The Consultant Solutions Variable Annuities
(Classic, Plus, Elite, Select)
Lincoln Benefit Life Company
Street Address: 5801 SW 6th Ave. Topeka, KS 66606-0001
Mailing Address: P.O. Box 758561, Topeka, KS 66675-8561
Telephone Number: 800-457-7617 / Fax Number: 1-785-228-4584
1940 Act file number: 811-07924
1933 Act file number: 333-109688
Prospectus dated May 1, 2009
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Lincoln Benefit Life Company ("Lincoln Benefit") is the issuer of the following
individual and group flexible premium deferred variable annuity contracts
(each, a "Contract"):
. Consultant Solutions Classic
. Consultant Solutions Plus
. Consultant Solutions Elite
. Consultant Solutions Select
Effective November 30, 2006, this product is no longer being offered for sale.
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. Not all Contracts may be
available in all states or through your sales representative. Please check with
your sales representative for details.
Each Contract currently offers several investment alternatives ("Investment
Alternatives"). The Investment Alternatives include up to 2 fixed account
options ("Fixed Account Options"), depending on the Contract, and include 47
variable sub-accounts ("Variable Sub-accounts") of the Lincoln Benefit Life
Variable Annuity Account ("Variable Account"). Each Variable Sub-account
invests exclusively in shares of the following underlying funds ("Funds"):
AIM Variable Insurance Funds
PIMCO Variable Insurance Trust
The Alger American Fund
The Rydex Variable Trust
Fidelity(R) Variable Insurance
Products T. Rowe Price Equity Series, Inc.
Janus Aspen Series Van Eck Worldwide Insurance Trust
Legg Mason Partners Variable Equity Van Kampen Life Investment Trust
Trust
The Universal Institutional Funds,
Legg Mason Partners Variable Income Inc.
Trust
MFS(R) Variable Insurance Trust(SM)
Oppenheimer Variable Account Funds
Each Fund has multiple investment Portfolios ("Portfolios"). Not all of the
Funds and/or Portfolios, however, may be available with your Contract. You
should check with your sales representative for further information on the
availability of the Funds and/or Portfolios. Your annuity application will list
all available Portfolios.
For Consultant Solutions Plus Contracts, each time you make a purchase payment,
we will add to your Contract value ("Contract Value") a credit enhancement
("Credit Enhancement") of up to 5% (depending on the issue age and your total
purchase payments) of such purchase payment. Expenses for this Contract may be
higher than a Contract without the Credit Enhancement. Over time, the amount of
the Credit Enhancement may be more than offset by the fees associated with the
Credit Enhancement.
We (Lincoln Benefit) have filed a Statement of Additional Information, dated
May 1, 2009, with the Securities and Exchange Commission ("SEC"). It contains
more information about each Contract and is incorporated herein by reference,
which means that it is legally a part of this prospectus. Its table of contents
appears on page 74 of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
1 PROSPECTUS
IMPORTANT The Securities and Exchange Commission has not approved or disapproved the securities
NOTICES described in this prospectus, nor has it passed on the accuracy or the adequacy of this
prospectus. Anyone who tells you otherwise is committing a federal crime.
The Contracts may be distributed through broker-dealers that have relationships with
banks or other financial institutions or by employees of such banks. However, the
Contracts are not deposits in, or obligations of, or guaranteed or endorsed by, such
institutions or any federal regulatory agency. Investment in the Contracts involves
investment risks, including possible loss of principal.
The Contracts are not FDIC insured.
