 34.7
------ ------
Comprehensive income.................................... $ 52.3 $101.3
====== ======
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-3
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
For the Nine-month Periods Ended September 30, 2001 and 2000
2001 2000
-------- --------
($ in millions, except
share data and per
share amounts)
Revenues:
Premiums.............................................. $ 500.5 $ 504.0
Universal life and investment-type product policy fees 152.1 157.0
Net investment income................................. 534.7 808.3
Net realized gains on investments..................... 6.0 32.6
Group Pension Profits (Note 4)........................ 27.2 29.0
Other income.......................................... 125.7 174.0
-------- --------
1,346.2 1,704.9
-------- --------
Benefits and Expenses:
Benefits to policyholders............................. 596.1 577.1
Interest credited to policyholders' account balances.. 83.2 83.1
Amortization of deferred policy acquisition costs..... 98.4 105.4
Dividends to policyholders............................ 169.7 170.9
Other operating costs and expenses.................... 332.4 383.0
-------- --------
1,279.8 1,319.5
-------- --------
Income before income taxes and extraordinary item..... 66.4 385.4
Income tax expense.................................... 23.1 131.3
-------- --------
Income before extraordinary item...................... 43.3 254.1
Extraordinary loss, net of tax........................ -- (37.7)
-------- --------
Net income............................................ 43.3 216.4
Other comprehensive income, net....................... 48.9 8.9
-------- --------
Comprehensive income.................................. $ 92.2 $ 225.3
======== ========
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-4
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
Nine-month Period Ended September 30, 2001
Accumulated
Capital in Other Total
Common Excess of Retained Comprehensive Shareholders'
Stock Par Earnings Income Equity
------ ---------- -------- ------------- -------------
($ in millions)
Balance, December 31, 2000.... $2.5 $1,628.6 $ 382.4 $13.0 $2,026.5
Dividend Payable.............. (115.0) (115.0)
Comprehensive income:
Net income................... 43.3 43.3
Other comprehensive income(1) 48.9 48.9
--------
Comprehensive income.......... 92.2
---- -------- ------- ----- --------
Balance, September 30, 2001... $2.5 $1,628.6 $ 310.7 $61.9 $2,003.7
==== ======== ======= ===== ========
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-5
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine-month Periods Ended September 30, 2001 and 2000
2001 2000
-------- ---------
($ in millions)
Net cash (used in)/provided by operating activities................................. $ (38.6) $ (26.8)
Cash flows from investing activities:
Sales, maturities or repayment of:
Fixed maturities securities........................................................ 1,027.9 815.9
Equity securities.................................................................. 36.8 318.2
Mortgage loans on real estate...................................................... 201.1 418.5
Real estate........................................................................ 15.9 102.8
Policy loans, net.................................................................. 19.8 8.2
Other invested assets.............................................................. 3.3 1.6
Acquisitions of investments:
Fixed maturities securities........................................................ (877.4) (783.7)
Equity securities.................................................................. (25.0) (98.2)
Mortgage loans on real estate...................................................... (271.3) (329.3)
Real estate........................................................................ (63.7) (38.4)
Other invested assets.............................................................. (36.8) (37.9)
Other, net......................................................................... -- (150.0)
Property, plant and equipment, net................................................. (27.9) (28.9)
-------- ---------
Net cash provided by/(used in) investing activities................................. $ 2.7 $ 198.8
-------- ---------
Cash flows from financing activities:
Issuance of debt.................................................................... -- --
Repayments of debt.................................................................. (0.1) (284.3)
Receipts from annuity and universal life policies credited to policyholder's account
balances(1)....................................................................... 889.2 1,870.6
Return of policyholder account balances on annuity and universal life policies(1)... (775.6) (1,883.6)
Capital Contribution................................................................ (25.8) 65.0
Dividends Payable................................................................... (115.0) (75.0)
Long Term Borrowing................................................................. -- 215.0
-------- ---------
Net cash (used in) financing activities............................................. (27.3) (92.3)
-------- ---------
Net (decrease)/increase in cash and cash equivalents................................ (63.2) 79.7
Cash and cash equivalents, beginning of period...................................... 499.5 343.8
-------- ---------
Cash and cash equivalents, end of period............................................ $ 436.3 $ 423.5
======== =========
- ----------
(1)Includes exchanges to a new FPVA product series.
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-6
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Description of Business:
On November 16, 1998, pursuant to its Plan of Reorganization (the "Plan")
which was approved by the New York Superintendent of Insurance on the same day
(the "Plan Effective Date"), The Mutual Life Insurance Company of New York
("MONY") converted from a mutual life insurance company to a stock life
insurance company (the "Demutualization") and became a wholly owned subsidiary
of The MONY Group Inc. ("MONY Group"), a Delaware corporation organized on June
24, 1997. In connection with the Plan, MONY established a Closed Block ("Closed
Block") to fund the guaranteed benefits and dividends of certain participating
insurance policies, and eligible policyholders received cash, policy credits,
or shares of common stock of the MONY Group in exchange for their membership
interests in MONY. Also, on November 16, 1998, the MONY Group consummated an
initial public offering (the "Offering") of approximately 12.9 million shares
of its common stock and MONY changed its name to MONY Life Insurance Company.
The shares of common stock issued in the Offering are in addition to
approximately 34.3 million shares of common stock of the MONY Group distributed
to the aforementioned policyholders. As used in these financial statements, the
"Company" shall be a reference to MONY Life and its direct and indirect
subsidiaries; and the "Transaction" shall be a collective reference to the Plan
and Offerings.
The Company provides life insurance, annuities, mutual funds, brokerage,
asset management, business and estate planning, and trust services to
individual and institutional clients.
The Company distributes its products and services primarily through its
career agency sales force and various complementary distribution channels.
Complementary distribution includes: (i) sales of mutual funds by Enterprise
Capital Management, a Company subsidiary, through third-party broker dealers,
(ii) sales of Protection Products sold by U.S. Financial Life Insurance Company
("USFL"), also a Company subsidiary, through brokerage general agencies, (iii)
sales of corporate-owned life insurance ("COLI") products by the Company's
corporate marketing team and (iv) sales of a variety of financial products and
services through the Company's Trusted Securities Advisors Corp. subsidiary.
The Company primarily sells its products in all 50 of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
2. Summary of Significant Accounting Policies:
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States ("GAAP"). The preparation of financial
statements in conformity with GAAP requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. In the opinion of management these statements include all
normal recurring adjustments necessary to present fairly the financial
position, results of operations and cash flows of the Company for the periods
presented in conformity with GAAP. These statements should be read in
conjunction with the consolidated financial statements of the MONY Group for
the year ended December 31, 2000, which are presented in MONY Group's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 ("MONY Group's
2000 Annual Report"). The results of operations for the three-month and
nine-month period ended September 30, 2001 are not necessarily indicative of
the results to be expected for the full year. Certain reclassifications have
been made in the amounts presented for the comparative prior periods to conform
those periods to the current presentation.
New Accounting Pronouncements
On December 26, 2000 the American Institute of Certified Public Accountants
issued Statement of Position 00-3, Accounting by Insurance Enterprises for
Demutualizations and Formations of Mutual Insurance
F-7
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Holding Companies and For Certain Long-Duration Participating Contracts ("SOP
00-3"). SOP 00-3 provides guidance with respect to accounting for
Demutualizations and requires, among other things, that (i) Closed Block
assets, liabilities, revenues, and expenses should be displayed in financial
statements combined with all other assets, liabilities, revenues, and expenses
outside the Closed Block, and (ii) Demutualization expenses be classified as a
single line item within income from continuing operations. The guidance in SOP
00-3 requires restatement of financial statements presented for years prior to
its issuance and is effective for fiscal years beginning after December 15,
2000, except as it pertains to demutualization expenses which was effective
immediately upon its issuance. The financial statements herein reflect the
adoption of SOP 00-3. Accordingly, the consolidated statements of income and
comprehensive income and balance sheets presented herein for the three-month
and nine-month periods ended September 30, 2000 have been restated from those
previously reported in the prior year to conform the presentation thereof to
that required by SOP 00-3.
In the first quarter of 2001, the Company adopted SFAS 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 requires
all derivatives to be recognized in the statement of financial position as
either assets or liabilities and measured at fair value. The corresponding
derivative gains and losses should be reported based on the hedge relationship,
if any, that exists. Changes in the fair value of derivatives that are not
designated as hedges or that do not meet the hedge accounting criteria in SFAS
133, are required to be reported in earnings. SFAS 133, is effective for all
fiscal quarters of the fiscal years beginning after June 15, 2000. SFAS 133 did
not have a significant affect on the Company's financial position or results of
operations.
In September 2000, the FASB issued SFAS No. 140 Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, a replacement
of SFAS No. 125 ("SFAS 140"). SFAS No. 140 specifies the accounting and
reporting requirements for securitizations and other transfers of financial
assets and collateral, recognition and measurement of servicing assets and
liabilities and the extinguishment of liabilities. SFAS No. 140 is effective
for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001 and is to be applied prospectively
with certain exceptions. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000.
Adoption of the new requirements did not have a significant impact on the
Company's consolidated financial position or results of operations.
In July 2001, the FASB issued SFAS No. 141, Business Combinations ("SFAS
141"). SFAS 141 addresses the financial accounting and reporting for all
business combinations. This statement requires that all business combinations
be accounted for under the purchase method of accounting and abolishes the use
of the pooling-of-interest method, requires separate recognition of intangible
assets that can be identified and named, and expands required disclosures. All
of the Company's past business combinations have been accounted for under the
purchase accounting method. The provisions of this statement apply to all
business combinations initiated after June 30, 2001. This statement has no
effect on the financial position or results of operations of the Company.
In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets ("SFAS 142"). This statement addresses (i) how intangible assets that
are acquired individually or with a group of other assets (but not those
acquired in a business combination) should be accounted for in financial
statements upon their acquisition and (ii) how goodwill and other intangible
assets should be accounted for after they have been initially recognized in the
financial statements. Under SFAS 142, Company's will no longer amortize
goodwill on a straight-line basis over a predetermined period of time. SFAS 142
requires companies to evaluate recoverability of goodwill at least annually,
and more frequently if events and circumstances indicate that goodwill may not
be recoverable. FAS 142 requires amortization of identified intangibles with
finite useful lives over their expected useful lives. This statement is
effective for fiscal years beginning after December 15, 2001. The Company is in
the process of evaluating the effect of SFAS 142 on its financial position and
results of operations, but does not expect it to have an adverse material
effect.
F-8
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Segment Information:
For management and reporting purposes, the Company's business is organized
in two principal operating segments, the "Protection Products" segment and the
"Accumulation Products" segment. Substantially all of the Company's other
business activities are combined and reported in the "Other Products" segment.
Products comprising the Protection Products segment primarily include a wide
range of insurance products, including: whole life, term life, universal life,
variable universal life, corporate-owned life insurance, last survivor whole
life, last survivor universal life, last survivor variable universal life,
group universal life and special-risk products. In addition, included in the
protection products segment are: (i) the assets and liabilities transferred
pursuant to the Group Pension Transaction, as well as the Group Pension Profits
derived therefrom (see Note 4), (ii) the Closed Block assets and liabilities,
as well as all the related revenues and expenses relating thereto.
The Accumulation Products segment primarily includes flexible premium
variable annuities, single premium deferred annuities, single premium immediate
annuities, proprietary mutual funds, investment management services, and
certain other financial services products.
The Company's Other Products segments primarily consists of an insurance
brokerage operation, a securities broker-dealer and certain lines of insurance
business no longer written by the Company (the "run-off businesses"). The
insurance brokerage operation provides the Company's career agency sales force
with access to variable life, annuity, small group health and specialty
insurance products written by other carriers to meet the insurance and
investment needs of its customers. MSC is a securities broker dealer that
transacts customer trades primarily in securities and mutual funds. In addition
to selling the Company's Protection and Accumulation Products, MSC provides the
Company's career agency distribution system access to other non-proprietary
investment products (including stocks, bonds, limited partnership interests,
tax-exempt unit investment trusts and other investment securities). The run off
businesses primarily consist of group life and health business as well as group
pension business that was not included in the Group Pension Transaction (see
Note 4).
Amounts reported as "reconciling amounts" in the table below primarily
relate to: (i) contracts issued by the Company relating to its employee benefit
plans and, (ii) assets, liabilities, revenues and expenses of the MONY Group.
Set forth in the following table is certain financial information with
respect to the Company's operating segments as well as amounts not allocated to
the segments as of September 30, 2001 and December 31, 2000 and for each of the
three-month and nine-month periods ended September 30, 2001 and 2000.
F-9
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Segment Summary Financial Information
For the For the
Three-month Nine-month
Periods Ended Periods Ended
September 30, September 30,
-------------- --------------
2001 2000 2001 2000
------ ------ ------ ------
($ in millions)
Premiums:
Protection Products.................................................. $159.1 $160.3 $490.5 $497.2
Accumulation Products................................................ 1.0 -- 3.4 0.4
Other Products....................................................... 1.9 2.2 6.6 6.4
------ ------ ------ ------
$162.0 $162.5 $500.5 $504.0
====== ====== ====== ======
Universal life and investment-type product policy fees:
Protection Products.................................................. $ 38.4 $ 33.8 $110.0 $102.3
Accumulation Products................................................ 12.5 17.3 42.0 53.8
Other Products....................................................... (0.8) 0.1 0.1 0.9
------ ------ ------ ------
$ 50.1 $ 51.2 $152.1 $157.0
====== ====== ====== ======
Net investment income and net realized gains (losses) on investments:
Protection Products.................................................. $139.4 $197.9 $442.9 $657.6
Accumulation Products................................................ 18.7 30.4 59.2 106.6
Other Products....................................................... 4.0 17.7 17.3 63.9
Reconciling amounts.................................................. 8.0 6.9 21.3 12.8
------ ------ ------ ------
$170.1 $252.9 $540.7 $840.9
====== ====== ====== ======
Other income(1):
Protection Products.................................................. $ 2.3 $ 15.6 $ 27.9 $ 46.7
Accumulation Products................................................ 23.5 29.8 76.7 92.5
Other Products....................................................... 12.9 16.2 43.9 60.3
Reconciling amounts.................................................. 0.6 1.5 4.4 3.5
------ ------ ------ ------
$ 39.3 $ 63.1 $152.9 $203.0
====== ====== ====== ======
Amortization of deferred policy acquisition costs:
Protection Products.................................................. $ 25.7 $ 23.9 $ 80.9 $ 84.0
Accumulation Products................................................ 7.2 6.8 17.5 21.4
------ ------ ------ ------
$ 32.9 $ 30.7 $ 98.4 $105.4
====== ====== ====== ======
Benefits to policyholders(2):
Protection Products.................................................. $206.8 $196.8 $604.2 $581.6
Accumulation Products................................................ 17.7 16.4 50.1 53.4
Other Products....................................................... 5.7 7.8 18.6 19.5
Reconciling amounts.................................................. 1.6 1.9 6.4 5.7
------ ------ ------ ------
$231.8 $222.9 $679.3 $660.2
====== ====== ====== ======
(Loss)/Income before income taxes:
Protection Products.................................................. $ 8.6 $ 68.1 $ 56.0 $262.2
Accumulation Products................................................ 0.7 27.7 25.6 90.2
Other Products....................................................... (8.5) 3.5 (15.1) 32.9
Reconciling amounts.................................................. 0.9 1.9 (0.1) 0.1
------ ------ ------ ------
$ 1.7 $101.2 $ 66.4 $385.4
====== ====== ====== ======
F-10
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
As of As of
September 30, December 31,
2001 2000
------------- ------------
($ in millions)
Assets:(3)
Protection Products(4)............ $16,316.9 $16,239.1
Accumulation Products............. 4,716.1 5,593.5
Other Products.................... 961.6 1,060.7
Reconciling amounts............... 1,044.5 1,309.0
--------- ---------
$23,039.1 $24,202.3
========= =========
Deferred policy acquisition costs:
Protection Products............... $ 1,013.7 $ 1,064.3
Accumulation Products............. 139.1 145.4
--------- ---------
$ 1,152.8 $ 1,209.7
========= =========
Policyholders liabilities:
Protection Products(5)............ $10,368.4 $10,290.7
Accumulation Products............. 1,075.3 1,060.0
Other Products.................... 370.4 381.4
Reconciling amounts............... 17.4 17.7
--------- ---------
$11,831.5 $11,749.8
========= =========
Separate account liabilities:(3)
Protection Products(6)............ $ 3,809.5 $ 3,939.5
Accumulation Products............. 3,161.2 4,072.9
Other Products.................... 429.9 499.5
Reconciling amounts............... 661.0 770.1
--------- ---------
$ 8,061.6 $ 9,282.0
========= =========
- ----------
(1)Includes Group Pension Profits revenues and other income.
(2)Includes benefits to policyholders and interest credited to policyholders'
account balances.
(3)Each segment includes separate account assets in an amount equal to the
corresponding liability reported.
(4)Includes assets transferred in the Group Pension Transaction of $4,811.8
million and $4,927.7 million as of September 30, 2001 and December 31, 2000,
respectively (see Note 4).
(5)Includes policyholder liabilities transferred in the Group Pension
Transaction of $1,418.9 million and $1,468.1 million as of September 30,
2001 and December 31, 2000, respectively (see Note 4).
(6)Includes separate account liabilities transferred in the Group Pension
Transaction of $3,297.2 million and $3,416.7 million as of September 30,
2001 and December 31, 2000 respectively (see Note 4).
F-11
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The following is a summary of premiums and universal life and
investment-type product policy fees by product for the three and nine-month
periods ended September 30, 2001 and 2000, respectively.
Three-month Nine-month
Period Ended Period Ended
September 30, September 30,
-------------- -------------
2001 2000 2001 2000
------ ------ ------ ------
($ in millions)
Premiums:
Individual life........................................ $159.0 $160.2 $490.2 $496.8
Group insurance........................................ 1.9 2.2 6.6 6.4
Disability income insurance............................ 0.1 0.1 0.3 0.4
Other.................................................. 1.0 0.0 3.4 0.4
------ ------ ------ ------
Total............................................... $162.0 $162.5 $500.5 $504.0
====== ====== ====== ======
Universal life and investment-type product policy fees:
Universal life......................................... $ 18.1 $ 16.9 $ 53.8 $ 50.8
Variable universal life................................ 17.9 14.3 49.1 43.2
Group universal life................................... 2.4 2.6 7.1 8.3
Individual variable annuities.......................... 12.5 17.3 42.0 53.8
Individual fixed annuities............................. (0.8) 0.1 0.1 0.9
------ ------ ------ ------
Total............................................... $ 50.1 $ 51.2 $152.1 $157.0
====== ====== ====== ======
4. The Group Pension Transaction:
The following sets forth certain summarized financial information relating
to the Group Pension Transaction (as defined in the notes to the audited
consolidated financial statements included in MONY Group's 2000 Annual Report)
as of and for the periods indicated, including information regarding: (i) the
general account assets transferred to support the existing deposits in the
Group Pension Transaction (such assets hereafter referred to as the "AEGON
Portfolio"), (ii) the transferred separate account assets and liabilities, and
(iii) the components of revenue and expense comprising the Group Pension
Profits (as defined in the notes to the audited consolidated financial
statements included in MONY Group's 2000 Annual Report):
As of As of
September 30, December 31,
2001 2000
------------- ------------
($ in millions)
Assets:
General Account
Fixed Maturities: available for sale, at estimated fair value (amortized cost; $1,375.4
million and $1,420.8 million, respectively).......................................... $1,413.9 $1,419.0
Mortgage loans on real estate.......................................................... 28.7 47.5
Cash and cash equivalents.............................................................. 49.9 18.5
Accrued investment income.............................................................. 22.1 26.0
-------- --------
Total general account assets........................................................... 1,514.6 1,511.0
Separate account assets................................................................ 3,297.2 3,416.7
-------- --------
Total assets........................................................................ $4,811.8 $4,927.7
======== ========
Liabilities:
General Account(1)
Policyholders' account balances........................................................ $1,418.9 $1,468.1
Other liabilities...................................................................... 26.2 12.4
-------- --------
Total general account liabilities...................................................... $1,445.1 $1,480.5
Separate account liabilities(2)........................................................ $3,297.2 $3,416.7
-------- --------
Total Liabilities................................................................... $4,742.3 $4,897.2
======== ========
F-12
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
- ----------
(1)Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $72.2 million
and $74.2 million as of September 30, 2001 and December 31, 2000,
respectively.
(2)Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $11.4 million
and $14.7 million as of September 30, 2001 and December 31, 2000,
respectively.
For the For the
Three-month Nine-month
Periods Ended Periods Ended
September 30, September 30,
------------- -------------
2001 2000 2001 2000
----- ----- ----- ------
($ in millions)
Revenues:
Product policy fees................................ $ 4.8 $ 7.4 $14.3 $ 19.4
Net investment income.............................. 25.0 27.8 78.0 86.2
Net realized gains (losses) on investments......... 1.3 1.0 4.9 1.6
----- ----- ----- ------
Total Revenues.................................. 31.1 36.2 97.2 107.2
Benefits and Expenses:
Interest Credited to policyholders account balances 19.1 21.7 56.2 64.9
Other operating costs and expenses................. 4.0 3.7 13.8 13.3
----- ----- ----- ------
Total benefits and expenses..................... 23.1 25.4 70.0 78.2
----- ----- ----- ------
Group Pension Profits........................... $ 8.0 $10.8 $27.2 $ 29.0
===== ===== ===== ======
5. Commitments and Contingencies:
Since late 1995 a number of purported class actions have been commenced in
various state and federal courts against the Company alleging that it engaged
in deceptive sales practices in connection with the sale of whole and universal
life insurance policies from the early 1980s through the mid 1990s. Although
the claims asserted in each case are not identical, they seek substantially the
same relief under essentially the same theories of recovery (i.e., breach of
contract, fraud, negligent misrepresentation, negligent supervision and
training, breach of fiduciary duty, unjust enrichment and violation of state
insurance and/or deceptive business practice laws). Plaintiffs in these cases
seek primarily equitable relief (e.g., reformation, specific performance,
mandatory injunctive relief prohibiting the Company from canceling policies for
failure to make required premium payments, imposition of a constructive trust
and creation of a claims resolution facility to adjudicate any individual
issues remaining after resolution of all class-wide issues) as opposed to
compensatory damages, although they also seek compensatory damages in
unspecified amounts. The Company has answered the complaints in each action
(except for one being voluntarily held in abeyance). The Company has denied any
wrongdoing and has asserted numerous affirmative defenses.
On June 7, 1996, the New York State Supreme Court certified one of those
cases, Goshen v. The Mutual Life Insurance Company of New York and MONY Life
Insurance Company of America (now known as DeFilippo, et al v. The Mutual Life
Insurance Company of New York and MONY Life Insurance Company of America), the
first of the class actions filed, as a nationwide class consisting of all
persons or entities who have, or at the time of the policy's termination had,
an ownership interest in a whole or universal life insurance policy issued by
MONY and sold on an alleged "vanishing premium" basis during the period January
1, 1982 to December 31, 1995. On March 27, 1997, MONY filed a motion to dismiss
or, alternatively, for summary judgment on all counts of the complaint. All of
the other putative class actions have been consolidated and transferred by the
Judicial Panel on Multidistrict Litigation to the United States District Court
for the District of Massachusetts and/or are being held in abeyance pending the
outcome of the Goshen case.
F-13
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
On October 21, 1997, the New York State Supreme Court granted MONY's motion
for summary judgment and dismissed all claims filed in the Goshen case against
MONY. On December 20, 1999, the New York State Court of Appeals affirmed the
dismissal of all but one of the claims in the Goshen case (a claim under New
York's General Business Law), which has been remanded back to the New York
State Supreme Court for further proceedings consistent with the opinion. The
New York State Supreme Court has subsequently reaffirmed that, for purposes of
the remaining New York General Business Law claim, the class is now limited to
New York purchasers only, and has further held that the New York General
Business Law claims of all class members whose claims accrued prior to November
29, 1992 are barred by the applicable statute of limitations. MONY intends to
defend itself vigorously against the sole remaining claim. There can be no
assurance, however, that the present litigation relating to sales practices
will not have a material adverse effect on MONY.
On November 16, 1999, The MONY Group Inc. and MONY Life Insurance Company
were served with a complaint in an action entitled Calvin Chatlos, M.D., and
Alvin H. Clement, On Behalf of Themselves And All Others Similarly Situated v.
The MONY Life Insurance Company, The MONY Group Inc., and Neil D. Levin,
Superintendent, New York Department of Insurance, filed in the United States
District Court for the Southern District of New York. The action purports to be
brought as a class action on behalf of all individuals who had an ownership
interest in one or more in-force life insurance policies issued by MONY Life
Insurance Company as of November 16, 1998. The complaint alleges that (i) the
New York Superintendent of Insurance, Neil D. Levin, violated Section 7312 of
the New York Insurance Law by approving the plan of demutualization, which
plaintiffs claim was not fair and adequate, primarily because it allegedly
failed to provide for sufficient assets for the mechanism established under the
plan to preserve reasonable dividend expectations of the Closed Block, and (ii)
MONY violated Section 7312 by failing to develop and submit to the
Superintendent a plan of demutualization that was fair and adequate. The
plaintiffs seek equitable relief in the form of an order vacating and/or
modifying the Superintendent's order approving the plan of demutualization
and/or directing the Superintendent to order MONY to increase the assets in the
Closed Block, as well as unspecified monetary damages, attorneys' fees and
other relief.
In early January 2000, MONY and the New York Superintendent wrote to the
District Court seeking a pre-motion conference preliminary to the filing of a
motion to dismiss the federal complaint on jurisdictional, federal abstention
and timeliness grounds and for failure to state a claim. Following receipt of
those letters, plaintiffs' counsel offered voluntarily to dismiss their
complaint, and a stipulation and order to that effect was thereafter filed and
approved by the court.
On March 27, 2000, plaintiffs filed a new action in New York State Supreme
Court bearing the same caption and naming the same defendants as the previously
filed federal action. The state court complaint differs from the complaint
previously filed in federal court in two primary respects. First, it no longer
asserts a claim for damages against the Superintendent, nor does its prayer for
relief seek entry of an order vacating or modifying the Superintendent's
decision or requiring the Superintendent to direct MONY to place additional
assets into the Closed Block. Rather, it seeks an accounting and an order from
the Court directing MONY to transfer additional assets to the Closed Block.
Second, the new complaint contains claims for breach of contract and
fiduciary duty, as well as new allegations regarding the adequacy of the
disclosures contained in the Policyholder Information Booklet distributed to
policyholders soliciting their approval of the plan of demutualization (which
plaintiffs claim violated both the Insurance Law and MONY's fiduciary duties).
In order to challenge successfully the New York Superintendent's approval of
the plan, plaintiffs would have to sustain the burden of showing that such
approval was arbitrary and capricious or an abuse of discretion, made in
violation of lawful procedures, affected by an error of law or not supported by
substantial evidence. In
F-14
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
addition, Section 7312 provides that MONY may ask the court to require the
challenging party to give security for the reasonable expenses, including
attorneys' fees, which may be incurred by MONY or the Superintendent or for
which MONY may become liable, to which security MONY shall have recourse in
such amount as the court shall determine upon the termination of the action.