2 PROSPECTUS
Table of Contents
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Page
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Overview
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Important Terms 4
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Overview of Contracts 5
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The Contracts at a Glance 6
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How the Contracts Work 10
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Expense Tables 11
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Financial Information 15
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Contract Features
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The Contracts 15
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Purchases 17
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Contract Loans for 403(b) Contracts 19
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Contract Value 20
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Investment Alternatives 33
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The Variable Sub-accounts 33
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The Fixed Account Options 37
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Transfers 41
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Expenses 44
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Access to Your Money 49
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Page
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Income Payments 50
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Death Benefits 55
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Other Information
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More Information 62
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Taxes 65
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Annual Reports and Other Documents 73
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Statement of Additional Information Table of Contents 74
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Appendix A - Contract Comparison Chart 75
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Appendix B - Market Value Adjustment 76
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Appendix C - Example of Calculation of Income
Protection Benefit 78
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Appendix D - Withdrawal Adjustment Example - Death
Benefits 79
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Appendix E - Calculation of Enhanced Earnings Death
Benefit 80
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Appendix F - Withdrawal Adjustment Example -
Accumulation Benefit 82
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Appendix G - SureIncome Withdrawal Benefit Option
Calculation Examples 83
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Appendix H - Accumulation Unit Values 85
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3 PROSPECTUS
Important Terms
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This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
Page
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AB Factor 22
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Accumulation Benefit 22
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TrueReturn Accumulation Benefit Option 21
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Accumulation Phase 10
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Accumulation Unit 15
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Accumulation Unit Value 15
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Annual Increase Death Benefit Option 56
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Annuitant 16
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Automatic Additions Program 17
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Automatic Portfolio Rebalancing Program 43
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Beneficiary 16
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Benefit Base 22
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Benefit Payment 28
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Benefit Payment Remaining 28
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Benefit Year 28
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Co-Annuitant 16
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*Contract 15
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Contract Anniversary 7
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Contract Owner ("You") 15
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Contract Value 20
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Contract Year 7
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Credit Enhancement 18
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Dollar Cost Averaging Program 43
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Due Proof of Death 55
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Enhanced Earnings Death Benefit Option 57
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Excess of Earnings Withdrawal 58
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Fixed Account Options 37
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Free Withdrawal Amount 47
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Funds 1
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Guarantee Period Accounts 38
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Guarantee Options 21
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Income Plan 50
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Income Protection Benefit Option 53
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In-Force Earnings 58
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In-Force Premium 58
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Page
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Investment Alternatives 33
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IRA Contract 7
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Issue Date 10
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Lincoln Benefit ("We") 62
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Market Value Adjustment 40
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Maximum Anniversary Value (MAV) Death Benefit Option 56
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Payout Phase 10
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Payout Start Date 10
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Payout Withdrawal 52
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Portfolios 63
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Qualified Contract 61
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Return of Premium ("ROP") Death Benefit 56
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Rider Application Date 7
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Rider Anniversary 21
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Rider Date 21
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Rider Fee 7
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Rider Maturity Date 21
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Rider Period 21
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Rider Trade-In Option 27
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Right to Cancel 18
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SEC 1
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Settlement Value 56
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Spousal Protection Benefit (Co-Annuitant) Option 61
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Standard Fixed Account Option 38
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SureIncome Withdrawal Benefit Option 27
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Systematic Withdrawal Program 49
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Tax Qualified Contract 68
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Transfer Period Accounts 31
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Trial Examination Period 6
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TrueBalance/SM/ Asset Allocation Program 35
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Withdrawal Benefit Factor 28
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Withdrawal Benefit Payout Phase 29
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Withdrawal Benefit Payout Phase Start Date 29
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Valuation Date 18
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Variable Account 62
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Variable Sub-account 33
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* In certain states a Contract may be available only as a group Contract. If
you purchase a group Contract, we will issue you a certificate that represents
your ownership and that summarizes the provisions of the group Contract.
References to "Contract" in this prospectus include certificates, unless the
context requires otherwise. References to "Contract" also include all four
Contracts listed on the cover page of this prospectus, unless otherwise noted.
However, we administer each Contract separately.
4 PROSPECTUS
Overview of Contracts
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The Contracts offer many of the same basic features and benefits. They differ
primarily with respect to the charges imposed, as follows:
.. The Consultant Solutions Classic Contract has a mortality and expense risk
charge of 1.25%, an administrative expense charge of 0.10%*, and a
withdrawal charge of up to 7% with a 7-year withdrawal charge period;
.. The Consultant Solutions Plus Contract offers a Credit Enhancement of up to
5% on purchase payments, a mortality and expense risk charge of 1.45%, an
administrative expense charge of 0.10%*, and a withdrawal charge of up to
8.5% with an 8-year withdrawal charge period;
.. The Consultant Solutions Elite Contract has a mortality and expense risk
charge of 1.60%, an administrative expense charge of 0.10%*, and a
withdrawal charge of up to 7% with a 3-year withdrawal charge period; and
.. The Consultant Solutions Select Contract has a mortality and expense risk
charge of 1.70%, an administrative expense charge of 0.10%*, and no
withdrawal charges.
Other differences among the Contracts relate to available Fixed Account
Options. For a side-by-side comparison of these differences, please refer to
Appendix A of this prospectus.
* The administrative expense charge may be increased, but will never exceed
0.25%. Once your Contract is issued, we will not increase the administrative
expense charge for your Contract.
5 PROSPECTUS
The Contracts at a Glance
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The following is a snapshot of the Contracts. Please read the remainder of this
prospectus for more information.
Flexible Payments We are no longer offering new Contracts. You can add to your Contract
as often and as much as you like, but each subsequent payment must be at
least $1,000 ($100 for automatic payments).
We reserve the right to accept a lesser initial purchase payment amount for
each Contract. We may limit the cumulative amount of purchase payments to
a maximum of $1,000,000 in any Contract. You must maintain a minimum
Contract Value of $1,000.
For Consultant Solutions Plus Contracts, each time you make a purchase
payment, we will add to your Contract Value a Credit Enhancement of up to
5% of such purchase payment.