MONY and the Superintendent moved to dismiss the state court complaint in
its entirety on a variety of grounds. On April 20, 2001, the New York Supreme
Court granted both motions and dismissed all claims against MONY and the
Superintendent. On June 29, 2001 plaintiffs filed a Notice of Appeal with the
New York Appellate Division, appealing the dismissal of the claims against MONY
and the Superintendent. MONY intends to defend itself vigorously against
plaintiffs' appeal. There can be no assurance, however, that the present
litigation will not have a material adverse effect on MONY.
In addition to the matters discussed above, the Company is involved in
various other legal actions and proceedings (some of which involve demands for
unspecified damages) in connection with its business. In the opinion of
management of the Company, resolution of contingent liabilities, income taxes
and other matters will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
At September 30, 2001, the Company had commitments to contribute capital to
its equity partnership investments of $119.4 million and commitments to
purchase $76.7 million of private fixed and floating rate maturity securities
with interest rates ranging from 4.53% to 8.16%.
At September 30, 2001, the Company had commitments to issue $6.1 million of
fixed rate agricultural loans with periodic interest rate reset dates. The
initial interest rates on such loans range from approximately 6.25% to 7.50%.
In addition, the Company had commitments to issue $137.5 million of fixed rate
and floating rate commercial mortgage loans with interest rates ranging from
5.39% to 8.65%.
At September 30, 2001, the Company had commitments to issue $14.2 million of
mezzanine financing with pay rates ranging from 8.26% to 10.00%.
In addition, MONY Group maintains a syndicated credit facility with domestic
banks aggregating $150.0 million, with a scheduled renewal date in June 2002.
In accordance with certain covenants of the facilities, MONY Group is required
to maintain a certain statutory tangible net worth and debt to capitalization
ratio. The purpose of this facility is to provide additional liquidity for any
unanticipated short-term cash needs MONY Group might experience and also to
serve as support for MONY Group's $150.0 million commercial paper program which
was activated in the third quarter of 2000. MONY Group has complied with all
covenants of the facilities, has not borrowed against these lines of credit
since their inception, and does not have any commercial paper outstanding as of
September 30, 2001.
F-15
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6. Closed Block:
The following tables set forth certain summarized financial information
relating to the Closed Block, as of and for the periods indicated:
September 30, December 31,
2001 2000
------------- ------------
($ in millions)
Assets:
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost; $3,625.9 and $3,535.8
respectively)................................................................... $3,770.5 $3,543.1
Mortgage loans on real restate.................................................... 596.1 566.0
Policy loans...................................................................... 1,162.3 1,183.9
Cash and cash equivalents......................................................... 171.3 167.8
Premiums receivable............................................................... 10.1 13.6
Deferred policy acquisition costs................................................. 433.9 552.6
Other assets...................................................................... 233.5 224.2
-------- --------
Total Closed Block assets....................................................... $6,377.7 $6,251.2
======== ========
Liabilities:
Future policy benefits............................................................ $6,853.0 $6,826.8
Policyholders' account balances................................................... 291.9 293.3
Other Policyholders' liabilities.................................................. 182.9 173.5
Other liabilities................................................................. 103.0 22.2
-------- --------
Total Closed Block liabilities.................................................. $7,430.8 $7,315.8
======== ========
For the For the
Three-month Nine-month
Period Ended Periods Ended
September 30, September 30,
------------- -------------
2001 2000 2001 2000
------ ------ ------ ------
($ in millions)
Revenues:
Premiums............................................ $129.8 $136.0 $397.3 $419.6
Net investment income............................... 100.0 99.2 299.0 294.2
Net realized gains (losses) on investments.......... 2.7 2.6 4.7 (4.3)
Other income........................................ 0.5 0.6 1.5 1.7
------ ------ ------ ------
Total revenues................................... 233.0 238.4 702.5 711.2
====== ====== ====== ======
Benefits and Expenses:
Benefits to policyholders........................... $151.7 $148.0 $445.1 $450.2
Interest credited to policyholders' account balances 2.3 2.2 6.5 6.5
Amortization of deferred policy acquisition cost.... 13.9 14.7 46.1 46.6
Dividends to policyholders.......................... 53.9 60.4 167.3 169.1
Other operating costs and expenses.................. 1.6 2.4 5.7 6.7
------ ------ ------ ------
Total benefits and expenses...................... 223.4 227.7 670.7 679.1
------ ------ ------ ------
Contribution from the Closed Block................. $ 9.6 $ 10.7 $ 31.8 $ 32.1
====== ====== ====== ======
F-16
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
For the three-month periods ended September 30, 2001 and 2000, there were
$0.0 million and $5.6 million in charges for other than temporary impairments
on fixed maturities in the Closed Block. For the nine-month period ended
September 30, 2001 and 2000, there were $4.7 million and $10.1 million,
respectively, in charges for other than temporary impairments on fixed maturity
securities in the Closed Block.
7. Extraordinary Item and Other Items:
On March 8, 2000, the MONY Group issued $300.0 million principal amount of
senior notes (the "Senior Notes"). The Senior Notes mature on March 15, 2010
and bear interest at 8.35% per annum. The principal amount of the Senior Notes
is payable at maturity and interest is payable semi-annually. The net proceeds
to the MONY Group from the issuance of the Senior Notes, after deducting
underwriting commissions and other expenses (primarily legal and accounting
fees), were approximately $296.6 million. Approximately $280.0 million of the
net proceeds from the issuance of the Senior Notes was used by the MONY Group
to finance the repurchase, on March 8, 2000, by MONY Life of all of its
outstanding $115.0 million face amount 9.5% coupon surplus notes, and $116.5
million face amount of its $125.0 million face amount 11.25% coupon surplus
notes (hereafter referred to as the "9.5% Notes" and "11.25% Notes",
respectively), which were outstanding at December 31, 1999. The balance of the
net proceeds from the issuance of the Senior Notes will be used by the MONY
Group for general corporate purposes.
As a result of the repurchase of the 9.5% Notes and substantially all of the
11.25% Notes, the Company recorded a before tax loss of $56.5 million ($36.7
million after tax) during the first quarter of 2000 and $1.6 million ($1.0
million after tax) during the third quarter of 2000. The loss resulted from the
premium paid by MONY Life to the holders of the 9.5% Notes and the 11.25% Notes
reflecting the excess of their fair value over their carrying value on the
Company's books at the date of the transaction of approximately $7.0 million
and $51.1 million, respectively. This loss is reported, net of tax, as an
extraordinary item on the Company's income statement for the nine-month period
ended September 30, 2000.
F-17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
MONY Life Insurance Company.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and comprehensive income, changes in
shareholders' equity and cash flows present fairly, in all material respects,
the financial position of The MONY Life Insurance Company and Subsidiaries (the
"Company"), formerly known as The Mutual Life Insurance Company of New York and
subsidiaries, at December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 8, 2001
F-18
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
2000 1999
--------- ---------
($ in millions)
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value (Note 12).................... $ 3,149.9 $ 3,066.7
Equity securities available-for-sale, at fair value (Note 12)............................ 328.6 519.8
Mortgage loans on real estate (Note 13).................................................. 1,188.7 1,270.4
Policy loans............................................................................. 80.7 69.1
Real estate to be disposed of (Note 13).................................................. 171.3 300.9
Real estate held for investment (Note 13)................................................ 40.7 46.2
Other invested assets.................................................................... 99.3 37.9
--------- ---------
$ 5,059.2 $ 5,311.0
========= =========
Cash and cash equivalents................................................................. 331.7 232.6
Accrued investment income................................................................. 71.7 74.6
Amounts due from reinsurers............................................................... 491.6 488.0
Deferred policy acquisition costs......................................................... 657.1 558.3
Other assets.............................................................................. 544.0 365.4
Assets transferred in Group Pension Transaction (Note 10)................................. 4,927.7 5,109.8
Separate account assets................................................................... 5,868.1 6,398.3
Closed Block assets (Note 20)............................................................. 6,251.2 6,182.1
--------- ---------
Total assets........................................................................... $24,202.3 $24,720.1
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits.................................................................... $ 967.7 $ 954.3
Policyholders' account balances........................................................... 1,898.0 1,942.9
Other policyholders' liabilities.......................................................... 122.4 120.4
Amounts due to reinsurers................................................................. 87.3 83.8
Accounts payable and other liabilities.................................................... 628.1 581.1
Short term debt (Note 16)................................................................. 52.3 53.4
Long term debt (Note 16).................................................................. 217.0 245.4
Current federal income taxes payable...................................................... 124.7 147.4
Liabilities transferred in Group Pension Transaction (Note 10)............................ 4,897.2 5,099.1
Separate account liabilities.............................................................. 5,865.3 6,396.2
Closed Block liabilities (Note 20)........................................................ 7,315.8 7,303.3
--------- ---------
Total liabilities...................................................................... $22,175.8 $22,927.3
========= =========
Commitments and contingencies (Notes 9 and 18)
Common stock, $0.01 par value; 400 million shares authorized; 47.2 million shares issued,
46.2 million shares outstanding........................................................ $ 2.5 $ 2.5
Capital in excess of par................................................................. 1,628.6 1,563.6
Retained earnings........................................................................ 382.4 256.1
Accumulated other comprehensive income................................................... 13.0 (29.4)
--------- ---------
Total shareholders' equity............................................................. 2,026.5 1,792.8
--------- ---------
Total liabilities and shareholders' equity............................................. $24,202.3 $24,720.1
========= =========
See accompanying notes to consolidated financial statements.
F-19
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31, 2000, 1999, and 1998
1998
Pro Forma*
2000 1999 1998 (Unaudited)
-------- -------- -------- -----------
($ in millions)
Revenues:
Premiums.............................................. $ 118.1 $ 96.3 $ 621.7 $ 77.9
Universal life and investment-type product policy fees 205.8 196.3 151.6 151.6
Net investment income (Note 11)....................... 575.2 524.9 688.3 361.1
Net realized gains on investments (Note 11)........... 44.5 122.2 168.7 160.9
Group Pension Profits (Note 10)....................... 37.1 63.0 56.8 56.8
Other income.......................................... 221.1 195.8 162.6 161.3
Contribution from the Closed Block.................... 42.8 44.8 5.7 52.2
-------- -------- -------- --------
1,244.6 1,243.3 1,855.4 1,021.8
-------- -------- -------- --------
Benefits and expenses:
Benefits to policyholders............................. 166.9 147.0 679.8 124.4
Interest credited to policyholders' account balances.. 101.8 106.6 112.7 105.0
Amortization of deferred policy acquisition costs..... 78.7 70.3 122.0 52.2
Dividends to policyholders............................ 2.6 1.9 195.8 3.3
Other operating costs and expenses.................... 495.8 536.6 451.7 443.5
Demutualization Expenses.............................. -- 2.0 27.2 --
-------- -------- -------- --------
845.8 864.4 1,589.2 728.4
-------- -------- -------- --------
Income before income taxes & extraordinary item....... 398.8 378.9 266.2 293.4
-------- -------- -------- --------
Income tax expense.................................... 134.8 131.4 102.7 102.7
-------- -------- -------- --------
Income before extraordinary item...................... 264.0 247.5 163.5 190.7
-------- -------- -------- --------
Extraordinary item (Note 4)........................... 37.7 -- -- --
-------- -------- -------- --------
Net income............................................ 226.3 247.5 163.5 190.7
-------- -------- -------- --------
Other comprehensive income, net (Note 11)............. 42.4 (181.8) 34.3
-------- -------- --------
Comprehensive income.................................. $ 268.7 $ 65.7 $ 197.8
======== ======== ========
- ----------
* The pro forma information gives effect to the transactions referred to in
Notes 1 and 22.
See accompanying notes to consolidated financial statements.
F-20
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years Ended December 31, 2000, 1999, and 1998
Accumulated
Capital Other Total
Common In Excess Retained Comprehensive Shareholders'
Stock of Par Earnings Income Equity
------ --------- --------- ------------- -------------
($ in millions)
Balance, December 31, 1997.................................... 1,202.5 118.1 1,320.6
Demutualization transaction................................... 1,344.2 (1,357.4) (13.2)
Capital Contribution.......................................... 2.0 219.9 221.9
Comprehensive income:
Net income before demutualization............................ 154.9 154.9
Net income after demutualization............................. 8.6 8.6
---- -------- --------- ------- --------
Net income for the year...................................... 163.5 163.5
Other comprehensive income:
Unrealized losses on investments, net of unrealized gains,
reclassification adjustments, and taxes (Note 11)........ 31.4 31.4
Minimum pension liability adjustment....................... 2.9 2.9
------- --------
Other comprehensive income................................... 34.3 34.3
--------
Comprehensive Income.......................................... 197.8
---- -------- --------- ------- --------
Balance, December 31, 1998.................................... 2.0 1,564.1 8.6 152.4 1,727.1
Comprehensive income:
Net income................................................... 247.5 247.5
Other comprehensive income:
Unrealized gains on investments, net of unrealized losses,
reclassification adjustments, and taxes (Note 11)........ (181.8) (181.8)
Change in number of authorized and
outstanding shares.......................................... 0.5 (0.5)
Comprehensive income/(loss)................................... 65.7
---- -------- --------- ------- --------
Balance, December 31, 1999.................................... 2.5 1,563.6 256.1 (29.4) 1,792.8
Dividends Payable............................................. (100.0) (100.0)
Capital Contribution.......................................... 65.0 65.0
Comprehensive income:
Net income................................................... 226.3 226.3
Other comprehensive income:
Unrealized losses on investment, net of unrealized gains,
reclassifications and adjustments, and taxes (Note 11)... 46.2 46.2
Minimum pension liability adjustment.......................... (3.8) (3.8)
---- -------- --------- ------- --------
Other Comprehensive Income.................................... 42.4 42.4
--------
Comprehensive income.......................................... 268.7
---- -------- --------- ------- --------
Balance, December 31, 2000.................................... $2.5 $1,628.6 $ 382.4 $ 13.0 $2,026.5
==== ======== ========= ======= ========
See accompanying notes to consolidated financial statements.
F-21
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2000, 1999, and 1998
2000 1999 1998
--------- --------- ---------
($ in millions)
Cash flows from operating activities (see Note 4):
Net income................................................................................... $ 226.4 $ 247.5 $ 163.5
Adjustments to reconcile net income to net cash provided by operating activities:
Interest credited to policyholders' account balances........................................ 93.1 105.0 110.6
Universal life and investment-type product policy fee income................................ (127.4) (143.5) (123.6)
Capitalization of deferred policy acquisition costs......................................... (175.0) (148.8) (124.5)
Amortization of deferred policy acquisition costs........................................... 78.7 70.3 122.0
Provision for depreciation and amortization................................................. 33.2 31.5 41.4
Provision for deferred federal income taxes................................................. 63.4 57.4 11.4
Net realized gains on investments........................................................... (44.4) (122.2) (168.7)
Non-cash distributions from investments..................................................... (226.7) (172.8) (35.1)
Change in other assets and accounts payable and other liabilities........................... (45.4) (26.4) (32.7)
Change in future policy benefits............................................................ 13.3 (3.7) 136.2
Change in other policyholders' liabilities.................................................. 2.0 15.6 32.9
Change in current federal income taxes payable.............................................. 2.3 103.8 (14.9)
Initial cash transferred to the Closed Block................................................ -- -- (46.9)
Extraordinary loss on extinguishment of debt................................................ 56.8
Contribution from the Closed Block.......................................................... (42.8) (44.8) (5.7)
--------- --------- ---------
Net cash (used in)/provided by operating activities.......................................... $ (92.5) $ (31.4) $ 65.9
--------- --------- ---------
Cash flows from investing activities:
Sales, maturities or repayments of:
Fixed maturities............................................................................ $ 603.0 $ 689.4 $ 887.3
Equity securities........................................................................... 514.2 328.1 177.4
Mortgage loans on real estate............................................................... 377.7 132.9 424.4
Real estate................................................................................. 149.0 350.7 578.3
Other invested assets....................................................................... 1.6 18.7 46.0
Acquisitions of investments:
Fixed maturities............................................................................ (629.3) (830.0) (1,479.7)
Equity securities........................................................................... (127.6) (152.0) (230.5)
Mortgage loans on real estate............................................................... (251.6) (412.0) (422.4)
Real estate................................................................................. (43.0) (44.5) (39.5)
Other invested assets....................................................................... (53.8) (20.6) (2.1)
Policy loans, net........................................................................... (11.7) (7.8) (17.8)
Other, net.................................................................................. (150.0) 60.3 8.8
Property & equipment, net................................................................... (54.8) (22.5) (30.9)
Acquisition of subsidiaries, net of cash acquired........................................... -- -- (46.0)
--------- --------- ---------
Net cash provided by/(used in) investing activities.......................................... $ 323.7 $ 90.7 $ (146.7)
========= ========= =========
Cash flows from financing activities:
Issuance of debt............................................................................. $ 215.0 $ -- $ --
Repayments of debt........................................................................... (301.3) (84.8) (61.3)
Receipts from annuity and universal life policies credited to policyholders' account balances 2,265.1 1,851.5 1,254.0
Return of policyholders' account balances on annuity policies and universal life policies.... (2,275.9) (1,863.6) (1,377.0)
Capital Contribution......................................................................... 65.0 -- 22.19
Dividends paid to shareholders............................................................... (100.0) -- --
Net cash provided/(used in) by financing activities.......................................... (132.1) (96.9) 37.6
--------- --------- ---------
Net increase/(decrease) in cash and cash equivalents......................................... 99.1 (37.6) (43.2)
Cash and cash equivalents, beginning of year................................................. 232.6 270.2 313.4
--------- --------- ---------
Cash and cash equivalents, end of year....................................................... $ 331.7 $ 232.6 $ 270.2
========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes................................................................................. $ 93.3 $ 20.1 $ 97.4
Interest..................................................................................... $ 25.6 $ 20.3 $ 20.3
See accompanying notes to consolidated financial statements.
F-22
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Description of Business:
On November 16, 1998, pursuant to its Plan of Reorganization (the "Plan")
which was approved by the New York Superintendent of Insurance on the same day
(the "Plan Effective Date"), The Mutual Life Insurance Company of New York
("MONY") converted from a mutual life insurance company to a stock life
insurance company (the "Demutualization") and became a wholly owned subsidiary
of The MONY Group Inc., (the "MONY Group" or the "Holding Company"), a Delaware
corporation organized on June 24, 1997 for the purpose of becoming the parent
holding company of MONY. In connection with the Plan, MONY established a closed
block, as more fully discussed in Note 3, to fund the guaranteed benefits and
dividends of certain participating insurance policies and eligible
policyholders received cash, policy credits, or shares of common stock of the
MONY Group in exchange for their membership interests in MONY (see Note 4).
Also, on November 16, 1998, the MONY Group consummated an initial public
offering (the "Offerings") of approximately 12.9 million shares of its common
stock (see Note 4) and MONY changed its name to MONY Life Insurance Company
(MONY Life Insurance Company and its subsidiaries are hereafter collectively
referred to as "MONY Life"). The shares of common stock issued in the Offerings
are in addition to approximately 34.3 million shares of common stock of the
MONY Group distributed to the aforementioned eligible policyholders. The Plan
and the Offerings are hereafter collectively referred to as the "Transaction."
See Note 4. During 1999, the Company increased its number of shares authorized
and outstanding from 2.0 million to 2.5 million in order to comply with
statutory requirement.
MONY Life and its subsidiaries (hereafter collectively referred to as the
"Company"), is primarily engaged in the business of providing a wide range of
life insurance, annuity, and investment products to higher income individuals,
particularly family builders, pre-retirees, and small business owners (see Note
5). The Company distributes its products primarily through its career agency
sales force and various complementary distribution channels. These include
sales of mutual funds sold by Enterprise Capital Management through third-party
broker dealers, sales of protection products through brokerage general
agencies, sales of corporate-owned life insurance ("COLI") products by the
Company's corporate marketing team and sales of a variety of financial products
and services through the Company's Trusted Securities Advisors Corp.
subsidiary. The Company primarily sells its products in all 50 of the United
States, the District of Columbia, the U.S. Virgin Islands, Guam and the
Commonwealth of Puerto Rico.
In 2001, the MONY Group Inc. acquired two new subsidiaries, Advest Group
Inc. ("Advest") and Matrix Capital Markets Group ("Matrix").
2. Investment Agreement:
On December 30, 1997, affiliates of Goldman, Sachs & Co. (the "Investors"),
one of the underwriters for the Offerings, entered into an investment agreement
with MONY (the "Investment Agreement"), pursuant to which: (i) the Investors
purchased, for $115.0 million (the "Consideration"), Surplus Notes issued by
MONY (the "MONY Notes") with an aggregate principal amount equal to the
Consideration (see Note 16), and (ii) the Investors purchased, for $10.0
million, warrants (the "Warrants") to purchase from the Holding Company (after
giving effect to the initial public offering) in the aggregate 7.0% of the
fully diluted Common Stock as of the first date following such effectiveness on
which shares of Common Stock were first issued to Eligible Policyholders
(December 24, 1998).
3. The Closed Block:
On November 16, 1998, the Company established a closed block (the "Closed
Block") of certain participating insurance policies as defined in the Plan (the
"Closed Block Business"). In conjunction therewith, the Company allocated
assets to the Closed Block expected to produce cash flows which, together with
anticipated revenues from the Closed Block Business, are reasonably expected to
be sufficient to support the Closed Block Business, including but not limited
to, provision for payment of claims and surrender benefits, certain expenses
and taxes, and for continuation of current payable dividend scales in effect at
the date of Demutualization, assuming the experience underlying such dividend
scales continues, and for appropriate adjustments in such scales if the
experience changes. The assets allocated to the Closed Block and the
aforementioned revenues inure solely to the benefit of the owners of policies
included in the Closed Block.
F-23
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The assets and liabilities allocated to the Closed Block are recorded in the
Company's financial statements at their historical carrying values. The
carrying value of the assets allocated to the Closed Block are less than the
carrying value of the Closed Block liabilities at the Plan Effective Date. The
excess of the Closed Block liabilities over the Closed Block assets at the Plan
Effective Date represents the total estimated future post-tax contribution
expected to emerge from the operation of the Closed Block, which will be
recognized in the Company's income over the period the policies and the
contracts in the Closed Block remain in force.
To the extent that the actual cash flows, subsequent to the Plan Effective
Date, from the assets allocated to the Closed Block and the Closed Block
Business are, in the aggregate, more favorable than assumed in establishing the
Closed Block, total dividends paid to the Closed Block policyholders in future
years will be greater than the total dividends that would have been paid to
such policyholders if the current payable dividend scales had been continued.
Conversely, to the extent that the actual cash flows, subsequent to the Plan
Effective Date, from the assets allocated to the Closed Block and the Closed
Block Business are, in the aggregate, less favorable than assumed in
establishing the Closed Block, total dividends paid to the Closed Block
policyholders in future years will be less than the total dividends that would
have been paid to such policyholders if the current payable dividend scales had
been continued. Accordingly, the recognition of the aforementioned estimated
future post-tax contribution expected to emerge from the operation of the
Closed Block is not affected by the aggregate actual experience of the Closed
Block assets and the Closed Block Business subsequent to the Plan Effective
Date, except in the unlikely event that the Closed Block assets and the actual
experience of the Closed Block Business subsequent to the Plan Effective Date
are not sufficient to pay the guaranteed benefits on the Closed Block Policies,
in which case the Company will be required to fund any such deficiency from its
general account assets outside of the Closed Block.
In addition, MONY has undertaken to reimburse the Closed Block from its
general account assets outside the Closed Block for any reduction in principal
payments due on the Series A Notes (which have been allocated to the Closed
Block) pursuant to the terms thereof, as described in Note 10. Since the Closed
Block has been funded to provide for payment of guaranteed benefits and the
continuation of current payable dividends on the policies included therein, it
will not be necessary to use general funds to pay guaranteed benefits unless
the Closed Block Business experiences very substantial ongoing adverse
experience in investment, mortality, persistency or other experience factors.
The Company regularly (at least quarterly) monitors the experience from the
Closed Block and may make changes to the dividend scale, when appropriate, to
ensure that the profits are distributed to the Closed Block policyholders in a
fair and equitable manner. In addition, periodically the New York Insurance
Department requires the filing of an independent auditor's report on the
operations of the Closed Block.
The results of the Closed Block are presented as a single line item in the
Company's statements of income entitled, "Contribution from the Closed Block."
Prior to the establishment of the Closed Block the results of the assets and
policies comprising the Closed Block were reported in various line items in the
Company's income statements, including: premiums, investment income, net
realized gains and losses on investments, benefits, amortization of deferred
policy acquisition costs, etc. In addition, all assets and liabilities
allocated to the Closed Block will be reported in the Company's balance sheet
separately under the captions "Closed Block assets" and "Closed Block
liabilities", respectively. Accordingly, certain line items in the Company's
financial statements subsequent to the establishment of the Closed Block
reflect material reductions in reported amounts, as compared to years prior to
the establishment of the Closed Block, while having no effect on net income.
See Note 4, New Accounting Pronouncements.
The pre-tax Contribution from the Closed Block includes only those revenues,
benefit payments, dividends, premium taxes, state guaranty fund assessments,
and investment expenses considered in funding the Closed Block. However, many
expenses associated with operating the Closed Block and administering the
policies included therein were excluded from and, accordingly, are not funded
in the Closed Block. These expenses are reported in the Company's statement of
operations, outside of the Contribution from the Closed Block, consistent with
how they are funded. Such expenses are reported in the separate line items to
which they apply based on the nature of such expenses. Federal income taxes
applicable to the Closed Block, which are funded in the Closed Block, are
reflected as a component of federal income tax expense in the Company's
statement of operations. Since many expenses related to the Closed Block are
funded outside the Closed Block, operating costs and expenses outside the
Closed Block are disproportionate to the level of business outside the Closed
Block.
F-24
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. Summary of Significant Accounting Policies:
Basis of Presentation
The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
("GAAP"). The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. In the opinion of management
these statements include all normal recurring adjustments necessary to present
fairly the financial position, results of operations and cash flows of the
Company for the periods presented. Actual results could differ significantly
from those estimates. The most significant estimates made in conjunction with
the preparation of the Company's financial statements include those used in
determining (i) deferred policy acquisition costs, (ii) the liability for
future policy benefits, and (iii) valuation allowances for mortgage loans and
real estate to be disposed of, and impairment writedowns for real estate held
for investment and other invested assets. Certain reclassifications have been
made in the amounts presented for prior periods to conform those periods to the
current presentation.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company and those partnerships in which the Company has a majority voting
interest. All significant intercompany accounts and transactions have been
eliminated.
Minority interest related to partnerships that are consolidated, which is
included in Accounts Payable and Other Liabilities, amounted to $0.0 million
and $17.4 million at December 31, 2000 and 1999, respectively.
Transaction
Net proceeds from the Offerings totaled $282.5 million. Approximately $60.6
million of the net proceeds were retained by the MONY Group and the balance of
approximately $221.9 million was contributed to MONY Life.
Of the net proceeds contributed by the MONY Group to MONY Life,
approximately $168.2 million is for use by MONY Life in its general operations,
approximately $13.2 million was used to fund policy credits required to be
credited to Eligible Policyholders pursuant to the Plan, and $40.5 million
represents a reimbursement for the estimated after-tax cost of expenses
incurred by MONY Life to effect the Demutualization, as required by the New
York Insurance Law.
Of the net proceeds retained by the MONY Group, approximately $2.5 million
was used to pay cash to Eligible Policyholders who received cash as described
in the Plan (other than pursuant to an expression of a preference to receive
cash), $10.0 million is for working capital for the MONY Group, $30.0 million
is to be used to pay dividends on the MONY Group's common stock and $18.1
million was used by the MONY Group to pay cash to eligible policyholders
pursuant to an expression of a preference to receive cash in accordance with
the Plan.
In connection with the Demutualization on the Plan Effective Date, eligible
policyholders received, in the aggregate, approximately $20.6 million of cash,
$13.2 million of policy credits and 34.3 million shares of common stock of the
MONY Group in exchange for their membership interests in MONY. In conjunction
with the Offerings, approximately 12.9 million shares of the common stock of
MONY Group were issued at an initial public offering of $23.50 per share. The
Demutualization was accounted for as a reorganization. Accordingly, the
Company's retained earnings at the Plan Effective Date (net of the
aforementioned cash payments and policy credits which were charged directly to
retained earnings) were reclassified to "Common stock" and "Capital in excess
of par."
In addition, the capital of the MONY Group includes $10.0 million relating
to the Warrants (see Note 2), which as a subsidiary of MONY prior to the Plan
Effective Date, was recorded in MONY's consolidated financial statements as
minority interest.
F-25
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Valuation of Investments and Realized Gains and Losses
All of the Company's fixed maturity securities are classified as
available-for-sale and are reported at estimated fair value. The Company's
equity securities are comprised of investments in common stocks and limited
partnership interests. The Company's investments in common stocks are
classified as available-for-sale and are reported at estimated fair value. The
Company accounts for its investments in limited partnership interests in
accordance with the equity method of accounting or the cost method of
accounting depending upon the Company's percentage of ownership of the
partnership and the date it was acquired. In general, partnership interests
acquired after May 18, 1995 are accounted for in accordance with the equity
method of accounting if the Company's ownership interest exceeds 3 percent,
whereas, if the partnership was acquired prior to May 18, 1995, the equity
method would be applied only if the Company's ownership interest exceeded 20
percent. In all other circumstances the Company accounts for its investment in
limited partnership interests in accordance with the cost method. Unrealized
gains and losses on fixed maturity securities and common stocks are reported as
a separate component of other comprehensive income, net of deferred income
taxes and an adjustment for the effect on deferred policy acquisition costs
that would have occurred if such gains and losses had been realized. The cost
of fixed maturity securities and common stock is adjusted for impairments in
value deemed to be other than temporary. These adjustments are reflected as
realized losses on investments. Realized gains and losses on sales of
investments are determined on the basis of specific identification.
Mortgage loans on real estate are stated at their unpaid principal balances,
net of valuation allowances. Valuation allowances are established for the
excess of the carrying value of a mortgage loan over its estimated fair value
when the loan is considered to be impaired. Mortgage loans are considered to be
impaired when, based on current information and events, it is probable that the
Company will be unable to collect all amounts due according to the contractual
terms of the loan agreement. Estimated fair value is based on either the
present value of expected future cash flows discounted at the loan's original
effective interest rate, or the loan's observable market price (if considered
to be a practical expedient), or the fair value of the collateral if the loan
is collateral dependent and if foreclosure of the loan is considered probable.
The provision for loss is reported as a realized loss on investment. Loans in
foreclosure and loans considered to be impaired, other than restructured loans,
are placed on non-accrual status. Interest received on non-accrual status
mortgage loans is included in investment income in the period received.
Interest income on restructured mortgage loans is accrued at the restructured
loans' interest rate.
Real estate held for investment, as well as related improvements, are
generally stated at cost less depreciation. Depreciation is determined using
the straight-line method over the estimated useful life of the asset (which may
range from 5 to 40 years). Cost is adjusted for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be recoverable. In performing the review for recoverability, management
estimates the future cash flows expected from real estate investments,
including the proceeds on disposition. If the sum of the expected undiscounted
future cash flows is less than the carrying amount of the real estate, an
impairment loss is recognized. Impairment losses are based on the estimated
fair value of the real estate, which is generally computed using the present
value of expected future cash flows from the real estate discounted at a rate
commensurate with the underlying risks. Real estate acquired in satisfaction of
debt is recorded at estimated fair value at the date of foreclosure. Real
estate that management intends to sell is classified as "to be disposed of."
Real estate to be disposed of is reported at the lower of its current carrying
value or estimated fair value less estimated sales costs. Changes in reported
values relating to real estate to be disposed of and impairments of real estate
held for investment are reported as realized gains or losses on investments.
Policy loans are carried at their unpaid principal balances. Cash and cash
equivalents include cash on hand, amounts due from banks and highly liquid debt
instruments with an original maturity of three months or less.
Recognition of Insurance Revenue and Related Benefits
Premiums from participating and non-participating traditional life, health
and annuity policies with life contingencies are recognized as premium income
when due. Benefits and expenses are matched with such income so as to result in
the recognition of profits over the life of the contracts. This match is
accomplished by means of the provision for liabilities for future policy
benefits and the deferral and subsequent amortization of policy acquisition
costs.
F-26
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenue from these types of
products consist of amounts assessed during the period against policyholders'
account balances for policy administration charges, cost of insurance and
surrender charges and mortality and expense charges on variable contracts.
Policy benefits charged to expense include benefit claims incurred in the
period in excess of the related policyholders' account balance.
Deferred Policy Acquisition Costs ("DAC")
The costs of acquiring new business, principally commissions, underwriting,
agency, and policy issue expenses, all of which vary with and are primarily
related to the production of new business, are deferred.
For participating traditional life policies, DAC is amortized over the
expected life of the contracts (30 years) as a constant percentage based on the
present value of estimated gross margins expected to be realized over the life
of the contracts using the expected investment yield. At December 31, 2000, the
expected investment yield for the Closed Block was 7.29% for the year 2000 with
subsequent years grading down to an ultimate aggregate yield of 7.12% in year
2013. The expected investment yield was 7.50% for participating traditional
life policies issued subsequent to the creation of the Closed Block. Estimated
gross margins include anticipated premiums and investment results less claims
and administrative expenses, changes in the net level premium reserve and
expected annual policyholder dividends.
For universal life products and investment-type products, DAC is amortized
over the expected life of the contracts (ranging from 15 to 30 years) as a
constant percentage based on the present value of estimated gross profits
expected to be realized over the life of the contracts using the initial locked
in discount rate. For non-participating term policies, DAC is amortized over
the expected life of the contracts (ranging from 10 to 20 years) in proportion
to premium revenue recognized. The discount rate for all products is 8%.
Estimated gross profits arise principally from investment results, mortality
and expense margins and surrender charges.
DAC is subject to recoverability testing at the time of policy issuance and
loss recognition testing at the end of each accounting period. The effect on
the amortization of DAC of revisions in estimated experience is reflected in
earnings in the period such estimates are revised. In addition, the effect on
the DAC asset that would result from the realization of unrealized gains
(losses) is recognized through an offset to Other Comprehensive Income as of
the balance sheet date.
Future Policy Benefits and Policyholders' Account Balances
Future policy benefit liabilities for participating traditional life
policies are calculated using a net level premium method on the basis of
actuarial assumptions equal to guaranteed mortality and dividend fund interest
rates. The liability for annual dividends represents the accrual of annual
dividends earned. Dividend fund interest assumptions range from 2.0 percent to
5.5 percent.
Policyholders' account balances for universal life and investment-type
contracts represent an accumulation of gross premium payments plus credited
interest less expense and mortality charges and withdrawals. The weighted
average interest crediting rate for universal life products was approximately
5.9%, 5.6% and 6.0% for the years ended December 31, 2000, 1999, and 1998,
respectively. The weighted average interest crediting rate for investment-type
products was approximately 4.9%, 5.1% and 5.2% for the years ended December 31,
2000, 1999, and 1998, respectively.
Dividends to Policyholders
Dividends to policyholders, which are substantially all on the Closed Block
Business (see Note 3) are determined annually by the Board of Directors of MONY
Life. The aggregate amount of policyholders' dividends is related to actual
interest, mortality and morbidity for the year.
F-27
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Participating Business
At December 31, 2000 and 1999, participating business, substantially all of
which is in the Closed Block, represented approximately 53.3% and 63.5% of the
Company's life insurance in force, and 74.4% and 81.2% of the number of life
insurance policies in force, respectively. For each of the years ended December
31, 2000 and 1999, participating business, represented approximately 91.6% and
95.9%, respectively, of life insurance premiums.
Property, Equipment, and Leasehold Improvements
Property, equipment and leasehold improvements, which are reported in Other
Assets, are stated at cost less accumulated depreciation and amortization.
Depreciation is determined using the straight-line method over the estimated
useful lives of the related assets which generally range from 3 to 40 years.
Amortization of leasehold improvements is determined using the straight-line
method over the lesser of the unexpired lease term or the estimated useful life
of the improvement.
Accumulated depreciation of property and equipment and amortization of
leasehold improvements was $46.7 million and $38.4 million at December 31, 2000
and 1999, respectively. Related depreciation and amortization expense was $18.1
million, $16.6 million, and $11.4 million for the years ended December 31,
2000, 1999, and 1998, respectively.
Federal Income Taxes
The Company files a consolidated federal income tax return with its life and
non-life affiliates except Sagamore Financial Corporation and its subsidiaries.
Deferred income tax assets and liabilities are recognized based on the
difference between financial statement carrying amounts and income tax bases of
assets and liabilities using enacted income tax rates and laws.
Reinsurance
The Company has reinsured certain of its life insurance and investment
contracts with other insurance companies under various agreements. Amounts due
from reinsurers are estimated based on assumptions consistent with those used
in establishing the liabilities related to the underlying reinsured contracts.
Policy and contract liabilities are reported gross of reserve credits. Gains on
reinsurance are deferred and amortized into income over the remaining life of
the underlying reinsured contracts.
In determining whether a reinsurance contract qualifies for reinsurance
accounting, Statement of Financial Accounting Standards ("SFAS") No. 113
"Accounting and reporting for reinsurance of short-duration and long-duration
contracts" requires that there be a "reasonable possibility" that the reinsurer
may realize a "significant loss" from assuming insurance risk under the
contract. In making this assessment, the Company projects the results of the
policies reinsured under the contract under various scenarios and assesses the
probability of such results actually occurring. The projected results represent
the present value of all the cash flows under the reinsurance contract. The
Company generally defines a "reasonable possibility" as having a probability of
at least 10%. In assessing whether the projected results of the reinsured
business constitute a "significant loss", the Company considers: (i) the ratio
of the aggregate projected loss, discounted at an appropriate rate of interest
(the "aggregate projected loss"), to an estimate of the reinsurer's investment
in the contract, as hereafter defined, and (ii) the ratio of the aggregate
projected loss to an estimate of the total premiums to be received by the
reinsurer under the contract discounted at an appropriate rate of interest.
The reinsurer's investment in a reinsurance contract consists of amounts
paid to the ceding company at the inception of the contract (e.g. expense
allowances and the excess of liabilities assumed by the reinsurer over the
assets transferred to the reinsurer under the contract) plus the amount of
capital required to support such business consistent with prudent business
practices, regulatory requirements, and the reinsurer's credit rating. The
Company estimates the capital required to support such business based on what
it considers to be an appropriate level of risk-based capital in light of
regulatory requirements and prudent business practices.
F-28
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Separate Accounts
Separate accounts are established in conformity with insurance laws and are
generally not chargeable with liabilities that arise from any other business of
the Company. Separate account assets are subject to general account claims only
to the extent that the value of such assets exceeds the separate account
liabilities. Investments held in separate accounts and liabilities of the
separate accounts are reported separately as assets and liabilities.
Substantially all separate account assets are reported at estimated fair value.
Investment income and gains or losses on the investments of separate accounts
accrue directly to contractholders and, accordingly, are not reflected in the
Company's consolidated statements of income and cash flows. Fees charged to the
separate accounts by the Company (including mortality charges, policy
administration fees and surrender charges) are reflected in the Company's
revenues.
Consolidated Statements of Cash Flows -- Non-cash Transactions
For the years ended December 31, 2000, 1999, and 1998, respectively, real
estate of $0.5 million, $27.0 million, and $5.0 million was acquired in
satisfaction of debt (including the Closed Block of $22.0 million). At December
31, 2000 and 1999, the Company owned real estate acquired in satisfaction of
debt of $41.5 million and $121.0 million, respectively. Other non-cash
transactions, which are reflected in the statement of cash flows as a
reconciling item from net income to net cash provided by operating activities,
consisted primarily of stock distributions from the Company's partnership
investments and payment-in-kind for interest due on certain fixed maturity
securities.
Extraordinary Item Repurchase of Surplus Notes
For the year ended December 31, 2000, the Company reported an extraordinary
charge of $37.7 after tax ($58.1 million pre-tax) million. The charge in 2000
represents the cost incurred by the company in connection with the repurchase
of the $115.0 million face amount 9.5% coupon surplus notes, and $123.0 million
face amount of its $125.0 million face amount 11.25% coupon surplus notes that
were outstanding at December 31, 1999.
Demutualization Expenses
The charge reflected in 1999 represented expenses incurred in connection
with the Company's commission-free sale and purchase program (the "Program")
offered to shareholders pursuant to the Plan. The Program commenced August 17,
1999 and ended on November 17, 1999. Pursuant to the Program, shareholders who
owned fewer than 100 shares could sell all of their shares or purchase
additional shares to round up to 100 shares without incurring commissions. The
costs incurred in 1998 primarily included the fees of financial, legal,
actuarial and accounting advisors to the Company and to the New York Insurance
Department, as well as printing and postage for communication with
policyholders incurred in connection with the Demutualization.
New Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 requires all derivatives to be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. The corresponding derivative gains and
losses should be reported based on the hedge relationship that exists, if there
is one. Changes in the fair value of derivatives that are not designated as
hedges or that do not meet the hedge accounting criteria in SFAS 133, are
required to be reported in earnings. SFAS 133, as amended by SFAS 137, is
effective for all fiscal quarters of the fiscal years beginning after June 15,
2000. SFAS 137 delayed the effective date of SFAS 133 by one year. Adoption of
this standard will have no material effect on the Company's earnings or
financial position.
On December 26, 2000 the American Institute of Certified Public Accountants
issued Statement of Position 00-3, "Accounting by Insurance Enterprises for
Demutualizations and Formations of Mutual Insurance Holding Companies for
Certain Long-Duration Participating Contracts" (SOP 00-3). SOP 00-3 provides
guidance with respect to accounting for demutualizations and requires, among
other things, that, (i) Closed Block assets, liabilities, revenues, and
expenses should be displayed in financial
F-29
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
statements combined with all other assets, liabilities, revenues, and expenses
outside the Closed Block, and (ii) demutualization expenses be classified as a
single line item within income from continuing operations. The guidance in
SOP-03 requires restatement of financial statements presented for years prior
to its issuance and is effective for fiscal years beginning after December 15,
2000, except as it pertains to demutualization expenses which is effective
immediately. Accordingly, the consolidated statements of income and
comprehensive income and related per share amounts for 1999 and 1998 have been
restated from those reported in the Company's prior year to reflect the
reclassification of demutualization expenses and related tax effects of $2.0
million in 1999 and $34.3 million in 1998 from extraordinary items to a
separate line item entitled "Demutualization expenses." The adoption of the
remaining provisions of this SOP will not have any impact on the Company's
financial position or results of operations.
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities, a
replacement of SFAS No. 125." SFAS No. 140 specifies the accounting and
reporting requirements for securitizations and other transfers of financial
assets and collateral, recognition and measurement of servicing assets and
liabilities and the extinguishment of liabilities. SFAS No. 140 is effective
for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001 and is to be applied prospectively
with certain exceptions. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000.
Adoption of the new requirements is not expected to have a significant impact
on the Company's consolidated financial position or earnings.
In December 1999, the staff of the Securities and Exchange Commission (the
"SEC") issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition
in Financial Statements," which was effective fourth quarter 2000. SAB No. 101
addresses revenue recognition issues; its implementation did not have a
material impact on the Company's consolidated financial position or statement
of earnings.
5. Segment Information:
The Company's business activities consist of the following: protection
product operations, accumulation product operations, mutual fund operations,
securities broker-dealer operations, insurance brokerage operations, and
certain insurance lines of business no longer written by the Company (the
"run-off businesses"). These business activities represent the Company's
operating segments. Except as discussed below, these segments are managed
separately because they either provide different products or services, are
subject to different regulation, require different strategies, or have
different technology requirements.
Management considers the Company's mutual fund operations to be an integral
part of the products offered by the Company's accumulation products segment,
since substantially all the mutual funds sold by the Company are offered
through, and in conjunction with, the products marketed by the accumulation
products segment. Accordingly, for management purposes (including, performance
assessment and making decisions regarding the allocation of resources), the
Company aggregates its mutual fund operations with its accumulation products
segment.
Of the aforementioned segments, only the protection products segment and the
accumulation products segment qualify as reportable segments in accordance with
FASB Statement No. 131. All of the Company's other segments are combined and
reported in an other products segment.
Products comprising the protection products segment primarily include a wide
range of insurance products, including: whole life, term life, universal life,
variable universal life, corporate-owned life insurance, last survivor variable
universal life, last survivor universal life, group universal life and
special-risk products. In addition, included in the protection products segment
are: (i) the assets and liabilities transferred pursuant to the Group Pension
Transaction, as well as the Group Pension Profits (see Note 10), (ii) the
Closed Block assets and liabilities, as well as the Contribution from the
Closed Block and (iii) the Company's disability income insurance business.
Products comprising the accumulation products segment primarily include
flexible premium variable annuities, single premium deferred annuities,
immediate annuities, proprietary mutual funds, investment management
F-30
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
services, and certain other financial services products. The Company's other
products segment primarily consists of the securities broker-dealer operation,
the insurance brokerage operation, and the run-off businesses. The securities
broker-dealer operation markets the Company's proprietary investment products
and, in addition, provides customers of the Company's protection and
accumulation products access to other non-proprietary investment products
(including stocks, bonds, limited partnership interests, tax-exempt unit
investment trusts and other investment securities). The insurance brokerage
operation provides the Company's field agency force with access to life,
annuity, small group health and specialty insurance products written by other
carriers to meet the insurance and investment needs of its customers. The
run-off businesses primarily consist of group life and health business, as well
as group pension business that was not included in the Group Pension
Transaction (see Note 10).
Set forth in the table below is certain financial information with respect
to the Company's operating segments as of and for each of the years ended
December 31, 2000, 1999 and 1998, as well as amounts not allocated to the
segments. Except for various allocations discussed below, the accounting
policies of the segments are the same as those described in the summary of
significant accounting policies. The Company evaluates the performance of each
operating segment based on profit or loss from operations before income taxes
and nonrecurring items (e.g. items of an unusual or infrequent nature). The
Company does not allocate certain non-recurring items to the segments. In
addition, substantially all segment revenues are from external sources.
Assets have been allocated to the segments in amounts sufficient to support
the associated liabilities of each segment. In addition, capital is allocated
to each segment in amounts sufficient to maintain a targeted regulatory
risk-based capital ("RBC") level for each segment (see Note 19). Allocations of
net investment income and net realized gains on investments were based on the
amount of assets allocated to each segment. Other costs and operating expenses
were allocated to each of the segments based on: (i) a review of the nature of
such costs, (ii) time studies analyzing the amount of employee compensation
costs incurred by each segment, and (iii) cost estimates included in the
Company's product pricing. Substantially all non-cash transactions and impaired
real estate (including real estate acquired in satisfaction of debt) have been
allocated to the Protection Products segment (see Note 4).
F-31
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amounts reported as "reconciling amounts" in the table below primarily
relate to: (i) contracts issued by MONY Life relating to its employee benefit
plans, (ii) a one-time restructuring charge in 1999 of $59.7 million pre-tax
relating to the Company's early retirement program (see Note 22) and (iii)
demutualization expenses incurred in 1999 and 1998.
Segment Summary Financial Information
2000 1999 1998
------ ------ ------
($ in millions)
Premiums:
Protection Products.................................................. $103.3 $ 82.0 $602.2
Accumulation Products................................................ 1.3 0.9 2.6
Other Products....................................................... 13.5 13.4 16.9
------ ------ ------
$118.1 $ 96.3 $621.7
====== ====== ======
Universal life and investment-type product policy fees:
Protection Products.................................................. $134.8 $122.3 $ 86.2
Accumulation Products................................................ 70.0 73.3 64.1
Other Products....................................................... 1.0 0.7 1.3
------ ------ ------
$205.8 $196.3 $151.6
====== ====== ======
Net investment income and net realized gains (losses) on investments:
Protection Products.................................................. $408.0 $445.1 $655.5
Accumulation Products................................................ 124.9 132.4 136.3
Other Products....................................................... 68.9 67.3 63.0
Reconciling amounts.................................................. 17.9 2.3 2.2
------ ------ ------
$619.7 $647.1 $857.0
====== ====== ======
Other income:
Protection Products(1)(7)............................................ $ 98.3 $123.0 $ 85.5
Accumulation Products................................................ 120.2 95.1 72.8
Other Products....................................................... 77.4 80.7 61.1
Reconciling amounts.................................................. 5.1 4.8 5.7
------ ------ ------
$301.0 $303.6 $225.1
====== ====== ======
Amortization of deferred policy acquisition costs:
Protection Products.................................................. $ 50.4 $ 39.6 $ 92.4
Accumulation Products................................................ 28.3 30.7 29.6
------ ------ ------
$ 78.7 $ 70.3 $122.0
====== ====== ======
Benefits to policyholders:(2)
Protection Products.................................................. $161.4 $141.7 $663.4
Accumulation Products................................................ 68.2 73.7 79.6
Other Products....................................................... 31.5 33.7 41.6
Reconciling amounts.................................................. 7.6 4.5 7.9
------ ------ ------
$268.7 $253.6 $792.5
====== ====== ======
Other operating costs and expenses:
Protection Products.................................................. $262.2 $277.4 $287.1
Accumulation Products................................................ 120.0 105.7 84.4
Other Products....................................................... 100.3 93.1 80.2
Reconciling amounts(11).............................................. 13.3 62.4 27.2
------ ------ ------
$495.8 $538.6 $478.9
====== ====== ======
F-32
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2000 1999 1998
--------- --------- ---------
($ in millions)
Income before income taxes:
Protection Products............... $ 278.1 $ 315.0 $ 193.7
Accumulation Products............. 98.4 89.6 80.5
Other Products.................... 27.7 34.1 19.2
Reconciling amounts............... (5.4) (59.8) (27.2)
--------- --------- ---------
$ 398.8 $ 378.9 $ 266.2
========= ========= =========
Assets:
Protection Products (3) (8)....... $16,239.0 $16,181.4 $16,580.9
Accumulation Products............. 5,593.5 6,175.0 6,171.3
Other Products.................... 1,060.8 1,187.6 1,256.2
Reconciling amounts............... 1,309.0 1,176.1 890.9
--------- --------- ---------
$24,202.3 $24,720.1 $24,889.3
========= ========= =========
Deferred policy acquisition costs:
Protection Products (9)........... $ 1,064.3 $ 1,094.9 $ 857.6
Accumulation Products............. 145.4 153.3 136.7
--------- --------- ---------
$ 1,209.7 $ 1,248.2 $ 994.3
========= ========= =========
Policyholders' liabilities:
Protection Products (4) (10)...... $10,290.7 $10,231.7 $10,267.0
Accumulation Products............. 1,060.0 1,236.3 1,318.6
Other Products.................... 381.4 418.9 455.6
Reconciling amounts............... 17.7 17.4 17.4
--------- --------- ---------
$11,749.8 $11,904.3 $12,058.6
========= ========= =========
Separate account liabilities: (5)
Protection Products (6)........... $ 3,939.5 $ 3,843.5 $ 4,056.8
Accumulation Products............. 4,072.9 4,548.9 4,452.6
Other Products.................... 499.5 604.2 621.9
Reconciling amounts............... 770.1 832.3 776.4
--------- --------- ---------
$ 9,282.0 $ 9,828.9 $ 9,907.7
========= ========= =========
- ----------
(1)Includes Group Pension Profits of $37.1 million, $63.0 million and $56.8
million for the years ended December 31, 2000, 1999 and 1998, respectively.
(See Note 10).
(2)Includes interest credited to policyholders' account balances.
(3)Includes assets transferred in the Group Pension Transaction of $4,927.7
million, $5,109.8 million and $5,751.8 million as of December 31, 2000,
1999 and 1998, respectively.
(4)Includes policyholder liabilities transferred in the Group Pension
Transaction of $1,468.1 million, $1,645.7 million and $1,824.9 million as
of December 31, 2000, 1999 and 1998 respectively.
(5)Each segment includes separate account assets in an amount not less than
the corresponding liability reported.
(6)Includes separate account liabilities transferred in the Group Pension
Transaction of $3,416.7 million, $3,432.7 million and $3,829.6 million as
of December 31, 2000, 1999 and 1998, respectively.
(7)Includes $42.8 million, $44.8 million and $5.7 million relating to the
Contribution from the Closed Block for the years ended December 31, 1999
and for period from November 16, 1998 through December 31, 1998 ended
December 31, 2000 and 1999, respectively (see Note 3 and Note 20).
(8)Includes Closed Block assets of $6,251.2 million, $6,182.1 million and
$6,161.2 million as of December 31, 2000, 1999 and 1998, respectively (see
Note 3 and Note 20).
(9)Includes deferred policy acquisition costs allocated to the Closed Block of
$552.6 million, $689.9 million and $554.6 million as of December 31, 2000,
1999 and 1998, respectively (see Note 3 and Note 20).
(10)Includes Closed Block policyholders' liabilities of $7,293.6 million and
$7,241.0 million and $7,177.1 million as of December 31, 2000, 1999 and
1998, respectively (see Note 3 and Note 20).
(11)Includes demutualization expenses for the years ended December 31, 1999 and
1998 of $2.0 million and $27.2 million, respectively.
F-33
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Substantially all of the Company's revenues are derived in the United
States. Revenue derived from outside the United States is not material and
revenue derived from any single customer does not exceed 10 percent of total
consolidated revenues.
Following is a summary of revenues by product for the years ended December
31, 2000, 1999 and 1998:
2000 1999 1998
------ ------ ------
($ in millions)
Premiums:
Individual life (1).................................... $102.8 $ 81.9 $602.5
Disability income insurance............................ 0.5 0.6 0.2
Group insurance........................................ 13.5 13.4 16.9
Other.................................................. 1.3 0.4 2.1
------ ------ ------
Total........................................... $118.1 $ 96.3 $621.7
====== ====== ======
2000 1999 1998
------ ------ ------
($ in millions)
Universal life and investment-type product policy fees:
Universal life......................................... $ 69.0 $ 73.2 $ 55.4
Variable universal life................................ 54.7 37.6 20.4
Group universal life................................... 11.1 11.5 10.4
Individual variable annuities.......................... 69.7 72.8 63.4
Individual fixed annuities............................. 1.3 1.2 2.0
------ ------ ------
Total........................................... $205.8 $196.3 $151.6
====== ====== ======
- ----------
(1)Excludes revenues from individual life in the Closed Block of $582.4
million, $620.8 million and $100.1 million for the year ended December 31,
2000, 1999 and 1998 respectively.