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Trial Examination Period You may cancel your Contract within 20 days of receipt or any longer period
as your state may require ("Trial Examination Period"). Upon cancellation,
we will return your purchase payments adjusted, to the extent federal or state
law permits, to reflect the investment experience of any amounts allocated to
the Variable Account, including the deduction of mortality and expense risk
charges and administrative expense charges. If you cancel your Contract
during the Trial Examination Period, the amount we refund to you will not
include any Credit Enhancement. See "Trial Examination Period" for details.
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Expenses Each Portfolio pays expenses that you will bear indirectly if you invest in a
Variable Sub-account. You also will bear the following expenses:
Consultant Solutions Classic Contracts
. Annual mortality and expense risk charge equal to 1.25% of average
daily net assets.
. Withdrawal charges ranging from 0% to 7% of purchase payments
withdrawn.
Consultant Solutions Plus Contracts
. Annual mortality and expense risk charge equal to 1.45% of average
daily net assets.
. Withdrawal charges ranging from 0% to 8.5% of purchase payments
withdrawn.
Consultant Solutions Elite Contracts
. Annual mortality and expense risk charge equal to 1.60% of average
daily net assets.
. Withdrawal charges ranging from 0% to 7% of purchase payments
withdrawn.
Consultant Solutions Select Contracts
. Annual mortality and expense risk charge equal to 1.70% of average
daily net assets.
. No withdrawal charges.
6 PROSPECTUS
All Contracts
. Annual administrative expense charge of 0.10% average daily net assets (up
to 0.25% for future Contracts).
. Annual contract maintenance charge of $40 (reduced to $30 if Contract
Value is at least $2000, and waived in certain cases).
. If you select the Maximum Anniversary Value (MAV) Enhanced Death
Benefit Option ("MAV Death Benefit Option") you will pay an additional
mortality and expense risk charge of 0.20% (up to 0.50% for Options
added in the future).
. If you select the Annual Increase Enhanced Death Benefit Option
("Annual Increase Death Benefit Option"), you will pay an additional
mortality and expense risk charge of 0.30% (up to 0.50% for options added
in the future).
. If you select the Enhanced Earnings Death Benefit Option you will pay an
additional mortality and expense risk charge of 0.25% or 0.40% (up to
0.35% or 0.50% for Options added in the future) depending on the age of
the oldest Owner, the Co-Annuitant, and/or oldest Annuitant on the date
we receive the completed application or request to add the benefit,
whichever is later ("Rider Application Date").
. If you select the TrueReturn Accumulation Benefit Option you would pay
an additional annual fee ("Rider Fee") of 0.50% (up to 1.25% for Options
added in the future) of the Benefit Base in effect on each Contract
anniversary ("Contract Anniversary") during the Rider Period. You may
not select the TrueReturn Accumulation Benefit Option together with the
SureIncome Withdrawal Benefit Option.
. If you select the SureIncome Withdrawal Benefit Option ("SureIncome
Option") you would pay an additional annual fee ("SureIncome Option
Fee") of 0.50% (up to 1.25% for Options added in the future) of the
Benefit Base on each Contract Anniversary (See the SureIncome Option
Fee section). You may not select the SureIncome Option together with the
TrueReturn Accumulation Benefit Option.
. If you select the Income Protection Benefit Option you will pay an
additional mortality and expense risk charge of 0.50% (up to 0.75% for
Options added in the future) during the Payout Phase of your Contract.
. If you select the Spousal Protection Benefit (Co-Annuitant) Option you
would pay an additional annual fee ("Rider Fee") of 0.10% (up to 0.15%
for Options added in the future) of the Contract Value ("Contract Value")
on each Contract Anniversary. This Option is available only for Individual
Retirement Annuity ("IRA") Contracts qualified under Section 408 of the
Internal Revenue Code. For Contracts purchased on or after May 1, 2005,
we may discontinue offering the Spousal Protection Benefit
(Co-Annuitant) Option at any time. No Rider Fee is charged for the
Spousal Protection Benefit (Co-Annuitant) Option for Contract
Owners who added the Option prior to May 1, 2005.
. Transfer fee equal to 1.00% (subject to increase to up to 2.00%) of the
amount transferred after the 12/th/ transfer in any Contract Year ("Contract
Year"), but not more than $25. A Contract Year is measured from the date
we issue your Contract or a Contract Anniversary.
. State premium tax (if your state imposes one)
. Not all Options are available in all states
. We may discontinue offering any of these Options at any time.
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7 PROSPECTUS
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Investment Alternatives Each Contract offers several investment alternatives including:
. up to 2 Fixed Account Options that credit interest at rates we guarantee,
and
. 47 Variable Sub-accounts investing in Portfolios offering professional
money management by these investment advisers:
. Invesco A I M Advisors, Inc.
. Fred Alger Management, Inc.
. Fidelity Management & Research Company
. Janus Capital Management LLC
. MFS(TM) Investment Management
. OppenheimerFunds, Inc.