6. Deferred Policy Acquisition Costs:
Policy acquisition costs deferred and amortized in 2000, 1999 and 1998 are
as follows:
2000 1999 1998
------ ------ --------
($ in millions)
Balance, beginning of year...................................... $558.3 $439.7 $1,007.1
Balance transferred to the Closed Block at November 16, 1998.... -- -- (562.3)
------ ------ --------
558.3 439.7 444.8
------ ------ --------
Cost deferred during the year................................... 190.8 148.7 124.7
Amortized to expense during the year............................ (78.7) (70.3) (122.0)
Effect on DAC from unrealized (gains) losses (see Note 4)....... (13.3) 40.2 (7.8)
------ ------ --------
Balance, end of the year........................................ $657.1 $558.3 $ 439.7
====== ====== ========
F-34
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Pension Plans and Other Postretirement Benefits:
Pension Plans --
The Company has a qualified pension plan covering substantially all of its
salaried employees. The provisions of the plan provide both (a) defined benefit
accruals based on (i) years of service, (ii) the employee's final average
annual compensation and (iii) wage bases or benefits under Social Security and
(b) defined contribution accruals based on a Company matching contribution
equal to 100% of the employee's elective deferrals under the incentive savings
plan for employees up to 3% of the employee's eligible compensation and an
additional 2% of eligible compensation for each active participant. Effective
June 15, 1999, prospective defined contribution accruals in the defined benefit
plan ceased and were redirected to the Investment Plan Supplement for
Employees. The Company did not make any contribution in the current year or
prior year under Section 404 of the Internal Revenue Code ("IRC") because the
plan was fully funded under Section 412 of the IRC.
During 1999, the Company amended its Qualified Pension plan which reduced
certain benefit liabilities payable thereunder. The amendment resulted in a
decrease of $27.0 million in the plan's projected benefit obligation.
In July 1999, the Company offered special benefits to its employees who
elected by August 15, 1999, voluntary termination of employment (special
termination benefits). The special termination benefits represented benefits in
excess of that which would normally be due to employees electing to retire
early. These excess benefits were calculated based on grants of additional
years of service and age used in the benefit calculation. All of the special
termination benefits relating to the Company's qualified plan, which aggregated
$30.6 million, will be paid from the Plan's assets. All the benefits paid
relating to the Company's non-qualified plan, which aggregated $19.4 million,
will be paid directly from the Company's assets. As a result of the
aforementioned early retirement offer, the Company recorded a charge of $59.7
million in 1999 which included the aforementioned expenses in addition to
severance and other related expenses and reflected this amount in Other
Operating Costs and Expenses.
The assets of the qualified pension plan are primarily invested in MONY
Pooled Accounts which include common stock, real estate, private placement debt
securities and bonds. At December 31, 2000 and 1999, $466.4 million and $495.7
million were invested in the MONY Pooled Accounts. Benefits of $33.9 million,
$40.4 million and $26.3 million were paid by this plan for the years ended
December 31, 2000, 1999, and 1998, respectively.
The Company also sponsors a non-qualified employee excess pension plan,
which provides both defined benefits and defined contribution accruals in
excess of Internal Revenue Service limits to certain employees. The benefits
are based on years of service and the employees final average annual
compensation. Pension benefits are paid from Company's general accounts.
Postretirement Benefits--
The Company provides certain health care and life insurance benefits for
retired employees and field underwriters. The Company amortizes its
postretirement transition obligation over a period of twenty years.
Assumed health care cost trend rates typically have a significant effect on
the amounts reported for health care plans. However, under the Company's
postretirement healthcare plan, there is a per capita limit on the Company's
healthcare costs, as a result, a one-percentage point change in the assumed
healthcare cost trend rates would have an immaterial affect on amounts reported.
F-35
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following presents the change in the benefit obligation, change in plan
assets and other information with respect to the Company's qualified and
non-qualified defined benefit pension plans and other benefits which represents
the Company's postretirement benefit obligation:
Pension Benefits Other Benefits
--------------- ---------------
2000 1999 2000 1999
------ ------ ------- ------
($ in millions)
Change in benefit obligation:
Benefit obligation at beginning of year.............................. $373.3 $398.3 $ 97.7 $100.0
Service cost......................................................... 6.1 11.7 1.2 2.0
Interest cost........................................................ 29.4 27.3 7.3 7.2
Curtailment gain..................................................... (2.0) (3.8) -- --
Terminated benefits.................................................. -- 50.0 -- --
Plan amendment....................................................... -- (27.0) -- --
Actuarial loss/(gain)................................................ 18.9 (38.8) 5.8 (4.0)
Benefits paid........................................................ (39.6) (44.4) (8.1) (7.5)
------ ------ ------- ------
Benefit obligation at end of year.................................... 386.1 373.3 103.9 97.7
------ ------ ------- ------
Change in plan assets:
Fair value of plan assets at beginning of year....................... $498.0 $459.8 $ -- $ --
Actual return on plan assets......................................... 9.1 77.4 -- --
Employer contribution................................................ 8.6 6.7 8.1 7.5
Benefits and expenses paid........................................... (45.8) (45.9) (8.1) (7.5)
------ ------ ------- ------
Fair value of plan assets at end of year............................. 469.9 498.0 -- --
------ ------ ------- ------
Funded status........................................................ 83.8 124.7 (103.9) (97.7)
Unrecognized actuarial loss/(gain)................................... 5.8 (57.2) 12.6 7.4
Unamortized transition obligation.................................... (5.5) (13.0) 36.7 39.4
Unrecognized prior service cost...................................... (14.0) (15.6) (0.9) (1.0)
------ ------ ------- ------
Net amount recognized................................................ $ 70.1 $ 38.9 $ (55.5) $(51.9)
====== ====== ======= ======
Amounts recognized in the statement of financial position consist of:
Prepaid benefit cost................................................. $123.0 $ 93.8 $ -- $ --
Accrued benefit liability............................................ (52.9) (55.0) (55.5) (51.9)
Intangible asset..................................................... 2.4 0.1 -- --
Accumulated other comprehensive income............................... (2.4) -- -- --
------ ------ ------- ------
Net amount recognized................................................ $ 70.1 $ 38.9 $ (55.5) $(51.9)
====== ====== ======= ======
The Company's qualified plan had assets of $469.9 million and $498.0 million
at December 31, 2000 and 1999, respectively. The projected benefit obligation
and accumulated benefit obligation for the qualified plan were $318.3 million
and $292.2 million at December 31, 2000 and $311.0 million and $285.4 million
at December 31, 1999, respectively.
The projected benefit obligation and accumulated benefit obligation for the
non-qualified defined benefit pension plan, which is unfunded, were $67.8
million and $59.0 million at December 31, 2000 and $62.3 million and $55.0
million at December 31, 1999, respectively.
F-36
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Pension Benefits Other Benefit:
--------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
($ in millions)
Weighted-average assumptions as of December 31:
Discount rate.................................. 7.5% 8.0% 7.5% 8.0%
Expected return on plan assets................. 10.0% 10.0% -- --
Rate of compensation increase.................. 5.0% 5.0% 5.0% 5.0%
For measurements purposes, a 10% percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2001. The rate was
assumed to decrease gradually to 6% percent for 2010 and remain at that level
thereafter.
Components of net periodic benefit cost for the pension and other
post-retirement plans are as follows:
Pension Benefits Other Benefits
---------------------- -------------------
2000 1999 1998 2000 1999 1998
------ ------ ------ ----- ----- -----
($ in millions)
Components of net periodic benefit cost
Service cost........................... $ 6.1 $ 11.7 $ 14.4 $ 1.2 $ 2.0 $ 1.3
Interest cost.......................... 29.4 27.3 26.3 6.5 7.2 6.4
Expected return on plan assets......... (46.9) (44.2) (41.8) -- -- --
Amortization of prior service cost..... (1.5) (0.8) 1.0 (0.1) (0.1) --
Curtailment gain....................... (2.0) (3.8) -- -- -- --
Special termination benefits........... -- 50.0 -- -- -- --
Recognized net actuarial loss.......... (0.2) -- -- -- 1.1 0.1
Amortization of transition items....... (7.9) (7.5) (7.5) 3.1 3.1 3.1
------ ------ ------ ----- ----- -----
Net periodic benefit cost.............. $(23.0) $ 32.7 $ (7.6) $10.7 $13.3 $10.9
====== ====== ====== ===== ===== =====
The Company also has a qualified money purchase pension plan covering
substantially all career field underwriters. Company contributions of 5% of
earnings plus an additional 2% of such earnings in excess of the social
security wage base are made each year. In addition, after-tax voluntary field
underwriter contribution of up to 10% of earnings are allowed. At December 31,
2000 and 1999, the fair value of plan assets was $231.2 million and $250.3
million, respectively. For the years ended December 31, 2000, 1999, and 1998,
the Company contributed $3.2 million, $3.1 million and $3.2 million to the
plan, respectively, which amounts are reflected in Other Operating Costs and
Expenses.
The Company has a non-qualified defined contribution plan, which is
unfunded. The non-qualified defined contribution plan projected benefit
obligation which equaled the accumulated benefit obligation was $61.0 million
and $62.2 million as of December 31, 2000 and 1999, respectively. The
non-qualified defined contribution plan's net periodic expense was $7.2
million, $9.3 million and $6.6 million for the years ended December 31, 2000,
1999 and 1998, respectively.
The Company also has incentive savings plans in which substantially all
employees and career field underwriters are eligible to participate. The
Company matches field underwriter contributions up to 2% of eligible
compensation and may also make an additional profit sharing contribution for
non-officer employees. As with the Employee Excess Plan, the Company also
sponsors non-qualified excess defined contribution plans for both the field
underwriter retirement plan and the incentive savings plan for field
underwriters.
8. Income Taxes:
The Holding Company files a consolidated income tax return with its life and
non-life affiliates, except Sagamore Financial Corporation and its subsidiaries.
F-37
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Income taxes have been calculated in accordance with the provisions of the
Internal Revenue Code of 1986, as amended. A summary of the income tax expense
(benefit) is presented below:
2000 1999 1998
------ ------ ------
($ in millions)
Income tax (benefit) expense:
Current.................................................. $ 82.1 $ 73.9 $ 84.6
Deferred................................................. 52.7 57.5 18.1
------ ------ ------
Income tax (benefit) expense before extraordinary item..... $134.8 $131.4 $102.7
Extraordinary item....................................... (20.3) -- --
------ ------ ------
Total............................................... $114.5 $131.4 $102.7
====== ====== ======
Income taxes reported in the consolidated statements of income are different
from the amounts determined by multiplying the earnings before income taxes by
the statutory federal income tax rate of 35%. The sources of the difference and
the tax effects of each are as follows:
2000 1999 1998
------ ------ ------
($ in millions)
Tax at statutory rate........................................... $139.6 $133.3 $102.7
Dividends received deduction.................................... (2.5) (1.7) (1.4)
Other........................................................... (2.3) (0.2) 1.4
------ ------ ------
Income tax expense before extraordinary item.................... $134.8 $131.4 $102.7
Extraordinary item.............................................. (20.3) -- --
------ ------ ------
Provision for income taxes...................................... $114.5 $131.4 $102.7
====== ====== ======
The Company's income tax returns for years through 1993 have been examined
by the Internal Revenue Service ("IRS"). No material adjustments were proposed
by the IRS as a result of these examinations. In the opinion of management,
adequate provision has been made for any additional taxes which may become due
with respect to open years.
The components of deferred tax liabilities and assets at December 31, 2000
and 1999 are reported in Accounts Payable and Other Liabilities in the balance
sheet and are as follows:
2000 1999
------ ------
($ in millions)
Deferred policy acquisition costs............................... $163.3 $145.0
Fixed maturities and equity securities.......................... 25.3 34.5
Other, net (1).................................................. 67.8 56.4
Nonlife subsidiaries............................................ 17.2 17.2
------ ------
Total deferred tax liabilities.................................. 273.6 253.1
------ ------
Policyholder and separate account liabilities................... 129.7 155.6
Accrued expenses................................................ 48.6 50.8
Deferred compensation and benefits.............................. 38.2 38.3
Real estate and mortgages....................................... (2.3) 25.3
------ ------
Total deferred tax assets....................................... 214.2 270.0
------ ------
Net deferred tax (liability) asset.............................. $(59.4) $ 16.9
====== ======
- ----------
(1)Includes $10.7 million and $3.8 million at December 31, 2000 and 1999 of
deferred taxes relating to net unrealized gains on fixed maturity securities
in the AEGON Portfolio (see Note 10).
F-38
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company is required to establish a valuation allowance for any portion
of the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that it will realize the
benefit of the deferred tax assets and, therefore, no such valuation allowance
has been established.
9. Leases:
The Company has entered into various operating lease agreements for office
space, furniture and equipment. These leases have remaining non-cancelable
lease terms in excess of one year. Total rental expense for these operating
leases amounted to $29.7 million in 2000, $29.6 million in 1999, and $24.5
million in 1998. The future minimum rental obligations for the next five years
and thereafter under these leases are: $34.3 million for 2001, $33.2 million
for 2002, $30.6 million for 2003, $27.6 million for 2004, $25.6 million for
2005, and $154.2 million for the years thereafter.
10. The Group Pension Transaction:
On December 31, 1993 (the "Group Pension Transaction Date"), the Company
entered into an agreement (the "Agreement") with AEGON USA, Inc. ("AEGON")
under which the Company transferred a substantial portion of its group pension
business (hereafter referred to as the "Group Pension Transaction"), including
its full service group pension contracts, consisting primarily of tax-deferred
annuity, 401(k) and managed funds lines of business, to AEGON's wholly-owned
subsidiary, AUSA Life Insurance Company, Inc. ("AUSA"). The Company also
transferred to AUSA the corporate infrastructure supporting the group pension
business, including data processing systems, facilities and regional offices.
AUSA was newly formed by AEGON solely for the purpose of facilitating this
transaction. In connection with the transaction, the Company and AEGON have
entered into certain service agreements. These agreements, among other things,
provide that the Company will continue to manage the transferred assets, and
that AUSA will continue to provide certain administrative services to the
Company's remaining group pension contracts not included in the transfer.
Pursuant to the Agreement, MONY agreed to make a $200 million capital
investment in AEGON by purchasing $150 million face amount of Series A Notes
and $50 million face amount of Series B Notes (hereinafter referred to as the
"Notes"). The Series A Notes pay interest at 6.44 percent per annum and the
Series B Notes pay interest at 6.24 percent per annum. Both the Series A Notes
and the Series B Notes mature on December 31, 2002. MONY's investment in the
Series A Notes was intended to provide AEGON with the funding necessary to
capitalize AUSA.
In accordance with GAAP, the transaction did not constitute a sale because
the Company retained substantially all the risks and rewards associated with
the Existing Deposits. Accordingly, the Company continues to reflect the
transferred assets and liabilities on its balance sheet under separate captions
entitled "Assets transferred in Group Pension Transaction" and "Liabilities
transferred in Group Pension Transaction." In addition, the Company reports in
its GAAP earnings the profits from the Existing Deposits as discussed below.
Pursuant to the Agreement, MONY receives from AUSA (i) payments on an annual
basis through December 31, 2002 (the "Group Pension Payments") equal to all of
the earnings from the Existing Deposits, (ii) a final payment (the "Final Value
Payment") at December 31, 2002 based on the remaining fair value of the
Existing Deposits, and (iii) a contingent payment (the "New Business Growth
Payment") at December 31, 2002 based on new business growth subsequent to the
Transaction Date. However, the level of new business growth necessary for MONY
to receive the New Business Growth Payment makes it unlikely that MONY will
ever receive any such payment.
With respect to the Group Pension Payments, the annual results from the
Existing Deposits are measured on a basis in accordance with the Agreement
(such basis hereafter referred to as the "Earnings Formula") which is
substantially the same as GAAP, except that: (i) asset impairments on fixed
maturity securities are only recognized when such securities are designated
with an NAIC rating of "6", and (ii) no impairment losses are recognized on
mortgage loans until such loans are disposed of or at the time, and in the
calculation, of the Final Value Payment.
F-39
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Earnings which emerge from the Existing Deposits pursuant to the application
of the Earnings Formula are recorded in the Company's financial statements only
after adjustments (primarily to recognize asset impairments in accordance with
SFAS Nos. 114 and 115) to reflect such earnings on a basis entirely in
accordance with GAAP (such earnings hereafter referred to as the "Group Pension
Profits"). Losses which arise from the application of the Earnings Formula for
any annual period will be reflected in the Company's results of operations
(after adjustments to reflect such losses in accordance with GAAP) only up to
the amount for which the Company is at risk (as described below), which at any
time is equal to the then outstanding principal amount of the Series A Notes.
Operating losses reported in any annual period pursuant to the Earnings
Formula are carried forward to reduce any earnings in subsequent years reported
pursuant to the Earnings Formula. Any resultant deficit remaining at December
31, 2002 will be deducted from the Final Value Payment and New Business Growth
Payment, if any, due to the Company. If a deficit still remains, it will be
applied (as provided for in the Agreement) as an offset against the principal
payment due to the Company upon maturity of the Series A Notes.
For the years ended December 31, 2000, 1999 and 1998, AUSA reported earnings
to the Company pursuant to the application of the Earnings Formula of $26.9
million, $35.7 million, and $49.8 million, respectively, and the Company
recorded Group Pension Profits of $37.1 million, $63.0 million and $56.8
million, respectively. In addition, the Company earned $12.8 million, $12.8
million, and $12.8 million of interest income on the Notes during the
aforementioned years.
The following sets forth certain summarized financial information relating
to the Group Pension Transaction as of and for the periods indicated, including
information regarding: (i) the general account assets transferred to support
the Existing Deposits in the Group Pension Transaction (such assets hereafter
referred to as the "AEGON Portfolio"), (ii) the transferred separate account
assets and liabilities, and (iii) the components of revenue and expense
comprising the Group Pension Profits:
As of December 31,
------------------
2000 1999
-------- --------
($ in millions)
Assets:
General Account
Fixed maturities: available for sale, at estimated fair value (amortized cost; $1,420.8 and $1,532.4,
respectively)...................................................................................... $1,419.0 $1,510.0
Mortgage loans on real estate........................................................................ 47.5 98.5
Real estate to be disposed of........................................................................ -- 16.8
Cash and cash equivalents............................................................................ 18.5 25.3
Accrued investment income............................................................................ 26.0 26.5
-------- --------
Total general account assets......................................................................... 1,511.0 1,677.1
Separate account assets............................................................................... 3,416.7 3,432.7
-------- --------
Total assets................................................................................... $4,927.7 $5,109.8
======== ========
Liabilities:
General Account (1)
Policyholders' account balances...................................................................... $1,468.1 $1,645.7
Other liabilities.................................................................................... 12.2 20.7
-------- --------
Total general account liabilities.................................................................... 1,480.3 1,666.4
Separate account liabilities (2)...................................................................... 3,416.7 3,432.7
-------- --------
Total liabilities.............................................................................. $4,897.0 $5,099.1
======== ========
- ----------
(1)Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $74.2 million
and $88.9 million as of December 31, 2000 and 1999, respectively.
(2)Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $14.7 million
and $20.3 million as of December 31, 2000 and 1999, respectively.
F-40
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the Year Ended December 31,
-------------------------------
2000 1999 1998
------ ------ ------
($ in millions)
Revenues:
Product policy fees................................. $ 26.3 $ 24.0 $ 23.3
Net investment income............................... 113.5 128.4 154.7
Net realized gains on investments................... (1.2) 18.9 7.2
------ ------ ------
Total revenues............................... 138.6 171.3 185.2
Benefits and Expenses:
Interest credited to policyholders' account balances 84.6 88.4 108.7
Other operating costs and expenses.................. 16.9 19.9 19.7
------ ------ ------
Total benefits and expenses.................. 101.5 108.3 128.4
------ ------ ------
Group Pension Profits........................ $ 37.1 $ 63.0 $ 56.8
====== ====== ======
Fixed Maturity Securities
At December 31, 2000 and 1999, there were $2.4 million and $0.0 million of
fixed maturity securities in the AEGON Portfolio deemed to have other than
temporary impairments in value. In addition, there were no fixed maturity
securities at such dates which have been non-income producing for the preceding
twelve months.
At December 31, 2000 and 1999, there were $2.4 million and $0.0 million of
problem fixed maturities (as hereafter defined--see Note 12) held in the AEGON
Portfolio. In addition, at such dates the carrying value of potential problem
fixed maturities held in the AEGON Portfolio were $0.0 million and $3.7
million. Also, none of the fixed maturity securities held in the AEGON
Portfolio at December 31, 2000 and 1999 or prior thereto had been restructured.
The amortized cost and estimated fair value of fixed maturity securities
held in the AEGON Portfolio, by contractual maturity dates, (excluding
scheduled sinking funds), as of December 31, 2000 are as follows:
Amortized Estimated
Cost Fair Value
--------- ----------
($ in millions)
Due in one year or less............... $ 175.0 $ 175.4
Due after one year through five years. 841.5 838.3
Due after five years through ten years 146.6 148.7
Due after ten years................... 26.5 26.7
-------- --------
Subtotal.............................. 1,189.6 1,189.1
Mortgage and asset backed securities.. 231.2 229.9
-------- --------
Total.......................... $1,420.8 $1,419.0
======== ========
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
The percentage of fixed maturities with a credit quality of Aaa, Aa or A was
72.6% and 73.0% at December 31, 2000 and 1999, respectively. The percentage of
fixed maturities rated Baa was 24.5% and 24.6% at December 31, 2000 and 1999,
respectively. The percentage of fixed maturities that were below Investment
Grade was 2.9% and 2.4% at December 31, 2000 and 1999, respectively. There were
no fixed maturities in or near default.
F-41
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The net change in unrealized investment gains (losses) represents the only
component of other comprehensive income generated by the AEGON Portfolio for
the years ended December 31, 2000, 1999, 1998 and prior thereto. The net change
in unrealized investment gains (losses) was $25.7 million, $(77.9) million and
$(4.0) million for the years ended December 31, 2000, 1999 and 1998,
respectively (see Note 11):
Mortgage Loans on Real Estate
Mortgage loans on real estate in the AEGON Portfolio at December 31, 2000
and 1999 consist of the following:
As of December 31,
-----------------
2000 1999
----- ------
($ in millions)
Mortgage loans............................ $50.0 $102.8
Valuation allowances...................... (2.5) (4.3)
----- ------
Mortgage loans, net of valuation allowance $47.5 $ 98.5
===== ======
An analysis of the valuation allowances with respect to the AEGON Portfolio
for 2000, 1999 and 1998 is as follows:
For the Year Ended
December 31,
-------------------
2000 1999 1998
----- ----- -----
($ in millions)
Balance, beginning of year............. $ 4.3 $16.0 $13.6
Increase (decrease) in allowance....... 0.2 (6.7) 2.9
Reduction due to pay downs and pay offs (2.0) (1.0) (0.5)
Transfers to real estate............... 0.0 (4.0) --
----- ----- -----
Balance, end of year................... $ 2.5 $ 4.3 $16.0
===== ===== =====
Impaired mortgage loans along with related valuation allowances with respect
to the AEGON Portfolio at December 31, 2000, 1999 and 1998 are as follows:
As of December 31,
--------------------
2000 1999 1998
----- ----- ------
($ in millions)
Investment in impaired mortgage loans (before valuation allowances):
Loans that have valuation allowances............................... $19.1 $34.3 $ 71.1
Loans that do not have valuation allowances........................ -- 4.4 4.4
----- ----- ------
Subtotal..................................................... 19.1 38.7 75.5
Valuation allowances................................................ (1.8) (2.7) (11.4)
----- ----- ------
Impaired mortgage loans, net of valuation allowances................ $17.3 $36.0 $ 64.1
===== ===== ======
Impaired mortgage loans that do not have valuation allowances are loans
where the net present value of the expected future cash flows related to the
loan or the fair value of the collateral equals or exceeds the recorded
investment in the loan. Such loans primarily consist of restructured loans.
During the years ended December 31, 2000 and 1999, the average recorded
investment in impaired mortgage loans with respect to the AEGON Portfolio was
approximately $26.7 million, and $50.0 million, respectively. For the years
ended December 31, 2000, 1999, and 1998 approximately $2.1 million, $2.9
million, and $4.5 million, respectively, of interest income on impaired loans
with respect to the AEGON Portfolio was earned.
F-42
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
At December 31, 2000 and 1999, there were no mortgage loans which were
non-income producing for the twelve months preceding such dates with respect to
the AEGON Portfolio.
At December 31, 2000 and 1999 the AEGON Portfolio held restructured mortgage
loans of $15.3 million and $36.0 million, respectively. Interest income of $1.6
million, $2.9 million, and $4.0 million was recognized on restructured mortgage
loans for the years ended December 31, 2000, 1999, and 1998, respectively.
Gross interest income on these loans that would have been recorded in
accordance with the original terms of such loans amounted to approximately $1.5
million, $3.9 million, and $6.9 million for the years ended December 31, 2000,
1999, and 1998, respectively.
The following table presents the maturity distribution of mortgage loans
held in the AEGON Portfolio as of December 31, 2000 ($ in millions):
December 31, 2000
----------------
Carrying % of
Value Total
-------- -----
Due in one year or less............... $13.3 28.1%
Due after one year through five years. 17.2 36.2
Due after five years through ten years 17.0 35.7
----- -----
Total.......................... $47.5 100.0%
===== =====
Total problem, potential problem and restructured commercial mortgages as a
percentage of commercial mortgages were 36.4%, 36.6% and 29.9% at December 31,
2000, 1999 and 1998, respectively. Total valuation allowances as a percentage
of problem, potential problem and restructured commercial mortgages at carrying
value before valuation allowances were 9.4%, 7.0% and 15.1% as of December 31,
2000, 1999 and 1998, respectively.
11. Investment Income, Realized and Unrealized Investment Gains (Losses), and
Comprehensive Income:
Net investment income for the years ended December 31, 2000, 1999 and 1998
was derived from the following sources:
2000 1999 1998
------ ------ ------
($ in millions)
Net Investment Income
Fixed maturities................................. $235.3 $226.1 $418.1
Equity securities................................ 239.4 194.2 53.6
Mortgage loans................................... 98.6 87.1 118.7
Real estate...................................... 19.1 34.1 44.4
Policy loans..................................... 5.1 4.4 72.5
Other investments (including cash and short-term) 22.8 14.4 23.1
------ ------ ------
Total investment income.......................... 620.3 560.3 730.4
Investment expenses.............................. 45.1 35.4 42.1
------ ------ ------
Net investment income............................ $575.2 $524.9 $688.3
====== ====== ======
F-43
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Net realized gains (losses) on investments for the years ended December 31,
2000, 1999 and 1998 are summarized as follows:
2000 1999 1998
------ ------ ------
($ in millions)
Net Realized Gains (Losses) on Investments
Fixed maturities.......................... $(11.4) $ (8.5) $ 8.3
Equity securities......................... 21.5 76.0 6.9
Mortgage loans............................ 11.7 (2.2) 5.4
Real estate............................... 23.0 52.1 127.6
Other investments assets.................. (0.3) 4.8 20.5
------ ------ ------
Net realized gains on investments......... $ 44.5 $122.2 $168.7
====== ====== ======
Following is a summary of the change in unrealized investment gains
(losses), net of related deferred income taxes and adjustment for deferred
policy acquisition costs (see Note 4), which are reflected in Accumulated Other
Comprehensive Income for the periods presented. The net change in unrealized
investment gains (losses) and the change in the Company's minimum pension
liability represent the only components of other comprehensive income for the
years ended December 31, 2000, 1999 and 1998 as presented below:
2000 1999 1998
------ ------- ------
($ in millions)
Other Comprehensive Income
Change in unrealized gains (losses):
Fixed maturities................................................... $196.7 $(458.9) $ 66.8
Equity securities.................................................. (59.9) (25.3) 24.2
Other.............................................................. 0.0 (3.6) (1.8)
------ ------- ------
Subtotal........................................................... 136.8 (487.8) 89.2
AEGON Portfolio (See Note 10)...................................... 20.6 (77.9) (4.0)
------ ------- ------
Subtotal........................................................... 157.4 (565.7) 85.2
Effect on unrealized gains (losses) on investments attributable to:
DAC.............................................................. (93.1) 241.6 (6.7)
Deferred federal income taxes.................................... (20.6) 114.1 (28.4)
Net unrealized gains and DAC transferred to the Closed Block....... 2.5 28.2 (18.7)
------ ------- ------
Change in unrealized gains (losses) on investments, net............ 46.2 (181.8) 31.4
Minimum pension liability adjustment (See Note 7).................. (3.8) -- 2.9
------ ------- ------
Other comprehensive income......................................... $ 42.4 $(181.8) $ 34.3
====== ======= ======
The following table sets forth the reclassification adjustments required for
the years ended December 31, 2000, 1999, and 1998 to avoid double-counting in
comprehensive income items that are included as part of net income for a period
that also had been part of other comprehensive income in earlier periods:
2000 1999 1998
----- ------- -----
($ in millions)
Reclassification Adjustments
Unrealized gains (losses) on investments arising during period............... $48.7 $(135.3) $39.3
Reclassification adjustment for gains included in net income................. (6.3) (46.5) (7.9)
----- ------- -----
Unrealized gains (losses) on investments, net of reclassification adjustments $42.4 $(181.8) $31.4
===== ======= =====
F-44
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Unrealized gains (losses) on investments, (excluding net unrealized gains
(losses) and DAC on assets allocated to the Closed Block), reported in the
above table for the years ended December 31, 2000, 1999 and 1998 are net of
income tax expense (benefit) of $17.2 million, $(139.2) million, and $24.1
million, respectively, and $(95.5) million, $242.0 million, and $0.8 million,
respectively, relating to the effect of such unrealized gains (losses) on DAC.
Reclassification adjustments, (excluding net unrealized gains (losses) and
DAC on assets allocated to the Closed Block), reported in the above table for
the years ended December 31, 2000, 1999 and 1998 are net of income tax expense
of $3.3 million, $25.1 million and $4.3 million, respectively, and $2.5
million, $(0.4) million and $(7.5) million, respectively, relating to the
effect of such amounts on DAC.
12. Fixed Maturity and Equity Securities:
Fixed Maturity Securities Available-for-Sale:
The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity securities available-for-sale as of December 31, 2000
and 1999 are as follows:
Gross
Amortized Unrealized Gross Unrealized Estimated
Cost Gains Losses Fair Value
----------------- ----------- ---------------- -----------------
2000 1999 2000 1999 2000 1999 2000 1999
-------- -------- ----- ----- ----- ------ -------- --------
($ in millions)
US Treasury securities and Obligations of US
Government agencies....................... $ 97.1 $ 110.1 $ 4.2 $ -- $ 0.1 $ 3.2 $ 101.2 $ 106.9
Collateralized mortgage obligations:
Government agency-backed................... 117.9 147.2 1.2 0.5 0.4 2.1 118.7 145.6
Non-agency backed.......................... 101.2 101.0 2.9 0.9 -- 2.0 104.1 99.9
Other asset-backed securities:
Government agency-backed................... 14.7 16.4 0.5 0.3 0.1 0.2 15.1 16.5
Non-agency backed.......................... 300.4 402.2 4.5 1.5 5.3 13.0 299.6 390.7
Foreign governments......................... 28.5 20.9 1.5 3.7 0.5 0.2 29.5 24.4
Utilities................................... 277.9 347.3 5.7 2.6 5.8 14.4 277.8 335.5
Corporate bonds............................. 2,201.8 1,995.5 31.6 9.4 55.4 78.4 2,178.0 1,926.5
-------- -------- ----- ----- ----- ------ -------- --------
Total bonds.......................... 3,139.5 3,140.6 52.1 18.9 67.6 113.5 3,124.0 3,046.0
Redeemable preferred stocks................. 27.4 22.4 -- -- 1.6 1.7 25.8 20.7
-------- -------- ----- ----- ----- ------ -------- --------
Total................................ $3,166.9 $3,163.0 $52.1 $18.9 $69.2 $115.2 $3,149.8 $3,066.7
======== ======== ===== ===== ===== ====== ======== ========
The carrying value of the Company's fixed maturity securities at December
31, 2000 and 1999 is net of adjustments for impairments in value deemed to be
other than temporary of $15.1 million and $16.2 million, respectively.
At December 31, 2000 and 1999, there was $0.2 million and $1.6 million,
respectively of fixed maturity securities which had been non-income producing
for the twelve months preceding such dates.
The Company classifies fixed maturity securities which (i) are in default as
to principal or interest payments, or (ii) are to be restructured pursuant to
commenced negotiations, (iii) went into bankruptcy subsequent to acquisition,
or (iv) are deemed to have other than temporary impairments to value as
"problem fixed maturity securities." At December 31, 2000 and 1999, the
carrying value of problem fixed maturities held by the Company were $42.4
million and $33.9 million, respectively. The Company defines potential problem
securities in the fixed maturity category as securities that are deemed to be
experiencing significant operating problems or difficult industry conditions.
At December 31, 2000 and 1999, the carrying value of potential problem fixed
maturities held by the Company was $2.7 million and $12.4 million,
respectively. In addition, at December 31, 2000 and 1999, the Company
F-45
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
held $0.0 million and $0.0 million of fixed maturity securities which had been
restructured. Gross interest income that would have been recorded in accordance
with the original terms of restructured fixed maturity securities amounted to
$0.0 million and $0.0 million for the years ended December 31, 2000 and 1999,
respectively. Gross interest income on these fixed maturity securities included
in net investment income aggregated $0.0 million and $0.0 million for the years
ended December 31, 2000 and 1999, respectively.
The amortized cost and estimated fair value of fixed maturity securities, by
contractual maturity dates (excluding scheduled sinking funds) as of December
31, 2000, are as follows:
2000
-------------------
Estimated
Amortized Fair
Cost Value
--------- ---------
($ in millions)
Due in one year or less............... $ 12.1 $ 12.1
Due after one year through five years. 595.2 594.2
Due after five years through ten years 1,271.2 1,264.5
Due after ten years................... 646.2 629.8
-------- --------
Subtotal....................... 2,524.7 2,500.6
Mortgage- and asset-backed securities. 642.2 649.2
-------- --------
Total.......................... $3,166.9 $3,149.8
======== ========
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
Proceeds from sales of fixed maturity securities including those in the
Closed Block during 2000, 1999 and 1998 were $441.3 million, $632.8 million and
$396.9 million, respectively. Gross gains of $7.2 million, $6.9 million, and
$10.6 million and gross losses of $16.3 million, $19.4 million, and $2.9
million were realized on these sales, respectively.
Equity Securities
The cost, gross unrealized gains and losses, and estimated fair value of
marketable and nonmarketable equity securities at December 31, 2000 and 1999
are as follows:
Gross
Gross Unrealized Unrealized Estimated Fair
Cost Gains Losses Value
------------- ---------------- ---------- --------------
2000 1999 2000 1999 2000 1999 2000 1999
------ ------ ----- ------ ---- ----- ------ ------
($ in millions)
Marketable equity securities... $ 40.1 $217.5 $ 6.7 $ 63.3 $2.2 $ 9.3 $ 44.6 $271.5
Nonmarketable equity securities 226.2 178.5 63.6 84.4 5.8 14.6 284.0 248.3
------ ------ ----- ------ ---- ----- ------ ------
$266.3 $396.0 $70.3 $147.7 $8.0 $23.9 $328.6 $519.8
====== ====== ===== ====== ==== ===== ====== ======
Proceeds from sales of equity securities during 2000, 1999 and 1998 were
$499.2 million, $302.7 million and $165.0 million, respectively. Gross gains of
$81.2 million, $90.0 million, and $24.4 million and gross losses of $57.8
million, $12.4 million, and $17.2 million were realized on these sales,
respectively.
F-46
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. Mortgage Loans On Real Estate and Real Estate:
Mortgage loans on real estate at December 31, 2000 and 1999 consist of the
following:
2000 1999
-------- --------
($ in millions)
Commercial mortgage loans.................. $ 943.6 $ 777.8
Agricultural and other loans............... 262.4 515.6
-------- --------
Total loans......................... 1,206.0 1,293.4
Less: valuation allowances................. (17.3) (23.0)
-------- --------
Mortgage loans, net of valuation allowances $1,188.7 $1,270.4
======== ========
An analysis of the valuation allowances for 2000, 1999 and 1998 is as
follows:
2000 1999 1998
----- ----- ------
($ in millions)
Balance, beginning of year............. $23.0 $23.2 $ 54.9
(Decrease)/Increase in allowance....... (5.5) 3.2 11.9
Reduction due to pay downs and pay offs (0.2) (1.2) (16.0)
Transfers to real estate............... -- (2.2) (4.0)
Transfers to the Closed Block.......... -- -- (23.6)
----- ----- ------
Balance, end of year................... $17.3 $23.0 $ 23.2
===== ===== ======
Impaired mortgage loans along with related valuation allowances as of
December 31, 2000 and 1999 were as follows:
2000 1999
------ ------
($ in millions)
Investment in impaired mortgage loans (before valuation allowances):
Loans that have valuation allowances............................... $ 61.0 $109.1
Loans that do not have valuation allowances........................ 44.5 30.1
------ ------
Subtotal..................................................... 105.5 139.2
Valuation allowances................................................ (6.5) (17.5)
------ ------
Impaired mortgage loans, net of valuation allowances................ $ 99.0 $121.7
====== ======
Impaired mortgage loans that do not have valuation allowances are loans
where the net present value of the expected future cash flows related to the
loan or the fair value of the collateral equals or exceeds the recorded
investment in the loan. Such loans primarily consist of restructured loans or
loans on which impairment writedowns were taken prior to the adoption of SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan."
During 2000 and 1999, the average recorded investment in impaired mortgage
loans was approximately $219.0 million and $262.6 million, respectively
including Closed Block mortgages. During 2000, 1999, and 1998, the Company
recognized $19.5 million, $19.8 million, and $24.2 million, respectively, of
interest income on impaired loans (see Note 20.)
At December 31, 2000 and 1999, the carrying values of mortgage loans which
were non-income producing for the twelve months preceding such dates were $13.3
million and $21.0 million, respectively.
At December 31, 2000 and 1999, the Company had restructured mortgage loans
of $68.7 million (excluding the Closed Block) and $100.1 million, respectively.
Interest income of $5.5 million, $6.3 million and $13.0 million was recognized
on restructured mortgage loans in 2000, 1999, and 1998, respectively. Gross
interest income on these loans that would have been
F-47
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
recorded in accordance with the original terms of such loans amounted to
approximately $7.5 million, $11.6 million, and $18.1 million in 2000, 1999 and
1998, respectively.
The following table summarizes the Company's real estate at December 31,
2000 and 1999:
As of December
31,
--------------
2000 1999
------ ------
($ in millions)
Real estate to be disposed of (1).......................... $196.0 $375.6
Impairment writedowns...................................... (20.2) (52.7)
Valuation allowance........................................ (4.5) (22.0)
------ ------
Carrying value of real estate to be disposed of............ $171.3 $300.9
====== ======
Real estate held for investment (2)........................ $ 51.5 $ 57.0
Impairment writedowns...................................... (10.8) (10.8)
------ ------
Carrying value of real estate held for income production... $ 40.7 $ 46.2
------ ------
Total real estate.......................................... $212.0 $347.1
====== ======
- ----------
(1)Amounts presented as of December 31, 2000 and 1999 are net of $16.6 million
and $42.1 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
(2)Amounts presented as of December 31, 2000 and 1999 are net of $5.9 million
and $5.9 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
An analysis of the valuation allowances relating to real estate classified
as to be disposed of for the years ended December 31, 2000, 1999 and 1998 is as
follows:
2000 1999 1998
------ ------ ------
($ in millions)
Balance, beginning of year........................................................................ $ 22.0 $ 30.6 $ 82.7
Increase due to transfers of properties to real estate to be disposed of during the year.......... 0.5 11.0 1.7
Increases (decreases) in valuation allowances from the end of the prior period on properties to be
disposed of..................................................................................... 0.2 1.1 5.0
Decrease as a result of transfers of valuation allowances to held for income production........... -- -- (13.5)
Decrease as a result of sale...................................................................... (18.2) (20.7) (45.3)
------ ------ ------
Balance, end of year.............................................................................. $ 4.5 $ 22.0 $ 30.6
====== ====== ======
Real estate is net of accumulated depreciation of $86.0 million and $138.6
million for 2000 and 1999, respectively, and depreciation expense recorded was
$2.2 million, $8.5 million and $26.6 million for the years ended December 31,
2000, 1999 and 1998, respectively.
At December 31, 2000 and 1999, the carrying value of real estate which was
non-income producing for the twelve months preceding such dates was $14.9
million and $16.9 million, respectively. Approximately 57.7% of such real
estate at December 31, 2000 consisted of land and the balance consisted of
vacant buildings.
The carrying value of impaired real estate as of December 31, 2000 and 1999
was $29.4 million and $84.2 million, respectively. The depreciated cost of such
real estate as of December 31, 2000 and 1999 was $60.4 million and $147.7
million before impairment writedowns of $31.0 million and $63.5 million,
respectively. The aforementioned impairments occurred primarily as a result of
low occupancy levels and other market related factors. Losses recorded during
2000, 1999, and 1998 related to impaired real estate aggregated $0.0 million,
$0.0 million, and $5.9 million, respectively, and are included as a component
of net realized gains on investments. Substantially all impaired real estate is
allocated to the Protection Products segment.
F-48
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. Estimated Fair Value of Financial Instruments:
The estimated fair values of the Company's financial instruments approximate
their carrying amounts except for long-term debt as described below. The
methods and assumptions utilized in estimating the fair values of the Company's
financial instruments are summarized as follows:
Fixed Maturities and Equity Securities
The estimated fair values of fixed maturity securities are based upon quoted
market prices, where available. The fair values of fixed maturity securities
not actively traded and other non-publicly traded securities are estimated
using values obtained from independent pricing services or, in the case of
private placements, by discounting expected future cash flows using a current
market interest rate commensurate with the credit quality and term of the
investments. Equity securities primarily consist of investments in common
stocks and limited partnership interests. The fair values of the Company's
investment in common stocks are determined based on quoted market prices, where
available. The fair value of the Company's investments in limited partnership
interests are based on amounts reported by such partnerships to the Company.
Mortgage Loans
The fair values of mortgage loans are estimated by discounting expected
future cash flows, using current interest rates for similar loans to borrowers
with similar credit risk. Loans with similar characteristics are aggregated for
purposes of the calculations. The fair value of mortgages in process of
foreclosure is the estimated fair value of the underlying collateral.
Policy Loans
Policy loans are an integral component of insurance contracts and have no
maturity dates. Management has determined that it is not practicable to
estimate the fair value of policy loans.
Long-term Debt
The fair value of long-term debt at December 31, 2000 was $603.3 million and
is determined based on contractual cash flows discounted at market rates. The
estimated fair values for non-recourse mortgage debt are determined by
discounting contractual cash flows at a rate which takes into account the level
of current market interest rates and collateral risk.
Separate Account Assets and Liabilities
The estimated fair value of assets held in Separate Accounts is based on
quoted market prices. The fair value of liabilities related to Separate
Accounts is the amount payable on demand, which includes surrender charges.
Investment-Type Contracts
The fair values of annuities are based on estimates of the value of payments
available upon full surrender. The fair values of the Company's liabilities
under guaranteed investment contracts are estimated by discounting expected
cash outflows using interest rates currently offered for similar contracts with
maturities consistent with those remaining for the contracts being valued.
15. Reinsurance:
Life insurance business is primarily ceded on a yearly renewable term basis
under various reinsurance contracts except for the level term product which
utilizes a coinsurance agreement. The Company's general practice is to retain
no more than $4.0 million of risk on any one person for individual products and
$6.0 million for last survivor products.
F-49
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company has entered into coinsurance agreements with other insurers
related to a portion of its extended term insurance, guaranteed interest
contract and long-term disability claim liabilities and reinsures approximately
50% of its block of paid-up life insurance policies.
The following table summarizes the effect of reinsurance for the years
indicated:
2000 1999 1998
------ ------ -------
($ in millions)
Direct premiums (includes $70.9, $74.4 and $78.4 of accident and health premiums for 2000,
1999, and 1998, respectively).............................................................. $204.4 $181.6 $ 728.7
Reinsurance assumed.......................................................................... 5.3 5.0 5.3
Reinsurance ceded (includes $(70.4), $(73.8), and $(78.2) of accident and health premiums for
2000, 1999, and 1998, respectively)........................................................ (91.6) (90.3) (112.3)
------ ------ -------
Net premiums (1)............................................................................. $118.1 $ 96.3 $ 621.7
====== ====== =======
Universal life and investment type product policy fee income ceded........................... $ 23.1 $ 14.4 $ 8.9
====== ====== =======
Policyholders' benefits ceded (2)............................................................ $ 79.2 $ 82.2 $ 107.3
====== ====== =======
Interest credited to policyholders' account balances ceded................................... $ 3.6 $ 4.5 $ 6.5
====== ====== =======
- ----------
(1)Excludes Closed Block direct premiums of $601.6 and $639.9 and reinsurance
ceded of $19.2 and $19.0 at December 31, 2000 and 1999, respectively.
(2)Excludes $28.7 million of Closed Block benefits ceded at December 31, 2000.
The Company is contingently liable with respect to ceded insurance should
any reinsurer be unable to meet its obligations under these agreements. To
limit the possibility of such losses, the Company evaluates the financial
condition of its reinsurers and monitors concentration of credit risk.
16. Debt:
The Company's debt at December 31, 2000 and 1999 consists of the following:
2000 1999
------ ------
($ in millions)
Surplus notes.............................................. $ 2.0 $240.0
Real estate mortgage encumbrances.......................... 52.3 58.8
Senior Notes............................................... 569.1 --
------ ------
$623.4 $298.8
====== ======
Surplus Notes
On December 31, 1997, the Company issued the MONY Notes in connection with
the Investment Agreement (see Note 2). The MONY Notes have a face amount of
$115.0 million, a coupon rate of interest of 9.5% per annum, and mature on
December 30, 2012. Interest on the MONY Notes is payable semi-annually and
principal is payable at maturity. Payment of interest on the MONY Notes may
only be made upon the prior approval of the New York State Superintendent of
Insurance. For each of the years in the period ended December 31, 2000, 1999
and 1998, the Company recorded interest expense of $2.1 million, $10.9 million
and $10.9 million related the MONY Notes, respectively.
On August 15, 1994, the Company issued Surplus Notes due August 15, 2024
with a face amount of $125.0 million. The notes were issued at a discount of
approximately 42.1% from the principal amount payable at maturity, resulting in
net proceeds after
F-50
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
issuance expenses of approximately $70.0 million. The amount of such original
issue discount represents a yield of 11.25% per annum for the period from
August 15, 1994 until August 15, 1999. Interest on the notes did not accrue
until August 15, 1999; thereafter, interest on the notes is scheduled to be
paid on February 15 and August 15 of each year, commencing February 15, 2000,
at a rate of 11.25% per annum. The Company amortizes the discount using the
interest method. The Company recorded interest expense (including discount
accretion) of $3.1 million, $13.5 million and $12.1 million for the years ended
December 31, 2000, 1999 and 1998, respectively.
Payment of interest on the Surplus Notes may only be made upon the prior
approval of the New York State Superintendent of Insurance.
On January 12, 2000, the Holding Company filed a registration statement on
Form S-3 with the Securities and Exchange Commission (the "SEC") to register
certain securities. This registration, known as a "Shelf Registration",
provides the Company with the ability to offer various securities to the
public, when it deems appropriate, to raise proceeds up to an amount not to
exceed $1.0 billion in the aggregate for all issuances of securities
thereunder. It is the intention of the Company to use this facility to raise
proceeds for mergers and acquisitions and for other general corporate matters,
as it considers necessary.
On March 8, 2000, the Holding Company issued $300.0 million principal amount
of senior notes (the "$300 million Senior Notes") pursuant to the
aforementioned Shelf Registration. The $300 million Senior Notes mature on
March 15, 2010 and bear interest at 8.35% per annum. The principal amount of
the $300 million Senior Notes is payable at maturity and interest is payable
semi-annually. The net proceeds to the Company from the issuance of the $300
million Senior Notes, after deducting underwriting commissions and other
expenses (primarily legal and accounting fees), were approximately $296.6
million. Approximately $280.0 million of the net proceeds from the issuance of
the Senior Notes was used by the Holding Company to finance the repurchase, on
March 8, 2000, by MONY Life of all of its outstanding $115.0 million face
amount 9.5% coupon surplus notes, and $116.5 million face amount of its $125.0
million face amount 11.25% coupon surplus notes (hereafter referred to as the
"9.5% Notes" and "11.25% Notes", respectively), which were outstanding at
December 31, 1999. The balance of the net proceeds from the issuance of the
Senior Notes was retained by the Holding Company for general corporate
purposes. In the third quarter of 2000, the Company repurchased another $6.5
million face amount of the 11.25% notes.
To finance MONY Life's repurchase of the 9.5% Notes and the 11.25% Notes,
the Holding Company, on March 8, 2000: (i) purchased two surplus notes from
MONY Life (hereafter referred to as the "Inter-company Surplus Notes") to
replace the 9.5% Notes and the 11.25% Notes. The terms of the Inter-company
Surplus Notes are identical to the 9.5% Notes and the 11.25% notes, except that
the Inter-company Surplus Notes were priced to yield a current market rate of
interest and the inter-company surplus note issued to replace the $116.5
million face amount of the 11.25% Notes was issued at a face amount of $100.0
million and (ii) contributed capital to MONY Life in the amount of $65.0
million.
As a result of the repurchase of the 9.5% Notes and substantially all of the
11.25% Notes, the Company recorded a pre-tax tax loss of $58.1 million ($37.7
million after tax) during 2000. The loss resulted from the premium paid by MONY
Life to the holders of the 9.5% Notes and the 11.25% Notes reflecting the
excess of their fair value over their carrying value on the Company's books at
the date of the transaction of approximately $7.0 million and $51.1 million,
respectively. This loss is reported, net of tax, as an extraordinary item on
the Company's income statement for the year ended December 31, 2000.
On December 7, 2000, The MONY Group Inc. issued $275 million principal
amount of senior notes (the "$275 million Senior Notes") pursuant to the
aforementioned Shelf Registration. The $275 million Senior Notes mature on
December 15, 2005 and bear interest at 7.45% per annum. The principal amount of
the $275 million Senior Notes is payable at maturity and interest is payable
semi-annually. The net proceeds, after deducting underwriting commissions and
other expenses were used to fund the acquisition of Advest. See Note 4 --
Extraordinary Items.
F-51
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Real Estate Mortgage Encumbrances
The Company has one mortgage loan on one of its estate properties. The
interest rates in this loan is 8.85% and the loan matures in June 2001, with
the option to extend the maturity. For the years ended December 31, 2000, 1999
and 1998, interest expense on mortgage loans aggregated $5.3 million, $5.0
million, and $9.0 million, respectively.
Other
During 1989, the Company entered into a transaction which is accounted for
as a financing arrangement involving certain real estate properties held for
investment. Pursuant to the terms of the agreement, the Company effectively
pledged the real estate properties as collateral for a loan of approximately
$35.0 million bearing simple interest at a rate of 8% per annum. The remaining
obligation of $44.1 was paid in full on December 1, 1999. Interest expense on
the obligation of $0.0 million, $3.4 million and $3.1 million, is reflected in
Other Operating Costs and Expenses on the statements of income for the years
ended December 31, 2000, 1999 and 1998 respectively.
In 1988, the Company financed one of its real estate properties under a
sales/leaseback arrangement. The facility was sold for $66.0 million, $56.0
million of which was in the form of an interest bearing note receivable and
$10.0 million in cash. The note was originally due January 1, 2009, however, on
December 1, 1999, the remaining balance of the interest bearing note of $44.2
was paid in full as part of the sale of the property to a third party. The
transaction continues to be accounted for as a sale/leaseback arrangement, with
the proceeds received from the sale, amortized into income over the life of the
lease. The lease has a term of 20 years beginning December 21, 1988 and
requires minimum annual rental payments of $7.4 million in 2001, $7.6 million
in 2002, $7.7 million in 2003, $7.9 million in 2004, $8.0 million in 2005 and
$25.1 million for 2006 and thereafter. The Company has the option to renew the
lease at the end of the lease term.
Aggregate contractual debt service payments on the Company's debt at
December 31, 2000 for 2001 and the succeeding four years are $46.6 million,
$45.8 million, $45.8 million, $45.8 million and $320.8 million, respectively,
and $417.4 million thereafter.
17. Off-Balance Sheet Risk and Concentration of Credit Risk:
Financial Instruments with Off-Balance Sheet Risk:
Pursuant to a securities lending agreement with a major financial
institution, the Company from time to time lends securities to approved
borrowers. At December 31, 2000 and 1999, securities loaned by the Company
under this agreement had a fair value of approximately $160.9 million and $61.5
million, respectively. The minimum collateral on securities loaned is 102
percent of the market value of the loaned securities. Such securities are
marked to market on a daily basis and the collateral is correspondingly
increased or decreased.
Concentration of Credit Risk:
At December 31, 2000 and 1999, the Company had no single investment or
series of investments with a single issuer (excluding U.S. Treasury securities
and obligations of U.S. government agencies) exceeding 1.0% and 0.5%,
respectively, of total cash and invested assets.
The Company's fixed maturity securities are diversified by industry type.
The industries that comprise 10% or more of the carrying value of the fixed
maturity securities at December 31, 2000 are Consumer goods of $555.5 million
(17.6%), Non-Government Asset/Mortgage Backed of $470.1 million (14.9%), and
Public Utilities of $325.4 million (10.3%).
At December 31, 1999 the industries that comprise 10% or more of the
carrying value of the fixed maturity securities were Non-Government
Asset/Mortgage-Backed of $490.6 million (16.0%), Consumer Goods and Services of
$462.0 million (15.1%), Public Utilities of $335.5 million (10.9%), Other
Manufacturing of $305.4 million (10.0%).
F-52
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Company holds below investment grade fixed maturity securities with a
carrying value of $390.7 million at December 31, 2000. These investments
consist mostly of privately issued bonds which are monitored by the Company
through extensive internal analysis of the financial condition of the issuers
and which generally include protective debt covenants. At December 31, 1999,
the carrying value of the Company's investments in below investment grade fixed
maturity securities amounted to $308.3 million.