. Pacific Investment Management Company LLC
. Rydex Investments
. Legg Mason Partners Fund Advisor, LLC
. T. Rowe Price Associates, Inc.
. Van Eck Associates Corporation
. Van Kampen Asset Management
. Morgan Stanley Investment Management, Inc./(1)/
(1) Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
Not all Fixed Account Options are available in all states or with all Contracts.
To find out current rates being paid on the Fixed Account Option(s), or to
find out how the Variable Sub-accounts have performed, please call us at
800-457-7617.
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Special Services For your convenience, we offer these special services:
. Automatic Portfolio Rebalancing Program
. Automatic Additions Program
. Dollar Cost Averaging Program
. Systematic Withdrawal Program
. TrueBalance/SM/ Asset Allocation Program
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Income Payments You can choose fixed income payments, variable income payments, or a
combination of the two. You can receive your income payments in one of the
following ways (you may select more than one income plan):
. life income with guaranteed number of payments
. joint and survivor life income with guaranteed number of payments
. guaranteed number of payments for a specified period
. life income with cash refund
. joint life income with cash refund
. life income with installment refund
. joint life income with installment refund
In addition, we offer an Income Protection Benefit Option that guarantees
that your variable income payments will not fall below a certain level.
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8 PROSPECTUS
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Death Benefits If you die before the Payout Start Date, we will pay a death benefit subject to
the conditions described in the Contract. In addition to the death benefit
included in your Contract ("ROP Death Benefit"), the death benefit options
we currently offer include:
. MAV Death Benefit Option;
. Annual Increase Death Benefit Option; and
. Enhanced Earnings Death Benefit Option.
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Transfers Before the Payout Start Date, you may transfer your Contract Value among
the investment alternatives, with certain restrictions. The minimum amount
you may transfer is $100 or the amount remaining in the investment
alternative, if less. The minimum amount that can be transferred into the
Standard Fixed Account or Market Value Adjusted Account Options is $100.
A charge may apply after the 12/th/ transfer in each Contract Year.
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Withdrawals You may withdraw some or all of your Contract Value at any time during the
Accumulation Phase and during the Payout Phase in certain cases. In general,
you must withdraw at least $50 at a time. If any withdrawal reduces your
Contract Value to less than $1,000, we will treat the request as a withdrawal
of the entire Contract Value, unless the SureIncome Withdrawal Benefit
Option is in effect under your Contract. Withdrawals taken prior to
annuitization (referred to in this prospectus as the Payout Phase) are
generally considered to come from the earnings in the Contract first. If the
Contract is tax-qualified, generally all withdrawals are treated as distributions
of earnings. Withdrawals of earnings are taxed as ordinary income and, if
taken prior to age 59 1/2, may be subject to an additional 10% federal tax
penalty. A withdrawal charge and a Market Value Adjustment may
also apply.
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9 PROSPECTUS
How the Contracts Work
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Each Contract basically works in two ways.
First, each Contract can help you (we assume you are the "Contract Owner") save
for retirement because you can invest in your Contract's investment
alternatives and generally pay no federal income taxes on any earnings until
you withdraw them. You do this during what we call the "Accumulation Phase" of
the Contract. The Accumulation Phase begins on the date we issue your Contract
(we call that date the "Issue Date") and continues until the Payout Start Date,
which is the date we apply your money to provide income payments. During the
Accumulation Phase, you may allocate your purchase payments to any combination
of the Variable Sub-Accounts and/or Fixed Account Options. If you invest in a
Fixed Account Option, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your
investment return will vary up or down depending on the performance of the
corresponding Portfolios.
Second, each Contract can help you plan for retirement because you can use it
to receive retirement income for life and/or for a pre-set number of years, by
selecting one of the income payment options (we call these "Income Plans")
described on 50. You receive income payments during what we call the "Payout
Phase" of the Contract, which begins on the Payout Start Date and continues
until we make the last payment required by the Income Plan you select. During
the Payout Phase, if you select a fixed income payment option, we guarantee the
amount of your payments, which will remain fixed. If you select a variable
income payment option, based on one or more of the Variable Sub-Accounts, the
amount of your payments will vary up or down depending on the performance of
the corresponding Portfolios. The amount of money you accumulate under your
Contract during the Accumulation Phase and apply to an Income Plan will
determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
[FLOW CHART]
Other income payment options are also available. See "Income Payments."
As the Contract Owner, you exercise all of the rights and privileges provided
by the Contract. If you die, any surviving Contract Owner or, if there is none,
the Beneficiary will exercise the rights and privileges provided by the
Contract. See "The Contracts." In addition, if you die before the Payout Start
Date, we will pay a death benefit to any surviving Contract Owner or, if there
is none, to your Beneficiary. See "Death Benefits."
Please call us at 800-457-7617 if you have any question about how the Contracts
work.
10 PROSPECTUS
Expense Tables
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The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the prospectuses for the
Portfolios.
Contract Owner Transaction Expenses
Withdrawal Charge (as a percentage of purchase payments withdrawn)*
Number of Complete Years Since We Received the Purchase Payment
Being Withdrawn/Applicable Charge:
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Contract: 0 1 2 3 4 5 6 7 8+
Consultant Solutions Classic 7% 7% 6% 5% 4% 3% 2% 0% 0%
Consultant Solutions Plus 8.5% 8.5% 8.5% 7.5% 6.5% 5.5% 4% 2.5% 0%
Consultant Solutions Elite: 7% 6% 5% 0% 0% 0% 0% 0% 0%
Consultant Solutions Select: None
All Contracts:
Annual Contract Maintenance Charge $40**
Transfer Fee up to 2.00% of the amount transferred, but not more than $25***
Premium Taxes 0% to 4.00% of Purchase Payment****
Loan Interest Rate 7.25%*****
* Each Contract Year, you may withdraw a portion of your purchase payments
(and/or your earnings, in the case of Charitable Remainder Trusts) without
incurring a withdrawal charge ("Free Withdrawal Amount"). See "Withdrawal
Charges" for more information.
** Reduced to $30 if Contract Value is not less than $2000, and waived in
certain cases. See "Expenses."
*** Applies solely to the 13th and subsequent transfers within a Contract Year,
excluding transfers due to dollar cost averaging and automatic portfolio
rebalancing. We are currently assessing a transfer fee of 1.00% of the amount
transferred, however, we reserve the right to raise the transfer fee to up to
2.00% of the amount transferred. The transfer fee will never be greater than
$25.
**** Some States charge premium taxes that generally range from 0 to 4%. We are
responsible for paying these taxes, and will deduct them from your Contract
Value. Our current practice is to not charge for these taxes until the Payout
Start Date or surrender of the Contract. See "Premium Taxes" for more
information.
***** For more information, see "Contract Loans for 403(b) Contracts." The loan
interest rate is subject to change.
Variable Account Annual Expenses (as a percentage of average daily net asset
value deducted from each Variable Sub-account)
If you select the basic Contract without any optional benefits, your Variable
Account expenses would be as follows:
Mortality and Expense Administrative Total Variable Account
Basic Contract (without any optional benefit) Risk Charge Expense Charge* Annual Expense
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Consultant Solutions Classic 1.25% 0.10% 1.35%
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Consultant Solutions Plus 1.45% 0.10% 1.55%
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Consultant Solutions Elite 1.60% 0.10% 1.70%
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Consultant Solutions Select 1.70% 0.10% 1.80%
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* We reserve the right to raise the administrative expense charge to 0.25%. If
we increase this charge, we will amend the prospectus, accordingly. However, we
will not increase the charge once we issue your Contract.
Each Contract also offers optional riders that may be added to the Contract.
For each optional rider you select, you would pay the following additional
mortality and expense risk charge associated with each rider.
MAV Death Benefit Option Currently 0.20%, up to a maximum of
0.50% for Options added in the future
*
Annual Increase Death Benefit Option Currently 0.30%, up to a maximum of
0.50% for Options added in the future
*
Enhanced Earnings Death Benefit Currently 0.25%, up to a maximum of
Option (issue age 0-70) 0.35% for Options added in the future
*
Enhanced Earnings Death Benefit Currently 0.40%, up to a maximum of
Option (issue age 71-79) 0.50% for Options added in the future
*
11 PROSPECTUS
If you select the Options with the highest possible combination of mortality
and expense risk charges during the Accumulation Phase, your Variable Account
expenses would be as follows, assuming current expenses:
Contract with the MAV Death Benefit Option,
Annual Increase Death Benefit Option, and Mortality and Expense Administrative Total Variable Account
Enhanced Earnings Death Benefit Option (issue age 71-79) Risk Charge* Expense Charge* Annual Expense
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Consultant Solutions Classic 2.15% 0.10% 2.25%
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Consultant Solutions Plus 2.35% 0.10% 2.45%
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Consultant Solutions Elite 2.50% 0.10% 2.60%
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Consultant Solutions Select 2.60% 0.10% 2.70%
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* As described above the administrative expense charge and the mortality and
expense charge for certain Options may be higher in the future if you add this
Option to your Contract. However, we will not increase the administrative
expense charge once we issue your Contract, and we will not increase the charge
for an Option once we add the Option to your Contract. If we increase any of
these charges, we will amend the prospectus, accordingly.
TrueReturn Accumulation Benefit Option Annual Fee
(annual rate as a percentage of Benefit Base on a Contract Anniversary)
TrueReturn Accumulation Benefit Option Currently 0.50%, up to a
maximum of 1.25% for
Options added in the
future. *
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* If we increase this charge, we will amend the prospectus, accordingly. See
"TrueReturn Accumulation Benefit Option" for details.