The Company has significant investments in commercial and agricultural
mortgage loans and real estate (including joint ventures and partnerships). The
locations of property collateralizing mortgage loans and real estate investment
carrying values at December 31, 2000 and 1999 are as follows:
2000 1999
-------------- --------------
($ in millions)
Geographic Region
Mountain......... $ 331.5 23.7% $ 319.7 19.8%
Southeast........ 281.1 20.0 307.3 19.0
Midwest.......... 250.9 17.9 290.4 17.9
West............. 249.5 17.8 323.3 20.0
Northeast........ 208.6 14.9 234.7 14.5
Southwest........ 79.1 5.7 142.1 8.8
-------- ----- -------- -----
Total..... $1,400.7 100.0% $1,617.5 100.0%
======== ===== ======== =====
F-53
APPENDIX A
DEATH BENEFIT PERCENTAGE FOR
GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST
Attained Age Applicable Percentage
- ------------ ---------------------
40 and Under............................................... 250%
41......................................................... 243
42......................................................... 236
43......................................................... 229
44......................................................... 222
45......................................................... 215
46......................................................... 209
47......................................................... 203
48......................................................... 197
49......................................................... 191
50......................................................... 185
51......................................................... 178
52......................................................... 171
53......................................................... 164
54......................................................... 157
55......................................................... 150
56......................................................... 146
57......................................................... 142
58......................................................... 138
59......................................................... 134
60......................................................... 130
61......................................................... 128
62......................................................... 126
63......................................................... 124
64......................................................... 122
65......................................................... 120
66......................................................... 119
67......................................................... 118
68......................................................... 117
69......................................................... 116
70......................................................... 115
71......................................................... 113
72......................................................... 111
73......................................................... 109
74......................................................... 107
75-90...................................................... 105
91......................................................... 104
92......................................................... 103
93......................................................... 102
94-100..................................................... 101
A-1
APPENDIX B
MONTHLY PER $1,000 SPECIFIED AMOUNT FACTORS
Factor
Issue Age Per $1,000
- --------- ----------
0-36....................................................... $0.06
37-50...................................................... 0.07
51......................................................... 0.08
52......................................................... 0.08
53......................................................... 0.09
54......................................................... 0.09
55......................................................... 0.10
56......................................................... 0.10
57......................................................... 0.10
58......................................................... 0.11
59......................................................... 0.11
60......................................................... 0.11
61......................................................... 0.11
62......................................................... 0.11
63......................................................... 0.11
64......................................................... 0.11
65......................................................... 0.11
66......................................................... 0.11
67......................................................... 0.12
68......................................................... 0.13
69......................................................... 0.13
70......................................................... 0.13
71......................................................... 0.13
72......................................................... 0.13
73......................................................... 0.14
74......................................................... 0.14
75......................................................... 0.14
76......................................................... 0.14
77......................................................... 0.15
78......................................................... 0.16
79......................................................... 0.16
80......................................................... 0.17
81......................................................... 0.19
82......................................................... 0.21
83......................................................... 0.22
84......................................................... 0.24
85......................................................... 0.26
B-1
APPENDIX C
ILLUSTRATIONS OF DEATH PROCEEDS, FUND VALUES AND
CASH VALUES, AND PREMIUM OUTLAYS
The following tables illustrate how the key financial elements of the Policy
work, specifically, how the death benefits, Fund Values and Cash Values could
vary over an extended period of time. In addition, each table compares these
values with premiums paid accumulated with interest.
The Policies illustrated include the following:
Benefit Specified See
Sex Age Underwriting Class Option Amount Page
- --- --- -------------------- ------- --------- ----
Male......................... 45 Preferred Non-smoker 1 $200,000 C-4
Male......................... 45 Preferred Non-smoker 2 $200,000 C-15
Female....................... 45 Preferred Non-smoker 1 $200,000 C-25
Female....................... 45 Preferred Non-smoker 2 $200,000 C-35
The tables show how Death Proceeds, Fund Values and Cash Values of a
hypothetical Policy could vary over an extended period of time if the
Subaccounts of the Variable Account had constant hypothetical gross annual
investment returns of 0%, 6% or 12% over the periods indicated in each table.
The values will differ from those shown in the tables if the annual investment
returns are not absolutely constant. That is, the death benefits, Fund Values
and Cash Values will be different if the returns averaged 0%, 6% or 12% over a
period of years but went above or below those figures in individual Policy
years. These illustrations assume that no Policy Loan has been taken. The
amounts shown would differ if unisex rates were used.
The amounts shown for Death Proceeds, Fund Values and Cash Values reflect
the fact the net investment return on the Policy is lower than the gross
investment return on the Subaccounts of the Variable Account. This results from
the charges levied against the Subaccounts of the Variable Account (i.e., the
mortality and expense risk charge) as well as the premium loads, administrative
charges and Surrender Charges. The difference between the Fund Value and the
Cash Value in the first 14 years is the Surrender Charge.
The tables illustrate cost of insurance and expense charges at both current
rates (which are described under Cost of Insurance, page 45) and at the maximum
rates guaranteed in the Policies. The amounts shown at the end of each Policy
year reflect a daily charge against the Funds as well as those assessed against
the Subaccounts. These charges include the charge against the Subaccounts for
mortality and expense risks and the effect on each Subaccount's investment
experience of the charge to Portfolio assets for investment management and
direct expenses. The mortality and expense risk fee is .35% annually on a
guaranteed basis.
The tables also reflect a deduction for a daily investment advisory fee and
for other expenses of the Portfolio at a rate equivalent to an annual rate of
0.93% of the aggregate average daily net assets of the Portfolio. This
hypothetical rate is representative of the average maximum investment advisory
fee and other expenses of the Portfolios applicable to the Subaccounts of the
Variable Account. Actual fees and other expenses vary by Portfolio and may be
subject to agreements by the sponsor to waive or otherwise reimburse each
Portfolio for operating expenses which exceed certain limits. For a detailed
description of actual expenses and expense reimbursements, see pages 4-5 of the
prospectus. There can be no assurance that the expense reimbursement
arrangements will continue in the future, and any unreimbursed expenses would
be reflected in the values included on the tables.
The effect of these investment management, direct expenses and mortality and
expense risk charges on a 0% gross rate of return would result in a net rate of
return of -.93%, on 6% it would be 5.07%, and on 12% it would be 11.07%.
The tables assume the deduction of charges including administrative and
sales charges. For each age, there are tables for death benefit Options 1 and 2
and each option is illustrated using current and guaranteed policy cost
factors. The tables
C-1
reflect the fact that the Company does not currently make any charge against
the Variable Account for state or federal taxes. If such a charge is made in
the future, it will take a higher rate of return to produce after-tax returns
of 0%, 6% or 12%.
The following are descriptions of Table columns and key terms:
Age: Insured's attained age at the end of the policy year
Premium Outlay: The annualized out-of-pocket premium payments for each
policy year including scheduled and any anticipated unscheduled premium
payments. Premium payments are assumed to be paid at the beginning of each
premium paying period. Amounts of surrenders and loans plus loan interest if
any, are shown on the pages captioned "Premiums, Surrenders and Loans".
Premium Accumulated at 5%: is equal to the premiums compounded at an annual
effective rate of 5% and is shown at the end of the year.
Guaranteed Charges at 0.00%, 6.00% or 12.00%
Cash Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds,
less all charges, fees and deductions at their guaranteed maximum. The cash
value also takes into account any loans illustrated, as well as, the applicable
surrender charges that would apply if the policy were surrendered prior to the
end of the first fourteen years.
Fund Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds,
less all charges, fees and deductions at their guaranteed maximum. The Fund
Value DOES NOT take into account the applicable surrender charges that would
apply if the policy were surrendered prior to the end of the first fourteen
years.
Death Proceeds: The benefit payable if the insured's death occurs at the end
of the policy year, assuming a 0.00%, 6.00% or 12.00% hypothetical rate of
return on the Funds, less all charges, fees and deductions at their guaranteed
maximums.
Current charges at 0.00%, 6.00% or 12.00%
Cash Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds,
less all charges, fees and deductions at the current, non-guaranteed rates. The
cash value also takes into account any loans illustrated, as well as, the
applicable surrender charges that would apply if the policy were surrendered
prior to the end of the first fourteen years.
Fund Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds,
less all charges, fees and deductions at the current, non-guaranteed rates. The
Fund Value DOES NOT take into account the applicable surrender charges that
would apply if the policy were surrendered prior to the end of the first
fourteen years.
Death Proceeds: The benefit payable if the insured's death occurs at the end
of the policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of
return on the Funds, less all charges, fees and deductions at the current,
non-guaranteed rates.
The Company will furnish, upon request, a comparable illustration based on
the age and sex of the proposed Insured, standard Premium Class assumptions and
an initial Specified Amount and Scheduled Premium Payments of the applicant's
choice. If a Policy is purchased, an individualized illustration will be
delivered reflecting the Scheduled Premium Payment chosen and the Insured's
actual risk class. After issuance, the Company will provide upon request an
illustration of future Policy benefits based on both guaranteed and current
cost factor assumptions and actual Account Value.
The following is the page of supplemental footnotes to each of the flexible
premium variable life to age 100 numeric summary and standard ledger statements
which follow and which begin on page C-4.
C-2
STANDARD LEDGER STATEMENT -- SUPPLEMENTAL FOOTNOTE PAGE
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
MONY Life Insurance Company
Additional Information
This policy has been tested for the possibility of classification as a
modified endowment. This test is not a guarantee that a policy will not be
classified as a modified endowment.
This illustration has been checked against federal tax laws relating to
their definition of life insurance and is in compliance based on proposed
premium payments and coverages. Any decrease in specified amount and/or a
change in death benefit option 2 to death benefit option 1 and/or surrenders
occurring in the first 15 years may cause a taxable event. In addition, if the
policy is defined as a modified endowment policy, a loan, surrender, or
assignment or pledge (unless such assignment or pledge is for burial expenses
and the maximum death benefit is not in excess of $25,000) may be considered a
taxable distribution and a ten percent penalty may be added to any tax on the
distribution. Please consult your tax advisor for advice.
GUIDELINE PREMIUMS
Initial Initial
Death Guideline Guideline
Benefit Specified Single Annual
Sex Age Underwriting Class Option Amount Premium Premium
--- --- --------------------- ------- --------- ---------- ----------
Male 45 Preferred, Non-Smoker 1 $200,000 $46,086.86 $ 3,814.80
Male 45 Preferred, Non-Smoker 2 $200,000 $46,086.86 $12,307.35
Female 45 Preferred, Non-Smoker 1 $200,000 $39,445.19 $ 3,204.78
Female 45 Preferred, Non-Smoker 2 $200,000 $39,445.19 $10,426.48
Values shown on this illustration are based on a policyowner tax bracket of
0%.
Premiums are assumed to be paid at the beginning of the payment period.
Policy values and ages are shown as of the end of the policy year and reflect
the effect of all loans and surrenders. The death proceeds, fund value and
value upon surrender will differ if premiums are paid in different amounts,
frequencies, or not on the due date.
The policy's cash value is net of any applicable surrender charge.
Premiums less the following deductions are added to the fund value:
1. A premium tax charge of .80% of gross premiums in all policy years.
2. A sales charge on the gross premiums. The sales charges equal 4% of each
premium dollar paid for amounts less than $500,000 for Policy Years 1-10
(1% for Policy Years 11 and later) and 2% for total amounts of $500,000
or more for Policy Years 1-10 (0.5% for Policy Years 11 and later).
3. A DAC tax charge of 1.25%of gross premiums in all policy years. No
charge will be deducted where premiums received are not subject to this
tax.
For the first year, those columns assuming guaranteed charges use the
current monthly mortality charges, current monthly administrative charges,
current charges for mortality and expense risks, current charges for rider
benefits, if any, and current premium sales charge as well as the assumed
hypothetical gross annual investment return indicated. Thereafter these columns
use guaranteed monthly mortality charges, guaranteed monthly administrative
charges, guaranteed charges for mortality and expense risks, guaranteed charges
for rider benefits if any, guaranteed maximum premium sales charge, and the
assumed hypothetical gross annual investment return indicated. Those columns
assuming current charges are based upon "current charges" and the assumed
hypothetical gross annual investment return indicated.
The current charges declared by MONY Life Insurance Company are guaranteed
for the first policy year and apply to policies issued as of the illustration
preparation date and could change between the preparation date and the date the
policy is issued. After the first policy year, current charges are not
guaranteed, and may be changed at the discretion of MONY Life Insurance Company.
C-3
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,918 200,000 0 1,918 200,000 0 1,918 200,000
5 2,598 5,596 7,155 200,000 5,596 7,155 200,000 7,244 8,803 200,000
10 2,598 10,587 11,496 200,000 10,587 11,496 200,000 15,696 16,605 200,000
20 2,598 9,117 9,117 200,000 9,117 9,117 200,000 25,566 25,566 200,000
@ Age 70 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 22,441 22,441 200,000
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
***Policy lapses in policy year 33 based on current charges and a gross
investment return of 0.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-4
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,918 200,000 0 1,918 200,000 0 1,918 200,000
2 47 2,598 1,396 3,344 200,000 1,396 3,344 200,000 1,791 3,740 200,000
3 48 2,598 2,865 4,683 200,000 2,865 4,683 200,000 3,647 5,466 200,000
4 49 2,598 4,272 5,961 200,000 4,272 5,961 200,000 5,457 7,146 200,000
5 50 2,598 5,596 7,155 200,000 5,596 7,155 200,000 7,244 8,803 200,000
6 51 2,598 6,817 8,246 200,000 6,817 8,246 200,000 9,009 10,438 200,000
7 52 2,598 7,935 9,234 200,000 7,935 9,234 200,000 10,751 12,050 200,000
8 53 2,598 8,954 10,123 200,000 8,954 10,123 200,000 12,449 13,618 200,000
9 54 2,598 9,829 10,869 200,000 9,829 10,869 200,000 14,105 15,144 200,000
10 55 2,598 10,587 11,496 200,000 10,587 11,496 200,000 15,696 16,605 200,000
11 56 2,598 11,428 12,208 200,000 11,428 12,208 200,000 17,448 18,227 200,000
12 57 2,598 12,239 12,759 200,000 12,239 12,759 200,000 19,223 19,743 200,000
13 58 2,598 12,891 13,151 200,000 12,891 13,151 200,000 20,874 21,134 200,000
14 59 2,598 13,213 13,343 200,000 13,213 13,343 200,000 22,232 22,362 200,000
15 60 2,598 13,335 13,335 200,000 13,335 13,335 200,000 23,388 23,388 200,000
16 61 2,598 13,084 13,084 200,000 13,084 13,084 200,000 24,218 24,218 200,000
17 62 2,598 12,590 12,590 200,000 12,590 12,590 200,000 24,854 24,854 200,000
18 63 2,598 11,785 11,785 200,000 11,785 11,785 200,000 25,279 25,279 200,000
19 64 2,598 10,644 10,644 200,000 10,644 10,644 200,000 25,516 25,516 200,000
20 65 2,598 9,117 9,117 200,000 9,117 9,117 200,000 25,566 25,566 200,000
21 66 2,598 7,151 7,151 200,000 7,151 7,151 200,000 25,430 25,430 200,000
22 67 2,598 4,710 4,710 200,000 4,710 4,710 200,000 25,046 25,046 200,000
23 68 2,598 1,731 1,731 200,000 1,731 1,731 200,000 24,415 24,415 200,000
24 69 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 23,554 23,554 200,000
25 70 2,598 22,441 22,441 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-5
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 21,030 21,030 200,000
27 72 2,598 19,378 19,378 200,000
28 73 2,598 17,373 17,373 200,000
29 74 2,598 14,938 14,938 200,000
30 75 2,598 12,014 12,014 200,000
31 76 2,598 8,557 8,557 200,000
32 77 2,598 4,495 4,495 200,000
33 78 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-6
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ------------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,918 200,000 100 2,048 200,000 100 2,048 200,000
5 2,598 5,596 7,155 200,000 7,238 8,797 200,000 9,082 10,641 200,000
10 2,598 10,587 11,496 200,000 16,236 17,146 200,000 22,570 23,479 200,000
20 2,598 9,117 9,117 200,000 29,865 29,865 200,000 54,856 54,856 200,000
@ Age 70 2,598 LAPSED LAPSED LAPSED 24,921 24,921 200,000 70,462 70,462 200,000
@ Age 85 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 108,197 108,197 200,000
@ Age 90 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 101,711 101,711 200,000
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 6.00%.
***Policy lapses in policy year 53 based on current charges and a gross
investment return of 6.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-7
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,918 200,000 100 2,048 200,000 100 2,048 200,000
2 47 2,598 1,396 3,344 200,000 1,761 3,710 200,000 2,169 4,118 200,000
3 48 2,598 2,865 4,683 200,000 3,561 5,379 200,000 4,392 6,210 200,000
4 49 2,598 4,272 5,961 200,000 5,393 7,082 200,000 6,687 8,376 200,000
5 50 2,598 5,596 7,155 200,000 7,238 8,797 200,000 9,082 10,641 200,000
6 51 2,598 6,817 8,246 200,000 9,074 10,503 200,000 11,582 13,011 200,000
7 52 2,598 7,935 9,234 200,000 10,901 12,200 200,000 14,191 15,490 200,000
8 53 2,598 8,954 10,123 200,000 12,723 13,892 200,000 16,892 18,062 200,000
9 54 2,598 9,829 10,869 200,000 14,494 15,533 200,000 19,691 20,730 200,000
10 55 2,598 10,587 11,496 200,000 16,236 17,146 200,000 22,570 23,479 200,000
11 56 2,598 11,428 12,208 200,000 18,162 18,941 200,000 25,767 26,546 200,000
12 57 2,598 12,239 12,759 200,000 20,158 20,677 200,000 29,154 29,674 200,000
13 58 2,598 12,891 13,151 200,000 22,094 22,354 200,000 32,588 32,848 200,000
14 59 2,598 13,213 13,343 200,000 23,797 23,927 200,000 35,904 36,034 200,000
15 60 2,598 13,335 13,335 200,000 25,395 25,395 200,000 39,198 39,198 200,000
16 61 2,598 13,084 13,084 200,000 26,713 26,713 200,000 42,347 42,347 200,000
17 62 2,598 12,590 12,590 200,000 27,875 27,875 200,000 45,486 45,486 200,000
18 63 2,598 11,785 11,785 200,000 28,813 28,813 200,000 48,604 48,604 200,000
19 64 2,598 10,644 10,644 200,000 29,495 29,495 200,000 51,725 51,725 200,000
20 65 2,598 9,117 9,117 200,000 29,865 29,865 200,000 54,856 54,856 200,000
21 66 2,598 7,151 7,151 200,000 29,864 29,864 200,000 58,005 58,005 200,000
22 67 2,598 4,710 4,710 200,000 29,445 29,445 200,000 61,129 61,129 200,000
23 68 2,598 1,731 1,731 200,000 28,535 28,535 200,000 64,235 64,235 200,000
24 69 2,598 LAPSED LAPSED LAPSED 27,073 27,073 200,000 67,349 67,349 200,000
25 70 2,598 24,921 24,921 200,000 70,462 70,462 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-8
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
------------------------------------------- ------------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 21,946 21,946 200,000 73,553 73,553 200,000
27 72 2,598 17,968 17,968 200,000 76,676 76,676 200,000
28 73 2,598 12,728 12,728 200,000 79,769 79,769 200,000
29 74 2,598 5,938 5,938 200,000 82,798 82,798 200,000
30 75 2,598 LAPSED LAPSED LAPSED 85,745 85,745 200,000
31 76 2,598 88,604 88,604 200,000
32 77 2,598 91,359 91,359 200,000
33 78 2,598 93,977 93,977 200,000
34 79 2,598 96,440 96,440 200,000
35 80 2,598 98,726 98,726 200,000
36 81 2,598 101,146 101,146 200,000
37 82 2,598 103,380 103,380 200,000
38 83 2,598 105,404 105,404 200,000
39 84 2,598 107,043 107,043 200,000
40 85 2,598 108,197 108,197 200,000
41 86 2,598 108,770 108,770 200,000
42 87 2,598 108,621 108,621 200,000
43 88 2,598 107,513 107,513 200,000
44 89 2,598 105,310 105,310 200,000
45 90 2,598 101,711 101,711 200,000
46 91 2,598 96,608 96,608 200,000
47 92 2,598 90,291 90,291 200,000
48 93 2,598 81,462 81,462 200,000
49 94 2,598 69,543 69,543 200,000
50 95 2,598 53,572 53,572 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-9
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
51 96 2,598 33,604 33,604 200,000
52 97 2,598 7,619 7,619 200,000
53 98 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-10
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,918 200,000 230 2,179 200,000 230 2,179 200,000
5 2,598 5,596 7,155 200,000 9,184 10,743 200,000 11,244 12,802 200,000
10 2,598 10,587 11,496 200,000 24,579 25,488 200,000 32,485 33,394 200,000
20 2,598 9,117 9,117 200,000 80,960 80,960 200,000 120,659 120,659 200,000
@ Age 70 2,598 LAPSED LAPSED LAPSED 132,581 132,581 200,000 209,669 209,669 243,216
@ Age 85 2,598 LAPSED LAPSED LAPSED 614,942 614,942 645,689 975,559 975,559 1,024,336
@ Age 90 2,598 LAPSED LAPSED LAPSED 975,987 975,987 1,024,787 1,579,177 1,579,177 1,658,136
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
***Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-11
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
----------------------------------------------- ------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,918 200,000 230 2,179 200,000 230 2,179 200,000
2 47 2,598 1,396 3,344 200,000 2,143 4,092 200,000 2,563 4,512 200,000
3 48 2,598 2,865 4,683 200,000 4,319 6,138 200,000 5,199 7,018 200,000
4 49 2,598 4,272 5,961 200,000 6,668 8,356 200,000 8,076 9,765 200,000
5 50 2,598 5,596 7,155 200,000 9,184 10,743 200,000 11,244 12,802 200,000
6 51 2,598 6,817 8,246 200,000 11,866 13,295 200,000 14,733 16,162 200,000
7 52 2,598 7,935 9,234 200,000 14,734 16,033 200,000 18,578 19,877 200,000
8 53 2,598 8,954 10,123 200,000 17,810 18,979 200,000 22,794 23,963 200,000
9 54 2,598 9,829 10,869 200,000 21,075 22,115 200,000 27,422 28,461 200,000
10 55 2,598 10,587 11,496 200,000 24,579 25,488 200,000 32,485 33,394 200,000
11 56 2,598 11,428 12,208 200,000 28,572 29,351 200,000 38,274 39,054 200,000
12 57 2,598 12,239 12,759 200,000 32,982 33,501 200,000 44,720 45,239 200,000
13 58 2,598 12,891 13,151 200,000 37,719 37,978 200,000 51,734 51,994 200,000
14 59 2,598 13,213 13,343 200,000 42,658 42,788 200,000 59,221 59,351 200,000
15 60 2,598 13,335 13,335 200,000 47,979 47,979 200,000 67,356 67,356 200,000
16 61 2,598 13,084 13,084 200,000 53,570 53,570 200,000 76,097 76,097 200,000
17 62 2,598 12,590 12,590 200,000 59,625 59,625 200,000 85,678 85,678 200,000
18 63 2,598 11,785 11,785 200,000 66,165 66,165 200,000 96,200 96,200 200,000
19 64 2,598 10,644 10,644 200,000 73,255 73,255 200,000 107,810 107,810 200,000
20 65 2,598 9,117 9,117 200,000 80,960 80,960 200,000 120,659 120,659 200,000
21 66 2,598 7,151 7,151 200,000 89,361 89,361 200,000 134,922 134,922 200,000
22 67 2,598 4,710 4,710 200,000 98,576 98,576 200,000 150,774 150,774 200,000
23 68 2,598 1,731 1,731 200,000 108,734 108,734 200,000 168,455 168,455 200,000
24 69 2,598 LAPSED LAPSED LAPSED 120,008 120,008 200,000 188,082 188,082 220,056
25 70 2,598 132,581 132,581 200,000 209,669 209,669 243,216
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-12
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
-------------------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 146,701 146,701 200,000 233,408 233,408 268,420
27 72 2,598 162,679 162,679 200,000 259,589 259,589 293,335
28 73 2,598 180,912 180,912 200,812 288,465 288,465 320,196
29 74 2,598 201,459 201,459 219,590 320,337 320,337 349,167
30 75 2,598 224,174 224,174 239,866 355,552 355,552 380,441
31 76 2,598 249,356 249,356 261,823 394,513 394,513 414,238
32 77 2,598 276,973 276,973 290,822 437,387 437,387 459,256
33 78 2,598 307,248 307,248 322,610 484,553 484,553 508,780
34 79 2,598 340,414 340,414 357,435 536,427 536,427 563,248
35 80 2,598 376,724 376,724 395,560 593,462 593,462 623,135
36 81 2,598 416,439 416,439 437,261 656,251 656,251 689,063
37 82 2,598 459,833 459,833 482,824 725,260 725,260 761,523
38 83 2,598 507,185 507,185 532,544 801,081 801,081 841,135
39 84 2,598 558,786 558,786 586,725 884,295 884,295 928,510
40 85 2,598 614,942 614,942 645,689 975,559 975,559 1,024,336
41 86 2,598 675,976 675,976 709,775 1,075,586 1,075,586 1,129,365
42 87 2,598 742,229 742,229 779,340 1,185,132 1,185,132 1,244,389
43 88 2,598 814,066 814,066 854,769 1,304,967 1,304,967 1,370,216
44 89 2,598 891,858 891,858 936,450 1,436,009 1,436,009 1,507,810
45 90 2,598 975,987 975,987 1,024,787 1,579,177 1,579,177 1,658,136
46 91 2,598 1,066,824 1,066,824 1,120,165 1,735,666 1,735,666 1,822,449
47 92 2,598 1,167,980 1,167,980 1,214,699 1,909,496 1,909,496 1,985,876
48 93 2,598 1,281,260 1,281,260 1,319,698 2,102,417 2,102,417 2,165,490
49 94 2,598 1,408,883 1,408,883 1,437,060 2,317,270 2,317,270 2,363,616
50 95 2,598 1,553,735 1,553,735 1,569,272 2,557,324 2,557,324 2,582,897
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-13
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
-------------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
51. 96 2,598 1,712,498 1,712,498 1,729,623 2,821,911 2,821,911 2,850,130
52. 97 2,598 1,885,811 1,885,811 1,904,669 3,113,432 3,113,432 3,144,566
53. 98 2,598 2,073,179 2,073,179 2,093,911 3,434,389 3,434,389 3,468,732
54. 99 2,598 2,276,089 2,276,089 2,298,850 3,787,817 3,787,817 3,825,695
55. 100 2,598 2,498,594 2,498,594 2,523,580 4,176,790 4,176,790 4,218,558
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVETCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-14
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,916 201,916 0 1,916 201,916 0 1,916 201,916
5 2,598 5,496 7,054 207,054 5,496 7,054 207,054 7,188 8,747 208,747
10 2,598 10,163 11,073 211,073 10,163 11,073 211,073 15,485 16,394 216,394
20 2,598 7,075 7,075 207,075 7,075 7,075 207,075 23,785 23,785 223,785
@ Age 70 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 18,889 18,889 218,889
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
***Policy lapses in policy year 32 based on current charges and a gross
investment return of 0.00%.