Spousal Protection Benefit (Co-Annuitant) Option Annual Fee
(annual rate as a percentage of Contract Value on a Contract Anniversary)
Spousal Protection Benefit (Co-Annuitant) Option Currently 0.10%, up to a
maximum of 0.15% for
Options added in the
future *
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* For Options added on or after 5/1/2005. If we increase this charge, we will
amend the prospectus, accordingly. See "Spousal Protection Benefit
(Co-Annuitant) Option" for details.
SureIncome Option Fee
(annual rate as a percentage of Benefit Base on a Contract Anniversary)
SureIncome Withdrawal Benefit Option Currently 0.50%, up to a
maximum of 1.25% for
SureIncome Options
added in the future *
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* If we increase this charge, we will amend the prospectus, accordingly. See
"SureIncome Withdrawal Benefit Option" for details.
Income Protection Benefit Option Fee (Payout Phase only)*
(as a percentage of average daily net assets)
Income Protection Benefit Option Currently 0.50%, up to a
maximum of 1.25% for
Options added in the
future*
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* See "Income Payments - Income Protection Benefit Option," below, for a
description of the Income Protection Benefit Option. You may add this Option
when you elect to receive annuity benefits. We begin to deduct the charge for
this Option on the Payout Start Date. Currently, the charge for this Option is
0.50% of the average daily net Variable Account assets supporting the variable
income payments to which the Income Protection Benefit Option applies. We will
charge you the Option charge in effect when you choose to apply this Option to
your Contract. We reserve the right to raise the Income Protection Benefit
Option charge to up to 0.75%. If we increase this charge, we will amend the
prospectus accordingly. Once your Income Protection Benefit Option is in
effect, however, we will not change the option charge you will pay for this
Option. See "Expenses - Mortality and Expense Risk Charge," below, for details.
12 PROSPECTUS
Portfolio Annual Expenses - Minimum and Maximum
The next table shows the minimum and maximum total operating expenses charged
by the Portfolios that you may pay periodically during the time that you own
the Contract. Advisors and/or other service providers of certain Portfolios may
have agreed to waive their fees and/or reimburse Portfolio expenses in order to
keep the Portfolios' expenses below specified limits. The range of expenses
shown in this table does not show the effect of any such fee waiver or expense
reimbursement. More detail concerning each Portfolio's fees and expenses
appears in the second table below and in the prospectus for each Portfolio.
Minimum Maximum
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Total Annual Portfolio Operating Expenses/(1)/ (expenses
that are deducted from Portfolio assets, which may include
management fees, distribution and/or services (12b-1) fees,
and other expenses) 0.35% 3.38%
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(1)Expenses are shown as a percentage of Portfolio average daily net assets
(before any waiver or reimbursement) as of December 31, 2008.
Example 1
This Example is intended to help you compare the cost of investing in the
Contracts with the cost of investing in other variable annuity contracts. These
costs include Contract owner transaction expenses, Contract fees, Variable
Account annual expenses, and Portfolio fees and expenses.
The example shows the dollar amount of expenses that you would bear directly or
indirectly if you:
.. invested $10,000 in the Contract for the time periods indicated;
.. earned a 5% annual return on your investment;
.. surrendered your Contract, or you began receiving income payments for a
specified period of less than 120 months, at the end of each time period;
.. elected the MAV Death Benefit Option and the Annual Increase Death Benefit
Option;
.. elected the Enhanced Earnings Death Benefit Option (assuming issue age
71-79);
.. elected the Spousal Protection Benefit (Co-Annuitant) Option; and
.. elected the TrueReturn Accumulation Benefit Option or SureIncome Withdrawal
Benefit Option.
The example does not include any taxes or tax penalties you may be required to
pay if you surrender your Contract.
The first line of the example assumes that the maximum fees and expenses of any
of the Portfolios are charged. The second line of the example assumes that the
minimum fees and expenses of any of the Portfolios are charged. Your actual
expenses may be higher or lower than those shown below.
Consultant Solutions Classic Consultant Solutions Plus
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
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Costs Based on Maximum
Annual Portfolio Expenses $1,262 $2,396 $3,492 $6,238 $1,410 $2,665 $3,791 $6,376
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Costs Based on Minimum
Annual Portfolio Expenses $ 952 $1,507 $2,079 $3,756 $1,100 $1,780 $2,390 $3,945
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Consultant Solutions Elite Consultant Solutions Select
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
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Costs Based on Maximum
Annual Portfolio Expenses $1,213 $2,070 $3,389 $6,477 $ 713 $2,098 $3,431 $6,544
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Costs Based on Minimum
Annual Portfolio Expenses $ 902 $1,188 $1,997 $4,084 $ 403 $1,218 $2,046 $4,175
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13 PROSPECTUS
Example 2
This Example uses the same assumptions as Example 1 above, except that it
assumes you decided not to surrender your Contract, or you began receiving
income payments for a specified period of at least 120 months, at the end of
each time period.