Applicant's or I have received a copy of this illustration and understand that any not-
Policyowner's guaranteed elements are subject to change and could be either higher or
Acknowledgement lower. The agent has told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I
Acknowledgement have explained that any not-guaranteed elements illustrated are subject to
change. I have made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-15
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,916 201,916 0 1,916 201,916 0 1,916 201,916
2 47 2,598 1,379 3,327 203,327 1,379 3,327 203,327 1,782 3,730 203,730
3 48 2,598 2,827 4,645 204,645 2,827 4,645 204,645 3,626 5,445 205,445
4 49 2,598 4,206 5,895 205,895 4,206 5,895 205,895 5,420 7,109 207,109
5 50 2,598 5,496 7,054 207,054 5,496 7,054 207,054 7,188 8,747 208,747
6 51 2,598 6,672 8,101 208,101 6,672 8,101 208,101 8,930 10,359 210,359
7 52 2,598 7,737 9,036 209,036 7,737 9,036 209,036 10,647 11,946 211,946
8 53 2,598 8,692 9,861 209,861 8,692 9,861 209,861 12,315 13,484 213,484
9 54 2,598 9,492 10,531 210,531 9,492 10,531 210,531 13,936 14,975 214,975
10 55 2,598 10,163 11,073 211,073 10,163 11,073 211,073 15,485 16,394 216,394
11 56 2,598 10,903 11,683 211,683 10,903 11,683 211,683 17,184 17,964 217,964
12 57 2,598 11,598 12,118 212,118 11,598 12,118 212,118 18,894 19,414 219,414
13 58 2,598 12,120 12,379 212,379 12,120 12,379 212,379 20,463 20,723 220,723
14 59 2,598 12,294 12,424 212,424 12,294 12,424 212,424 21,715 21,845 221,845
15 60 2,598 12,254 12,254 212,254 12,254 12,254 212,254 22,736 22,736 222,736
16 61 2,598 11,827 11,827 211,827 11,827 11,827 211,827 23,401 23,401 223,401
17 62 2,598 11,145 11,145 211,145 11,145 11,145 211,145 23,841 23,841 223,841
18 63 2,598 10,142 10,142 210,142 10,142 10,142 210,142 24,038 24,038 224,038
19 64 2,598 8,800 8,800 208,800 8,800 8,800 208,800 24,018 24,018 224,018
20 65 2,598 7,075 7,075 207,075 7,075 7,075 207,075 23,785 23,785 223,785
21 66 2,598 4,927 4,927 204,927 4,927 4,927 204,927 23,343 23,343 223,343
22 67 2,598 2,339 2,339 202,339 2,339 2,339 202,339 22,623 22,623 222,623
23 68 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 21,630 21,630 221,630
24 69 2,598 20,392 20,392 220,392
25 70 2,598 18,889 18,889 218,889
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-16
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 17,077 17,077 217,077
27 72 2,598 15,034 15,034 215,034
28 73 2,598 12,643 12,643 212,643
29 74 2,598 9,839 9,839 209,839
30 75 2,598 6,581 6,581 206,581
31 76 2,598 2,852 2,852 202,852
32 77 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-17
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,916 201,916 97 2,045 202,045 97 2,045 202,045
5 2,598 5,496 7,054 207,054 7,112 8,671 208,671 9,012 10,571 210,571
10 2,598 10,163 11,073 211,073 15,582 16,492 216,492 22,249 23,159 223,159
20 2,598 7,075 7,075 207,075 24,561 24,561 224,561 50,888 50,888 250,888
@ Age 70 2,598 LAPSED LAPSED LAPSED 13,767 13,767 213,767 60,067 60,067 260,067
@ Age 85 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 16,865 16,865 216,865
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 6.00%.
***Policy lapses in policy year 42 based on current charges and a gross
investment return of 6.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-18
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,916 201,916 97 2,045 202,045 97 2,045 202,045
2 47 2,598 1,379 3,327 203,327 1,742 3,691 203,691 2,159 4,107 204,107
3 48 2,598 2,827 4,645 204,645 3,517 5,335 205,335 4,367 6,186 206,186
4 49 2,598 4,206 5,895 205,895 5,314 7,003 207,003 6,643 8,331 208,331
5 50 2,598 5,496 7,054 207,054 7,112 8,671 208,671 9,012 10,571 210,571
6 51 2,598 6,672 8,101 208,101 8,885 10,314 210,314 11,480 12,909 212,909
7 52 2,598 7,737 9,036 209,036 10,632 11,931 211,931 14,051 15,350 215,350
8 53 2,598 8,692 9,861 209,861 12,352 13,521 213,521 16,704 17,873 217,873
9 54 2,598 9,492 10,531 210,531 13,995 15,034 215,034 19,444 20,483 220,483
10 55 2,598 10,163 11,073 211,073 15,582 16,492 216,492 22,249 23,159 223,159
11 56 2,598 10,903 11,683 211,683 17,316 18,095 218,095 25,352 26,131 226,131
12 57 2,598 11,598 12,118 212,118 19,078 19,598 219,598 28,617 29,137 229,137
13 58 2,598 12,120 12,379 212,379 20,735 20,995 220,995 31,892 32,152 232,152
14 59 2,598 12,294 12,424 212,424 22,103 22,233 222,233 34,998 35,128 235,128
15 60 2,598 12,254 12,254 212,254 23,306 23,306 223,306 38,015 38,015 238,015
16 61 2,598 11,827 11,827 211,827 24,157 24,157 224,157 40,808 40,808 240,808
17 62 2,598 11,145 11,145 211,145 24,776 24,776 224,776 43,504 43,504 243,504
18 63 2,598 10,142 10,142 210,142 25,080 25,080 225,080 46,074 46,074 246,074
19 64 2,598 8,800 8,800 208,800 25,030 25,030 225,030 48,537 48,537 248,537
20 65 2,598 7,075 7,075 207,075 24,561 24,561 224,561 50,888 50,888 250,888
21 66 2,598 4,927 4,927 204,927 23,608 23,608 223,608 53,122 53,122 253,122
22 67 2,598 2,339 2,339 202,339 22,123 22,123 222,123 55,160 55,160 255,160
23 68 2,598 LAPSED LAPSED LAPSED 20,035 20,035 220,035 56,995 56,995 256,995
24 69 2,598 17,292 17,292 217,292 58,642 58,642 258,642
25 70 2,598 13,767 13,767 213,767 60,067 60,067 260,067
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-19
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 9,353 9,353 209,353 61,213 61,213 261,213
27 72 2,598 3,913 3,913 203,913 62,141 62,141 262,141
28 73 2,598 LAPSED LAPSED LAPSED 62,718 62,718 262,718
29 74 2,598 62,855 62,855 262,855
30 75 2,598 62,486 62,486 262,486
31 76 2,598 61,562 61,562 261,562
32 77 2,598 60,011 60,011 260,011
33 78 2,598 57,731 57,731 257,731
34 79 2,598 54,642 54,642 254,642
35 80 2,598 50,659 50,659 250,659
36 81 2,598 46,353 46,353 246,353
37 82 2,598 41,026 41,026 241,026
38 83 2,598 34,584 34,584 234,584
39 84 2,598 26,610 26,610 226,610
40 85 2,598 16,865 16,865 216,865
41 86 2,598 5,148 5,148 205,148
42 87 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-20
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- -------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,598 0 1,916 201,916 227 2,175 202,175 227 2,175 202,175
5 2,598 5,496 7,054 207,054 9,028 10,587 210,587 11,157 12,716 212,716
10 2,598 10,163 11,073 211,073 23,575 24,485 224,485 32,000 32,909 232,909
20 2,598 7,075 7,075 207,075 67,575 67,575 267,575 111,632 111,632 311,632
@ Age 70 2,598 LAPSED LAPSED LAPSED 92,063 92,063 292,063 179,826 179,826 379,826
@ Age 85 2,598 LAPSED LAPSED LAPSED 9,978 9,978 209,978 652,262 652,262 852,262
@ Age 90 2,598 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 968,937 968,937 1,168,937
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 41 based on guaranteed charges and a gross
investment return of 12.00%.
***Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-21
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,598 0 1,916 201,916 227 2,175 202,175 227 2,175 202,175
2 47 2,598 1,379 3,327 203,327 2,123 4,071 204,071 2,552 4,500 204,500
3 48 2,598 2,827 4,645 204,645 4,269 6,088 206,088 5,171 6,990 206,990
4 49 2,598 4,206 5,895 205,895 6,574 8,262 208,262 8,023 9,712 209,712
5 50 2,598 5,496 7,054 207,054 9,028 10,587 210,587 11,157 12,716 212,716
6 51 2,598 6,672 8,101 208,101 11,622 13,050 213,050 14,602 16,031 216,031
7 52 2,598 7,737 9,036 209,036 14,370 15,669 215,669 18,390 19,689 219,689
8 53 2,598 8,692 9,861 209,861 17,288 18,457 218,457 22,532 23,701 223,701
9 54 2,598 9,492 10,531 210,531 20,343 21,382 221,382 27,063 28,103 228,103
10 55 2,598 10,163 11,073 211,073 23,575 24,485 224,485 32,000 32,909 232,909
11 56 2,598 10,903 11,683 211,683 27,216 27,995 227,995 37,622 38,402 238,402
12 57 2,598 11,598 12,118 212,118 31,173 31,692 231,692 43,842 44,361 244,361
13 58 2,598 12,120 12,379 212,379 35,336 35,596 235,596 50,552 50,812 250,812
14 59 2,598 12,294 12,424 212,424 39,547 39,676 239,676 57,624 57,754 257,754
15 60 2,598 12,254 12,254 212,254 43,953 43,953 243,953 65,188 65,188 265,188
16 61 2,598 11,827 11,827 211,827 48,395 48,395 248,395 73,165 73,165 273,165
17 62 2,598 11,145 11,145 211,145 53,020 53,020 253,020 81,740 81,740 281,740
18 63 2,598 10,142 10,142 210,142 57,770 57,770 257,770 90,952 90,952 290,952
19 64 2,598 8,800 8,800 208,800 62,635 62,635 262,635 100,891 100,891 300,891
20 65 2,598 7,075 7,075 207,075 67,575 67,575 267,575 111,632 111,632 311,632
21 66 2,598 4,927 4,927 204,927 72,548 72,548 272,548 123,259 123,259 323,259
22 67 2,598 2,339 2,339 202,339 77,532 77,532 277,532 135,789 135,789 335,789
23 68 2,598 LAPSED LAPSED LAPSED 82,479 82,479 282,479 149,313 149,313 349,313
24 69 2,598 87,358 87,358 287,358 163,962 163,962 363,962
25 70 2,598 92,063 92,063 292,063 179,826 179,826 379,826
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-22
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
--------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,598 96,500 96,500 296,500 196,981 196,981 396,981
27 72 2,598 100,540 100,540 300,540 215,636 215,636 415,636
28 73 2,598 103,992 103,992 303,992 235,822 235,822 435,822
29 74 2,598 106,668 106,668 306,668 257,622 257,622 457,622
30 75 2,598 108,363 108,363 308,363 281,154 281,154 481,154
31 76 2,598 108,873 108,873 308,873 306,572 306,572 506,572
32 77 2,598 107,976 107,976 307,976 334,021 334,021 534,021
33 78 2,598 105,475 105,475 305,475 363,639 363,639 563,639
34 79 2,598 101,102 101,102 301,102 395,600 395,600 595,600
35 80 2,598 94,511 94,511 294,511 430,097 430,097 630,097
36 81 2,598 85,296 85,296 285,296 468,022 468,022 668,022
37 82 2,598 72,905 72,905 272,905 509,028 509,028 709,028
38 83 2,598 56,706 56,706 256,706 553,388 553,388 753,388
39 84 2,598 35,972 35,972 235,972 601,075 601,075 801,075
40 85 2,598 9,978 9,978 209,978 652,262 652,262 852,262
41 86 2,598 LAPSED LAPSED LAPSED 707,191 707,191 907,191
42 87 2,598 766,080 766,080 966,080
43 88 2,598 829,044 829,044 1,029,044
44 89 2,598 896,562 896,562 1,096,562
45 90 2,598 968,937 968,937 1,168,937
46 91 2,598 1,047,078 1,047,078 1,247,078
47 92 2,598 1,132,777 1,132,777 1,332,777
48 93 2,598 1,225,042 1,225,042 1,425,042
49 94 2,598 1,324,763 1,324,763 1,524,763
50 95 2,598 1,432,650 1,432,650 1,632,650
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-23
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
51 96 2,598 1,551,158 1,551,158 1,751,158
52 97 2,598 1,680,343 1,680,343 1,880,343
53 98 2,598 1,819,225 1,819,225 2,019,225
54 99 2,598 1,969,734 1,969,734 2,169,734
55 100 2,598 2,131,741 2,131,741 2,331,741
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVETCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,598.00 . GPT Version 01.2002
Initial Modal Premium: $2,598.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-24
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,445 200,000 0 1,445 200,000 0 1,445 200,000
5 2,010 3,761 4,967 200,000 3,761 4,967 200,000 5,535 6,741 200,000
10 2,010 7,101 7,805 200,000 7,101 7,805 200,000 11,845 12,548 200,000
20 2,010 8,049 8,049 200,000 8,049 8,049 200,000 19,930 19,930 200,000
@ Age 70 2,010 224 224 200,000 224 224 200,000 19,569 19,569 200,000
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policylapses in policy year 26 based on guaranteed charges and a gross
investment return of 0.00%.
** Policylapses in policy year 26 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policylapses in policy year 35 based on current charges and a gross
investment return of 0.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has told
Acknowledgement me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-25
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
----------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,445 200,000 0 1,445 200,000 0 1,445 200,000
2 47 2,010 893 2,400 200,000 893 2,400 200,000 1,314 2,821 200,000
3 48 2,010 1,914 3,321 200,000 1,914 3,321 200,000 2,748 4,155 200,000
4 49 2,010 2,878 4,184 200,000 2,878 4,184 200,000 4,162 5,469 200,000
5 50 2,010 3,761 4,967 200,000 3,761 4,967 200,000 5,535 6,741 200,000
6 51 2,010 4,590 5,696 200,000 4,590 5,696 200,000 6,890 7,995 200,000
7 52 2,010 5,342 6,347 200,000 5,342 6,347 200,000 8,204 9,209 200,000
8 53 2,010 6,017 6,922 200,000 6,017 6,922 200,000 9,478 10,383 200,000
9 54 2,010 6,596 7,400 200,000 6,596 7,400 200,000 10,691 11,495 200,000
10 55 2,010 7,101 7,805 200,000 7,101 7,805 200,000 11,845 12,548 200,000
11 56 2,010 7,738 8,341 200,000 7,738 8,341 200,000 13,188 13,791 200,000
12 57 2,010 8,381 8,783 200,000 8,381 8,783 200,000 14,572 14,974 200,000
13 58 2,010 8,928 9,129 200,000 8,928 9,129 200,000 15,874 16,075 200,000
14 59 2,010 9,283 9,383 200,000 9,283 9,383 200,000 16,889 16,989 200,000
15 60 2,010 9,545 9,545 200,000 9,545 9,545 200,000 17,720 17,720 200,000
16 61 2,010 9,592 9,592 200,000 9,592 9,592 200,000 18,356 18,356 200,000
17 62 2,010 9,504 9,504 200,000 9,504 9,504 200,000 18,901 18,901 200,000
18 63 2,010 9,236 9,236 200,000 9,236 9,236 200,000 19,333 19,333 200,000
19 64 2,010 8,766 8,766 200,000 8,766 8,766 200,000 19,675 19,675 200,000
20 65 2,010 8,049 8,049 200,000 8,049 8,049 200,000 19,930 19,930 200,000
21 66 2,010 7,059 7,059 200,000 7,059 7,059 200,000 20,097 20,097 200,000
22 67 2,010 5,796 5,796 200,000 5,796 5,796 200,000 20,156 20,156 200,000
23 68 2,010 4,254 4,254 200,000 4,254 4,254 200,000 20,088 20,088 200,000
24 69 2,010 2,407 2,407 200,000 2,407 2,407 200,000 19,892 19,892 200,000
25 70 2,010 224 224 200,000 224 224 200,000 19,569 19,569 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-26
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 19,056 19,056 200,000
27 72 2,010 18,373 18,373 200,000
28 73 2,010 17,519 17,519 200,000
29 74 2,010 16,321 16,321 200,000
30 75 2,010 14,751 14,751 200,000
31 76 2,010 12,802 12,802 200,000
32 77 2,010 10,242 10,242 200,000
33 78 2,010 7,071 7,071 200,000
34 79 2,010 3,265 3,265 200,000
35 80 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-27
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,445 200,000 36 1,544 200,000 36 1,544 200,000
5 2,010 3,761 4,967 200,000 4,950 6,156 200,000 6,936 8,142 200,000
10 2,010 7,101 7,805 200,000 11,071 11,775 200,000 17,079 17,783 200,000
20 2,010 8,049 8,049 200,000 22,403 22,403 200,000 41,890 41,890 200,000
@ Age 70 2,010 224 224 200,000 21,615 21,615 200,000 55,096 55,096 200,000
@ Age 85 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 77,655 77,655 200,000
@ Age 90 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 46,578 46,578 200,000
* Policy lapses in policy year 26 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 32 based on guaranteed charges and a gross
investment return of 6.00%.
***Policy lapses in policy year 48 based on current charges and a gross
investment return of 6.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-28
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,445 200,000 36 1,544 200,000 36 1,544 200,000
2 47 2,010 893 2,400 200,000 1,167 2,675 200,000 1,601 3,109 200,000
3 48 2,010 1,914 3,321 200,000 2,428 3,835 200,000 3,313 4,720 200,000
4 49 2,010 2,878 4,184 200,000 3,697 5,003 200,000 5,099 6,405 200,000
5 50 2,010 3,761 4,967 200,000 4,950 6,156 200,000 6,936 8,142 200,000
6 51 2,010 4,590 5,696 200,000 6,212 7,317 200,000 8,853 9,959 200,000
7 52 2,010 5,342 6,347 200,000 7,459 8,464 200,000 10,830 11,835 200,000
8 53 2,010 6,017 6,922 200,000 8,693 9,597 200,000 12,868 13,773 200,000
9 54 2,010 6,596 7,400 200,000 9,889 10,693 200,000 14,951 15,755 200,000
10 55 2,010 7,101 7,805 200,000 11,071 11,775 200,000 17,079 17,783 200,000
11 56 2,010 7,738 8,341 200,000 12,451 13,054 200,000 19,514 20,117 200,000
12 57 2,010 8,381 8,783 200,000 13,906 14,308 200,000 22,115 22,517 200,000
13 58 2,010 8,928 9,129 200,000 15,334 15,535 200,000 24,762 24,963 200,000
14 59 2,010 9,283 9,383 200,000 16,635 16,735 200,000 27,254 27,355 200,000
15 60 2,010 9,545 9,545 200,000 17,909 17,909 200,000 29,694 29,694 200,000
16 61 2,010 9,592 9,592 200,000 19,034 19,034 200,000 32,065 32,065 200,000
17 62 2,010 9,504 9,504 200,000 20,086 20,086 200,000 34,472 34,472 200,000
18 63 2,010 9,236 9,236 200,000 21,020 21,020 200,000 36,900 36,900 200,000
19 64 2,010 8,766 8,766 200,000 21,809 21,809 200,000 39,371 39,371 200,000
20 65 2,010 8,049 8,049 200,000 22,403 22,403 200,000 41,890 41,890 200,000
21 66 2,010 7,059 7,059 200,000 22,770 22,770 200,000 44,463 44,463 200,000
22 67 2,010 5,796 5,796 200,000 22,899 22,899 200,000 47,075 47,075 200,000
23 68 2,010 4,254 4,254 200,000 22,775 22,775 200,000 49,715 49,715 200,000
24 69 2,010 2,407 2,407 200,000 22,361 22,361 200,000 52,386 52,386 200,000
25 70 2,010 224 224 200,000 21,615 21,615 200,000 55,096 55,096 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-29
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 LAPSED LAPSED LAPSED 20,446 20,446 200,000 57,796 57,796 200,000
27 72 2,010 18,756 18,756 200,000 60,511 60,511 200,000
28 73 2,010 16,386 16,386 200,000 63,246 63,246 200,000
29 74 2,010 13,135 13,135 200,000 65,875 65,875 200,000
30 75 2,010 8,840 8,840 200,000 68,386 68,386 200,000
31 76 2,010 3,235 3,235 200,000 70,784 70,784 200,000
32 77 2,010 LAPSED LAPSED LAPSED 72,912 72,912 200,000
33 78 2,010 74,784 74,784 200,000
34 79 2,010 76,392 76,392 200,000
35 80 2,010 77,743 77,743 200,000
36 81 2,010 78,810 78,810 200,000
37 82 2,010 79,459 79,459 200,000
38 83 2,010 79,599 79,599 200,000
39 84 2,010 79,066 79,066 200,000
40 85 2,010 77,655 77,655 200,000
41 86 2,010 75,269 75,269 200,000
42 87 2,010 71,248 71,248 200,000
43 88 2,010 65,318 65,318 200,000
44 89 2,010 57,165 57,165 200,000
45 90 2,010 46,578 46,578 200,000
46 91 2,010 34,355 34,355 200,000
47 92 2,010 19,324 19,324 200,000
48 93 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-30
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ------------------------ -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,445 200,000 136 1,643 200,000 136 1,643 200,000
5 2,010 3,761 4,967 200,000 6,364 7,570 200,000 8,584 9,790 200,000
10 2,010 7,101 7,805 200,000 16,968 17,672 200,000 24,628 25,332 200,000
20 2,010 8,049 8,049 200,000 57,340 57,340 200,000 91,102 91,102 200,000
@ Age 70 2,010 224 224 200,000 92,819 92,819 200,000 157,344 157,344 200,000
@ Age 85 2,010 LAPSED LAPSED LAPSED 417,376 417,376 438,244 740,068 740,068 777,071
@ Age 90 2,010 LAPSED LAPSED LAPSED 670,022 670,022 703,523 1,200,827 1,200,827 1,260,868
* Policy lapses in policy year 26 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
***Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared on 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-31
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
------------------------------------------- ------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,445 200,000 136 1,643 200,000 136 1,643 200,000
2 47 2,010 893 2,400 200,000 1,454 2,962 200,000 1,901 3,409 200,000
3 48 2,010 1,914 3,321 200,000 2,990 4,397 200,000 3,928 5,335 200,000
4 49 2,010 2,878 4,184 200,000 4,631 5,937 200,000 6,156 7,463 200,000
5 50 2,010 3,761 4,967 200,000 6,364 7,570 200,000 8,584 9,790 200,000
6 51 2,010 4,590 5,696 200,000 8,226 9,331 200,000 11,257 12,362 200,000
7 52 2,010 5,342 6,347 200,000 10,207 11,212 200,000 14,176 15,181 200,000
8 53 2,010 6,017 6,922 200,000 12,321 13,226 200,000 17,369 18,273 200,000
9 54 2,010 6,596 7,400 200,000 14,562 15,366 200,000 20,843 21,647 200,000
10 55 2,010 7,101 7,805 200,000 16,968 17,672 200,000 24,628 25,332 200,000
11 56 2,010 7,738 8,341 200,000 19,781 20,384 200,000 29,026 29,629 200,000
12 57 2,010 8,381 8,783 200,000 22,905 23,307 200,000 33,939 34,341 200,000
13 58 2,010 8,928 9,129 200,000 26,266 26,467 200,000 39,290 39,491 200,000
14 59 2,010 9,283 9,383 200,000 29,792 29,893 200,000 44,932 45,033 200,000
15 60 2,010 9,545 9,545 200,000 33,618 33,618 200,000 51,019 51,019 200,000
16 61 2,010 9,592 9,592 200,000 37,659 37,659 200,000 57,583 57,583 200,000
17 62 2,010 9,504 9,504 200,000 42,038 42,038 200,000 64,795 64,795 200,000
18 63 2,010 9,236 9,236 200,000 46,759 46,759 200,000 72,717 72,717 200,000
19 64 2,010 8,766 8,766 200,000 51,854 51,854 200,000 81,453 81,453 200,000
20 65 2,010 8,049 8,049 200,000 57,340 57,340 200,000 91,102 91,102 200,000
21 66 2,010 7,059 7,059 200,000 63,262 63,262 200,000 101,776 101,776 200,000
22 67 2,010 5,796 5,796 200,000 69,689 69,689 200,000 113,589 113,589 200,000
23 68 2,010 4,254 4,254 200,000 76,703 76,703 200,000 126,675 126,675 200,000
24 69 2,010 2,407 2,407 200,000 84,382 84,382 200,000 141,198 141,198 200,000
25 70 2,010 224 224 200,000 92,819 92,819 200,000 157,344 157,344 200,000
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-32
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
---------------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 LAPSED LAPSED LAPSED 102,103 102,103 200,000 175,313 175,313 201,610
27 72 2,010 112,346 112,346 200,000 195,236 195,236 220,617
28 73 2,010 123,677 123,677 200,000 217,219 217,219 241,113
29 74 2,010 136,259 136,259 200,000 241,468 241,468 263,200
30 75 2,010 150,347 150,347 200,000 268,237 268,237 287,014
31 76 2,010 166,247 166,247 200,000 297,820 297,820 312,711
32 77 2,010 184,389 184,389 200,000 330,385 330,385 346,904
33 78 2,010 205,037 205,037 215,289 366,230 366,230 384,542
34 79 2,010 227,746 227,746 239,133 405,680 405,680 425,964
35 80 2,010 252,660 252,660 265,293 449,093 449,093 471,547
36 81 2,010 279,973 279,973 293,972 496,856 496,856 521,699
37 82 2,010 309,886 309,886 325,381 549,375 549,375 576,844
38 83 2,010 342,611 342,611 359,741 607,097 607,097 637,452
39 84 2,010 378,363 378,363 397,281 670,494 670,494 704,018
40 85 2,010 417,376 417,376 438,244 740,068 740,068 777,071
41 86 2,010 459,888 459,888 482,883 816,401 816,401 857,221
42 87 2,010 506,152 506,152 531,459 899,959 899,959 944,957
43 88 2,010 556,423 556,423 584,244 991,384 991,384 1,040,953
44 89 2,010 610,960 610,960 641,508 1,091,389 1,091,389 1,145,959
45 90 2,010 670,022 670,022 703,523 1,200,827 1,200,827 1,260,868
46 91 2,010 733,853 733,853 770,546 1,321,030 1,321,030 1,387,082
47 92 2,010 804,650 804,650 836,836 1,454,257 1,454,257 1,512,427
48 93 2,010 883,609 883,609 910,118 1,601,858 1,601,858 1,649,913
49 94 2,010 972,246 972,246 991,691 1,766,036 1,766,036 1,801,357
50 95 2,010 1,072,563 1,072,563 1,083,288 1,949,203 1,949,203 1,968,695
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-33
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
-------------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
51 96 2,010 1,182,499 1,182,499 1,194,324 2,151,086 2,151,086 2,172,597
52 97 2,010 1,302,488 1,302,488 1,315,513 2,373,517 2,373,517 2,397,253
53 98 2,010 1,432,188 1,432,188 1,446,509 2,618,472 2,618,472 2,644,656
54 99 2,010 1,572,570 1,572,570 1,588,296 2,888,307 2,888,307 2,917,191
55 100 2,010 1,726,510 1,726,510 1,743,775 3,185,530 3,185,530 3,217,386
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVETCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
1 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-34
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,443 201,443 0 1,443 201,443 0 1,443 201,443
5 2,010 3,698 4,904 204,904 3,698 4,904 204,904 5,507 6,713 206,713
10 2,010 6,856 7,560 207,560 6,856 7,560 207,560 11,726 12,430 212,430
20 2,010 6,992 6,992 206,992 6,992 6,992 206,992 18,974 18,974 218,974
@ Age 70 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 17,763 17,763 217,763
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
***Policy lapses in policy year 34 based on current charges and a gross
investment return of 0.00%.