Consultant Solutions Classic Consultant Solutions Plus
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio Expenses $667 $1,971 $3,237 $6,238 $687 $2,028 $3,324 $6,376
- ------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio Expenses $357 $1,082 $1,824 $3,756 $377 $1,142 $1,923 $3,945
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Consultant Solutions Elite Consultant Solutions Select
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------
Costs Based on Maximum
Annual Portfolio Expenses $703 $2,070 $3,389 $6,477 $713 $2,098 $3,431 $6,544
- ------------------------------------------------------------------------------------------
Costs Based on Minimum
Annual Portfolio Expenses $392 $1,188 $1,997 $4,084 $403 $1,218 $2,046 $4,175
- ------------------------------------------------------------------------------------------
Please remember that you are looking at examples and not a representation of
past or future expenses. Your rate of return may be higher or lower than 5%,
which is not guaranteed. The examples do not assume that any Portfolio expense
waivers or reimbursement arrangements are in effect for the periods presented.
The examples reflect the Free Withdrawal Amounts, if applicable, and the
deduction of the annual contract maintenance charge of $30 each year. The above
examples assume you have selected the MAV Death Benefit Option, the Annual
Increase Death Benefit Option, the Enhanced Earnings Death Benefit Option
(assuming the oldest Contract Owner and Co-Annuitant, or, if the Contract Owner
is a non-living person, the oldest Annuitant, are age 71 or older, and all are
age 79 or younger on the Rider Application Date), the Spousal Protection
Benefit (Co-Annuitant) Option, and the TrueReturn Accumulation Benefit Option
or SureIncome Withdrawal Benefit Option. If any or all of these features were
not elected, the expense figures shown above would be slightly lower.
14 PROSPECTUS
Financial Information
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To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "Accumulation Unit Value." Accumulation Unit Value is analogous to, but
not the same as, the share price of a mutual fund.
Accumulation Unit Values for the lowest and highest available combinations of
Contract charges that affect Accumulation Unit Values for each Contract are
shown in Appendix H of this prospectus. The Statement of Additional Information
contains the Accumulation Unit Values for all other available combinations of
Contract charges that affect Accumulation Unit Values for each Contract. The
financial statements of Lincoln Benefit and the financial statements of the
Variable Account, which are comprised of the financial statements of the
underlying sub-accounts, appear in the Statement of Additional Information.
The Contracts
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CONTRACT OWNER
Each Contract is an agreement between you, the Contract Owner, and Lincoln
Benefit, a life insurance company. As the Contract Owner, you may exercise all
of the rights and privileges provided to you by the Contract. That means it is
up to you to select or change (to the extent permitted):
.. the investment alternatives during the Accumulation and Payout Phases,
.. the amount and timing of your purchase payments and withdrawals,
.. the programs you want to use to invest or withdraw money,
.. the income payment plan(s) you want to use to receive retirement income,
.. the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
.. the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract Owner dies, or, if the
Contract Owner is a non-living person, an Annuitant dies, and
.. any other rights that the Contract provides, including restricting income
payments to Beneficiaries.
If you die prior to the Payout Start Date, any surviving joint Contract Owner,
or, if none, the Beneficiary, may exercise the rights and privileges provided
to them by the Contract. If the sole surviving Contract Owner dies after the
Payout Start Date, the Primary Beneficiary will receive any guaranteed income
payments scheduled to continue.
If the Annuitant dies prior to the Payout Start Date and the Contract Owner is
a non-living person, we will pay the death benefit to the current Contract
Owner.
The Contract cannot be jointly owned by both a living and a non-living person.
The Consultant Solutions Select is not available for purchase by non-living
persons. The maximum age of any Contract Owner on the date we receive the
completed application for each Contract is 90.
If you select the MAV Death Benefit Option, the Annual Increase Death Benefit
Option, or the Enhanced Earnings Death Benefit Option, the maximum age of any
Contract Owner on the Rider Application Date is currently 79. If you select the
Spousal Protection Benefit (Co-Annuitant) Option, the maximum age of any
Contract Owner on the Rider Application Date is currently age 90. If you select
the SureIncome Withdrawal Benefit Option, the maximum age of any Contract Owner
on the Rider Application Date is currently age 85.
The Contract can also be purchased as an IRA or TSA (also known as a 403(b)).
The endorsements required to qualify these annuities under the Code may limit
or modify your rights and privileges under the Contract. We use the term
"Qualified Contract" to refer to a Contract issued as an IRA, 403(b), or with a
Qualified Plan.
Except for certain Qualified Contracts, you may change the Contract Owner at
any time by written notice in a form satisfactory to us. Until we receive your
written notice to change the Contract Owner, we are entitled to rely on the
most recent information in our files. We will provide a change of ownership
form to be signed by you and filed with us. Once we accept the change, the
change will take effect as of the date you signed the request. We will not be
liable for any payment or settlement made prior to accepting the change.