Applicant's or I have received a copy of this illustration and understand that any not-
Policyowner's guaranteed elements are subject to change and could be either higher or lower.
Acknowledgement The agent has told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I
have made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option:
Specified Amount for Option 2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-35
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,443 201,443 0 1,443 201,443 0 1,443 201,443
2 47 2,010 882 2,389 202,389 882 2,389 202,389 1,308 2,816 202,816
3 48 2,010 1,890 3,297 203,297 1,890 3,297 203,297 2,737 4,144 204,144
4 49 2,010 2,836 4,143 204,143 2,836 4,143 204,143 4,144 5,450 205,450
5 50 2,010 3,698 4,904 204,904 3,698 4,904 204,904 5,507 6,713 206,713
6 51 2,010 4,501 5,606 205,606 4,501 5,606 205,606 6,850 7,956 207,956
7 52 2,010 5,222 6,227 206,227 5,222 6,227 206,227 8,150 9,155 209,155
8 53 2,010 5,861 6,766 206,766 5,861 6,766 206,766 9,407 10,312 210,312
9 54 2,010 6,398 7,202 207,202 6,398 7,202 207,202 10,599 11,403 211,403
10 55 2,010 6,856 7,560 207,560 6,856 7,560 207,560 11,726 12,430 212,430
11 56 2,010 7,440 8,043 208,043 7,440 8,043 208,043 13,040 13,643 213,643
12 57 2,010 8,022 8,424 208,424 8,022 8,424 208,424 14,387 14,789 214,789
13 58 2,010 8,503 8,704 208,704 8,503 8,704 208,704 15,645 15,846 215,846
14 59 2,010 8,785 8,885 208,885 8,785 8,885 208,885 16,597 16,698 216,698
15 60 2,010 8,969 8,969 208,969 8,969 8,969 208,969 17,346 17,346 217,346
16 61 2,010 8,932 8,932 208,932 8,932 8,932 208,932 17,889 17,889 217,889
17 62 2,010 8,754 8,754 208,754 8,754 8,754 208,754 18,329 18,329 218,329
18 63 2,010 8,389 8,389 208,389 8,389 8,389 208,389 18,643 18,643 218,643
19 64 2,010 7,816 7,816 207,816 7,816 7,816 207,816 18,858 18,858 218,858
20 65 2,010 6,992 6,992 206,992 6,992 6,992 206,992 18,974 18,974 218,974
21 66 2,010 5,896 5,896 205,896 5,896 5,896 205,896 18,994 18,994 218,994
22 67 2,010 4,533 4,533 204,533 4,533 4,533 204,533 18,895 18,895 218,895
23 68 2,010 2,907 2,907 202,907 2,907 2,907 202,907 18,655 18,655 218,655
24 69 2,010 998 998 200,998 998 998 200,998 18,277 18,277 218,277
25 70 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 17,763 17,763 217,763
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-36
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- ----------------------
0.00% (-0.93% Net) 0.00% (-0.93% Net) 0.00% (-0.93% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 17,044 17,044 217,044
27 72 2,010 16,146 16,146 216,146
28 73 2,010 15,072 15,072 215,072
29 74 2,010 13,637 13,637 213,637
30 75 2,010 11,820 11,820 211,820
31 76 2,010 9,629 9,629 209,629
32 77 2,010 6,833 6,833 206,833
33 78 2,010 3,464 3,464 203,464
34 79 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 0.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-37
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,443 201,443 35 1,542 201,542 35 1,542 201,542
5 2,010 3,698 4,904 204,904 4,871 6,077 206,077 6,902 8,108 208,108
10 2,010 6,856 7,560 207,560 10,690 11,393 211,393 16,900 17,604 217,604
20 2,010 6,992 6,992 206,992 19,738 19,738 219,738 39,765 39,765 239,765
@ Age 70 2,010 LAPSED LAPSED LAPSED 16,042 16,042 216,042 49,956 49,956 249,956
@ Age 85 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 27,305 27,305 227,305
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 6.00%.
***Policy lapses in policy year 43 based on current charges and a gross
investment return of 6.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-38
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,443 201,443 35 1,542 201,542 35 1,542 201,542
2 47 2,010 882 2,389 202,389 1,155 2,662 202,662 1,595 3,103 203,103
3 48 2,010 1,890 3,297 203,297 2,400 3,807 203,807 3,301 4,708 204,708
4 49 2,010 2,836 4,143 204,143 3,647 4,954 204,954 5,077 6,383 206,383
5 50 2,010 3,698 4,904 204,904 4,871 6,077 206,077 6,902 8,108 208,108
6 51 2,010 4,501 5,606 205,606 6,095 7,200 207,200 8,802 9,908 209,908
7 52 2,010 5,222 6,227 206,227 7,295 8,300 208,300 10,757 11,762 211,762
8 53 2,010 5,861 6,766 206,766 8,470 9,374 209,374 12,769 13,674 213,674
9 54 2,010 6,398 7,202 207,202 9,594 10,398 210,398 14,816 15,620 215,620
10 55 2,010 6,856 7,560 207,560 10,690 11,393 211,393 16,900 17,604 217,604
11 56 2,010 7,440 8,043 208,043 11,966 12,569 212,569 19,281 19,884 219,884
12 57 2,010 8,022 8,424 208,424 13,297 13,699 213,699 21,814 22,216 222,216
13 58 2,010 8,503 8,704 208,704 14,579 14,780 214,780 24,376 24,577 224,577
14 59 2,010 8,785 8,885 208,885 15,711 15,811 215,811 26,745 26,845 226,845
15 60 2,010 8,969 8,969 208,969 16,790 16,790 216,790 29,018 29,018 229,018
16 61 2,010 8,932 8,932 208,932 17,689 17,689 217,689 31,188 31,188 231,188
17 62 2,010 8,754 8,754 208,754 18,481 18,481 218,481 33,356 33,356 233,356
18 63 2,010 8,389 8,389 208,389 19,111 19,111 219,111 35,496 35,496 235,496
19 64 2,010 7,816 7,816 207,816 19,550 19,550 219,550 37,633 37,633 237,633
20 65 2,010 6,992 6,992 206,992 19,738 19,738 219,738 39,765 39,765 239,765
21 66 2,010 5,896 5,896 205,896 19,641 19,641 219,641 41,894 41,894 241,894
22 67 2,010 4,533 4,533 204,533 19,246 19,246 219,246 43,994 43,994 243,994
23 68 2,010 2,907 2,907 202,907 18,541 18,541 218,541 46,039 46,039 246,039
24 69 2,010 998 998 200,998 17,486 17,486 217,486 48,027 48,027 248,027
25 70 2,010 LAPSED LAPSED LAPSED 16,042 16,042 216,042 49,956 49,956 249,956
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-39
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
------------------------------------------- ----------------------
0.00% (-0.93% Net) 6.00% (5.07% Net) 6.00% (5.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 14,118 14,118 214,118 51,749 51,749 251,749
27 72 2,010 11,621 11,621 211,621 53,426 53,426 253,426
28 73 2,010 8,402 8,402 208,402 54,981 54,981 254,981
29 74 2,010 4,283 4,283 204,283 56,213 56,213 256,213
30 75 2,010 LAPSED LAPSED LAPSED 57,083 57,083 257,083
31 76 2,010 57,576 57,576 257,576
32 77 2,010 57,431 57,431 257,431
33 78 2,010 56,643 56,643 256,643
34 79 2,010 55,185 55,185 255,185
35 80 2,010 53,051 53,051 253,051
36 81 2,010 50,188 50,188 250,188
37 82 2,010 46,367 46,367 246,367
38 83 2,010 41,448 41,448 241,448
39 84 2,010 35,187 35,187 235,187
40 85 2,010 27,305 27,305 227,305
41 86 2,010 17,754 17,754 217,754
42 87 2,010 5,653 5,653 205,653
43 88 0 LAPSED LAPSED LAPSED
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 6.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-40
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Numeric Summary The following table shows how differences in investment returns and policy charges
would affect policy cash value and death benefit.
Guaranteed Charges* Guaranteed Charges** Current Charges***
---------------------- ---------------------- ------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
Policy Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 2,010 0 1,443 201,443 134 1,641 201,641 134 1,641 201,641
5 2,010 3,698 4,904 204,904 6,266 7,472 207,472 8,541 9,747 209,747
10 2,010 6,856 7,560 207,560 16,379 17,083 217,083 24,359 25,062 225,062
20 2,010 6,992 6,992 206,992 50,689 50,689 250,689 86,275 86,275 286,275
@ Age 70 2,010 LAPSED LAPSED LAPSED 73,724 73,724 273,724 142,386 142,386 342,386
@ Age 85 2,010 LAPSED LAPSED LAPSED 71,810 71,810 271,810 535,013 535,013 735,013
@ Age 90 2,010 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 785,389 785,389 985,389
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 44 based on guaranteed charges and a gross
investment return of 12.00%.
***Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
Applicant's or I have received a copy of this illustration and understand that any not-guaranteed
Policyowner's elements are subject to change and could be either higher or lower. The agent has
Acknowledgement told me that they are not guaranteed.
Signature of Applicant or Policyowner Date
Representative's I certify that this illustration has been presented to the applicant and that I have
Acknowledgement explained that any not-guaranteed elements illustrated are subject to change. I have
made no statements that are inconsistent with the illustration.
Signature of Representative Date
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-41
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement
Guaranteed Charges Current Charges
--------------------------------------------- ------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
1 46 2,010 0 1,443 201,443 134 1,641 201,641 134 1,641 201,641
2 47 2,010 882 2,389 202,389 1,441 2,948 202,948 1,895 3,402 203,402
3 48 2,010 1,890 3,297 203,297 2,958 4,365 204,365 3,913 5,320 205,320
4 49 2,010 2,836 4,143 204,143 4,571 5,878 205,878 6,130 7,437 207,437
5 50 2,010 3,698 4,904 204,904 6,266 7,472 207,472 8,541 9,747 209,747
6 51 2,010 4,501 5,606 205,606 8,075 9,180 209,180 11,191 12,296 212,296
7 52 2,010 5,222 6,227 206,227 9,985 10,990 210,990 14,079 15,084 215,084
8 53 2,010 5,861 6,766 206,766 12,006 12,911 212,911 17,231 18,136 218,136
9 54 2,010 6,398 7,202 207,202 14,126 14,930 214,930 20,649 21,453 221,453
10 55 2,010 6,856 7,560 207,560 16,379 17,083 217,083 24,359 25,062 225,062
11 56 2,010 7,440 8,043 208,043 18,998 19,601 219,601 28,661 29,264 229,264
12 57 2,010 8,022 8,424 208,424 21,877 22,279 222,279 33,449 33,851 233,851
13 58 2,010 8,503 8,704 208,704 24,933 25,134 225,134 38,635 38,836 238,836
14 59 2,010 8,785 8,885 208,885 28,083 28,183 228,183 44,036 44,137 244,137
15 60 2,010 8,969 8,969 208,969 31,447 31,447 231,447 49,784 49,784 249,784
16 61 2,010 8,932 8,932 208,932 34,923 34,923 234,923 55,914 55,914 255,914
17 62 2,010 8,754 8,754 208,754 38,608 38,608 238,608 62,579 62,579 262,579
18 63 2,010 8,389 8,389 208,389 42,472 42,472 242,472 69,808 69,808 269,808
19 64 2,010 7,816 7,816 207,816 46,510 46,510 246,510 77,684 77,684 277,684
20 65 2,010 6,992 6,992 206,992 50,689 50,689 250,689 86,275 86,275 286,275
21 66 2,010 5,896 5,896 205,896 54,997 54,997 254,997 95,655 95,655 295,655
22 67 2,010 4,533 4,533 204,533 59,450 59,450 259,450 105,880 105,880 305,880
23 68 2,010 2,907 2,907 202,907 64,061 64,061 264,061 117,012 117,012 317,012
24 69 2,010 998 998 200,998 68,822 68,822 268,822 129,146 129,146 329,146
25 70 2,010 LAPSED LAPSED LAPSED 73,724 73,724 273,724 142,386 142,386 342,386
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-42
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
--------------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
26 71 2,010 78,705 78,705 278,705 156,770 156,770 356,770
27 72 2,010 83,697 83,697 283,697 172,442 172,442 372,442
28 73 2,010 88,578 88,578 288,578 189,536 189,536 389,536
29 74 2,010 93,183 93,183 293,183 207,998 207,998 407,998
30 75 2,010 97,409 97,409 297,409 227,945 227,945 427,945
31 76 2,010 101,066 101,066 301,066 249,531 249,531 449,531
32 77 2,010 104,044 104,044 304,044 272,675 272,675 472,675
33 78 2,010 106,172 106,172 306,172 297,564 297,564 497,564
34 79 2,010 107,261 107,261 307,261 324,379 324,379 524,379
35 80 2,010 107,053 107,053 307,053 353,346 353,346 553,346
36 81 2,010 105,212 105,212 305,212 384,663 384,663 584,663
37 82 2,010 101,316 101,316 301,316 418,375 418,375 618,375
38 83 2,010 94,849 94,849 294,849 454,630 454,630 654,630
39 84 2,010 85,216 85,216 285,216 493,494 493,494 693,494
40 85 2,010 71,810 71,810 271,810 535,013 535,013 735,013
41 86 2,010 53,960 53,960 253,960 579,490 579,490 779,490
42 87 2,010 30,949 30,949 230,949 626,410 626,410 826,410
43 88 2,010 1,961 1,961 201,961 676,057 676,057 876,057
44 89 2,010 LAPSED LAPSED LAPSED 728,816 728,816 928,816
45 90 2,010 785,389 785,389 985,389
46 91 2,010 847,840 847,840 1,047,840
47 92 2,010 915,739 915,739 1,115,739
48 93 2,010 988,015 988,015 1,188,015
49 94 2,010 1,065,753 1,065,753 1,265,753
50 95 2,010 1,149,401 1,149,401 1,349,401
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVESCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-43
[LOGO] MONY
LIFE INSURANCE ILLUSTRATION
MONY Variable Universal Life
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
Standard Ledger Statement continued
Guaranteed Charges Current Charges
----------------------------------------- -----------------------------
0.00% (-0.93% Net) 12.00% (11.07% Net) 12.00% (11.07% Net)
End
of Premium Cash Fund Death Cash Fund Death Cash Fund Death
Year Age Outlay Value Value Proceeds Value Value Proceeds Value Value Proceeds
51 96 2,010 1,240,768 1,240,768 1,440,768
52 97 2,010 1,339,648 1,339,648 1,539,648
53 98 2,010 1,445,578 1,445,578 1,645,578
54 99 2,010 1,560,483 1,560,483 1,760,483
55 100 2,010 1,685,284 1,685,284 1,885,284
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value. Loan interest at an
annual rate of 5.25% will be charged in arrears on new or outstanding loans
during the first 10 policy years. In policy years 11 and later, interest will
be charged at the annual rate of 4.75% in arrears. These loan interest rates
are guaranteed in the policy.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the
different investment rates of return for The Alger American Fund, Enterprise
Accumulation Trust, INVETCO Variable Investment Funds, Inc., Janus Aspen
Series, Lord Abbett Series Fund, MFS(R) Variable Insurance Trust/SM/, MONY
Series Fund, Inc., PBHG Insurance Series Fund, PIMCO Variable Insurance Trust,
or The Universal Institutional Funds, Inc. portfolios. The Cash Value, Fund
Value and Death Proceeds for a policy would be different from those shown if
the actual rates of investment return applicable to the policy averaged 0.00%
or 12.00% over a period of years, but also fluctuated above or below those
averages for individual policy years. No representations can be made by MONY
Life Insurance Company, The Alger American Fund, Enterprise Accumulation Trust,
INVESCO Variable Investment Funds, Inc., Janus Aspen Series, Lord Abbett Series
Fund, MFS(R) Variable Insurance Trust/SM/, MONY Series Fund, Inc., PBHG
Insurance Series Fund, PIMCO Variable Insurance Trust, or The Universal
Institutional Funds, Inc., that these hypothetical rates of return can be
achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared On: 10/11/2001
Specified Amount: $200,000 . Death Benefit Option: Specified Amount for Option
2 . TP: $2,010.00 . GPT Version 01.2002
Initial Modal Premium: $2,010.00 . Premium Mode: Annual . Riders: None Form #
C2-98
C-44
The complete registration statement and other filed documents for MONY
Variable Account L can be reviewed and copied at the Securities and Exchange
Commission's Public Reference Room in Washington, D.C. You may get information
on the operation of the public reference room by calling the Securities Exchange
Commission at 1-800-SEC-0330. The registration statement and other filed
documents for MONY Variable Account L are available on the Securities and
Exchange Commission's Internet site at http://www.sec.gov. You may get copies of
this information by paying a duplicating fee, and writing the Public Reference
Section of the Securities and Exchange Commission, Washington, D.C. 20549-6009.
PART II
(INFORMATION NOT REQUIRED IN A PROSPECTUS)
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and Reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority
conferred in that Section.
RULE 484 UNDERTAKING
The Amended and Restated By-Laws of MONY Life Insurance Company ("MONY")
provide, in Article XV as follows:
Each person (and the heirs, executors and administrators of such person)
made or threatened to be made a party to any action, civil or criminal, by
reason of being or having been a director, officer, or employee of the
corporation (or by reason of serving any other organization at the request
of the corporation) shall be indemnified to the extent permitted by the law
of the State of New York and in the manner prescribed therein. To this end,
and as authorized by Section 722 of the Business Corporation Law of the
State of New York, the Board may adopt all resolutions, authorize all
agreements and take all actions with respect to the indemnification of
directors and officers, and the advance payment of their expenses in
connection therewith.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification for
such liabilities (other than the payment by the Registrant of expense incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant, will (unless in the opinion of its counsel the
matter has been settled by controlling precedent) submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
REPRESENTATIONS RELATING TO SECTION 26 OF
THE INVESTMENT COMPANY ACT OF 1940
The Registrant and MONY Life Insurance Company represent that the fees and
charges deducted under the Contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by MONY Life Insurance Company.
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CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The Facing Sheet.
Cross-Reference to items required by Form N-8B-2.
Prospectus.
The Undertaking to file reports.
The signatures.
Written consents of the following persons:
a. PricewaterhouseCoopers LLP, Independent Accountants
b. Pamela Duffy, Vice President, Product Development, MONY Life Insurance
Company.
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as exhibits to Form N-8B2:
(1) Resolution of the Board of Trustees of The Mutual Life Insurance
Company of New York authorizing establishment of MONY Variable Account
L, filed as Exhibit 1 (1) to Pre-Effective Amendment No. 1 to
Registration Statement on Form S-6, dated December 17, 1990
(Registration Nos. 33-37719 and 811-6217), is incorporated herein by
reference.
(2) Not applicable.
(3) (a) Underwriting Agreement between The Mutual Life Insurance
Company of New York, MONY Series Fund, Inc., and MONY Securities Corp.,
filed as Exhibit 1 (3) (a) to Registration Statement on Form S-6, dated
November 9, 1990 (Registration Nos. 33-37719 and 811-6217), is
incorporated by referenced herein.
(b) Proposed specimen agreement between MONY Securities Corp. and
registered representatives, filed as Exhibit 3(b) of Pre-Effective
Amendment No. 1, dated December 17, 1990, to Registration Statement
on Form N-4 (Registration Nos. 33-37722 and 811-6126) is incorporated
herein by reference.
(c) Specimen commission schedule (Career Contract Schedule) filed
as Exhibit 1.(3)(c) to Pre-Effective Amendment No. 1 dated December
7, 2001 to Registration Statement on Form S-6 (Registration Nos.
333-72596 and 811-4235), is incorporated herein by reference.
(4) Not applicable.
(5) Specimen form of policy is filed herein as Exhibit 1.(5).
(6) Amended and Restated Charter and Amended and Restated By-Laws of
MONY Life Insurance Company, filed as Exhibit 1.(6) to Registration
Statement dated January 29, 1999 on Form S-6 (Registration Nos.
333-71417 and 811-6217) is incorporated herein by reference.
(7) Not applicable.
(8) (a) Form of agreement to purchase shares. (included in Exhibit
1.(5))
(b) Amended Investment Advisory Agreement between MONY Life
Insurance Company of America and MONY Series Fund, Inc. filed as
Exhibit 5(i) to Post-Effective amendment No. 14 to Registration
Statement (Registration Nos. 2-95501 and 811-4209) dated February 27,
1998, is incorporated herein by reference.
(c) Services Agreement between The Mutual Life Insurance Company
of New York and MONY Life Insurance Company of America filed as
Exhibit 5(ii) to Pre-Effective Amendment to Registration Statement
(Registration Nos. 2-95501 and 811-4209) dated July 19, 1985, is
incorporated herein by reference.
II-2
(d) Fund Participation Agreement among Enterprise Accumulation
Trust, MONY Life Insurance Company of America and MONY Life Insurance
Company, filed as Exhibit 8(a) to Post-Effective Amendment No. 7 to
Registration Statement on Form N-4 dated April 18, 2001 (Registration
Nos. 333-72259 and 811-6216), is incorporated herein by reference.
(e) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Retirement System Investors Inc., as sub-adviser, filed as Exhibit
(d)(iii) to Post-Effective Amendment No. 17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
(f) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
1740 Advisers, Inc., as sub-adviser, filed as Exhibit (d)(v) to
Post-Effective Amendment No. 17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
(g) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Marsico Capital Management, LLC, as sub-adviser, filed as Exhibit
(d)(vi) to Post-Effective Amendment No. 20 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated April 27, 2000.
(h) Investment Advisory Agreement between Enterprise Capital
Management, Inc., ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Montag & Caldwell, Inc., as sub-adviser, filed as Exhibit (d)(ii) to
Post-Effective Amendment No. 17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
(i) Investment Advisory Agreement between Enterprise Capital
Management, Inc., ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
TCW Investment Management Company, as sub-adviser, filed as Exhibit
(d)(iv) to Post-Effective Amendment No. 20 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated April 27, 2000.
(j) Investment Advisory Agreement between Enterprise Capital
Management, Inc., ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
William D. Witter, Inc., as sub-adviser, filed as Exhibit (d)(vii) to
Post-Effective Amendment No. #17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
(k) Investment Advisory Agreement between Enterprise Capital
Management, Inc., ("Enterprise Capital") and The Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
GAMCO Investors, Inc., as sub-adviser, filed as Exhibit (d)(viii) to
Post-Effective Amendment No. #17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
(l) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital" ) and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Vontobel USA Inc., as sub-adviser, filed as Exhibit (d)(ix) to
Post-Effective Amendment No. 17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 2000.
(m) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital" ) and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Caywood-Scholl Capital Management, as sub-adviser, filed as Exhibit
(d)(xi) to Post-Effective Amendment No. 17 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated May 3, 1999.
II-3
(n) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital" ) and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
OpCap Advisors, as sub-adviser, filed as Exhibit (d)(xv) to
Post-Effective Amendment No. 20 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated April 27, 2000.
(o) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital" ) and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Sanford C. Bernstein & Co., Inc., as sub-adviser, filed as Exhibit
(d)(xvi) to Post-Effective Amendment No. 20 to Registration Statement
(Registration Nos. 33-21534 and 811-05543) dated April 27, 2000.
(p) Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital" ) and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and
Fred Alger Management, Inc., as sub-adviser, filed as Exhibit
(d)(xiii) to Post-Effective Amendment No. 18 to Registration
Statement (Registration Nos. 33-21534 and 811-05543) dated May 28,
1999.
(9) Not applicable.
(10) Specimen application form for Flexible Premium Variable
Universal Life Insurance Policy is filed herein as Exhibit 1.(10).
(11) Code of Ethics for Operation of MONY Life Insurance Company and
its Subsidiaries, filed as Exhibit (11) to Post-Effective Amendment No.
12 to Registration Statement on Form S-6, dated February 27, 2001
(Registration Nos. 33-82570 and 811-4235) is incorporated herein by
reference.
2. Opinion and consent of Arthur D. Woods, Vice President-Variable
Products and Broker-Dealer Operations Counsel, MONY Life Insurance Company,
as to legality of the securities being registered filed as Exhibit 2 on
November 1, 2001 to Registration Statement (Registration Nos. 333-72590 and
811-6217) November 1, 2001 is incorporated herein by reference.
3. Not applicable.
4. Not applicable.
5. Consent of PricewaterhouseCoopers LLP as to financial statements of
MONY Life Insurance Company.
6. Opinion and consent of Pamela Duffy, as to actuarial matters.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
MONY Variable Account L of MONY Life Insurance Company, has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on this 7th day of December, 2001. Registrant hereby
certifies that the requirements of Rule 485 have been met.
MONY VARIABLE ACCOUNT L OF
MONY LIFE INSURANCE COMPANY
/s/ MICHAEL I. ROTH
By: _________________________________
Michael I. Roth, Director,
Chairman of
the Board, and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been duly
signed below by the following persons in the capacities and on the date
indicated.
Signature Date
--------- ----
/s/ MICHAEL I. ROTH December 7, 2001
- ---------------------------------------
Michael I. Roth
Director, Chairman and
Chief Executive Officer
/s/ SAMUEL J. FOTI December 7, 2001
- ---------------------------------------
Samuel J. Foti
Director, President and
Chief Operating Officer
/s/ KENNETH M. LEVINE December 7, 2001
- ---------------------------------------
Kenneth M. Levine
Director, Executive Vice President and
Chief Investment Officer
/s/ RICHARD DADDARIO December 7, 2001
- ---------------------------------------
Richard Daddario
Executive Vice President and
Chief Financial Officer
/s/ PHILLIP A. EISENBERG December 7, 2001
- ---------------------------------------
Phillip A. Eisenberg
Senior Vice President and Chief Actuary
/s/ LEE M. SMITH December 7, 2001
- ---------------------------------------
Lee M. Smith
Corporate Secretary and Vice President,
Government Relations
* December 7, 2001
- ---------------------------------------
Tom H. Barrett
Director
Signature Date
--------- ----
* December 7, 2001
---------------------
David L. Call
Director
* December 7, 2001
---------------------
G. Robert Durham
Director
* December 7, 2001
---------------------
James B. Farley
Director
* December 7, 2001
---------------------
Robert Holland, Jr.
Director
* December 7, 2001
---------------------
James L. Johnson
Director
December 7, 2001
---------------------
Frederick W. Kanner
Director
* December 7, 2001
---------------------
Robert R. Kiley
Director
* December 7, 2001
---------------------
Jane C. Pfeiffer
Director
* December 7, 2001
---------------------
Thomas C. Theobald
Director
*By: /s/ LEE M. SMITH December 7, 2001
---------------------
Lee M. Smith
Attorney In Fact
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1. (5) Specimen form of policy for Flexible Premium Variable Universal Life Insurance Policy.
1. (10) Specimen application form for Flexible Premium Variable Universal Life Insurance Policy.
5. Consent of PricewaterhouseCoopers LLP, Independent Accountants
6. Opinion and consent of Pamela Duffy, as to actuarial matters.
1