Accordingly, if you wish to change the Contract Owner, you should deliver your
written notice to us promptly. Each change is subject to any payment we make or
other action we take before we accept it. Changing ownership of this Contract
may cause adverse tax consequences and may not be allowed under Qualified
Contracts. Please consult with a competent tax advisor prior to making a
request for a change of Contract Owner.
15 PROSPECTUS
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments
(other than under Income Plan 3). If the Contract is a Non-Qualified Contract,
you also may designate a joint Annuitant, who is a second person on whose life
income payments depend. Additional restrictions may apply in the case of
Qualified Plans. The maximum age of the Annuitant on the date we receive the
completed application for each Contract is 90.
If the Owner is a living person, the Owner may change the Annuitant before the
Payout Start Date by written request in a form satisfactory to us. Once we
accept a change, it takes effect on the date you signed the request. Each
change is subject to any payment we make or other action we take before we
accept it.
If you select the MAV Death Benefit Option, Annual Increase Death Benefit
Option, or Enhanced Earnings Death Benefit Option, the maximum age of any
Annuitant on the Rider Application Date is 79.
If you select the Spousal Protection Benefit (Co-Annuitant) Option, the maximum
age of any Annuitant on the Rider Application date is age 90. If you select the
Income Protection Benefit Option, the oldest Annuitant and joint Annuitant (if
applicable) must be age 75 or younger on the Payout Start Date. If you select
the SureIncome Withdrawal Benefit Option, the maximum age of any Annuitant on
the Rider Application Date is currently age 85.
If you select an Income Plan that depends on the Annuitant or a joint
Annuitant's life, we may require proof of age and sex before income payments
begin and proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
CO-ANNUITANT
Contract Owners of IRA Contracts that meet the following conditions and that
elect the Spousal Protection Benefit Option must name their spouse as a
Co-Annuitant:
.. the individually owned Contract must be either a traditional, Roth or
Simplified Employee Pension IRA;
.. the Contract Owner must be age 90 or younger on the Rider Application Date;
.. and the Co-Annuitant must be age 79 or younger on the Rider Application
Date; and
.. the Co-Annuitant must be the sole Primary Beneficiary under the Contract.
Under the Spousal Protection Benefit Option, the Co-Annuitant will be
considered to be an Annuitant during the Accumulation Phase, except the
Co-Annuitant will not be considered to be an Annuitant for purposes of
determining the Payout Start Date and the "Death of Annuitant" provision of
your Contract does not apply upon the death of the Co-Annuitant. If you are
single when you purchase this Contract, and are married later, you may add the
Spousal Protection Benefit Option within six months of your marriage only if
you provide proof of marriage in a form satisfactory to us. You may change the
Co-Annuitant to a new spouse within six months of re-marriage only if you
provide proof of remarriage in a form satisfactory to us. At any time, there
may only be one Co-Annuitant under your Contract. The Co-Annuitant will be
considered an Owner for the purposes of determining the age or birthday of the
Owners under the MAV Death Benefit Option, the Annual Increase Death Benefit
Option and the Enhanced Earnings Death Benefit Option. See "Spousal Protection
Benefit Option and Death of Co-Annuitant" for more information.
BENEFICIARY
You may name one or more Primary and Contingent Beneficiaries when you apply
for a Contract. The Primary Beneficiary is the person who may, in accordance
with the terms of the Contract, elect to receive the death settlement ("Death
Proceeds") or become the new Contract Owner pursuant to the Contract if the
sole surviving Contract Owner dies before the Payout Start Date. If the sole
surviving Contract Owner dies after the Payout Start Date, the Beneficiary will
receive any guaranteed income payments scheduled to continue. A Contingent
Beneficiary is the person selected by the Contract Owner who will exercise the
rights of the Primary Beneficiary if all named Primary Beneficiaries die before
the death of the sole surviving Contract Owner.
You may change or add Beneficiaries at any time, unless you have designated an
irrevocable Beneficiary. We will provide a change of Beneficiary form to be
signed by you and filed with us. After we accept the form, the change of
Beneficiary will be effective as of the date you signed the form. Until we
accept your written notice to change a Beneficiary, we are entitled to rely on
the most recent Beneficiary information in our files. We will not be liable for
any payment or settlement made prior to accepting the change. Accordingly, if
you wish to change your Beneficiary, you should deliver your written notice to
us promptly. Each Beneficiary change is subject to any payment made by us or
any other action we take before we accept the change.
You may restrict income payments to Beneficiaries. We will provide a form to be
signed by you and filed with us. Once we accept the form, the restriction will
take effect as of the date you signed the request. Any restriction is subject
to any payment made by us or any other action we take before we accept the
request.
If you did not name a Beneficiary or, unless otherwise provided in the
Beneficiary designation, if a named Beneficiary is no longer living and there
are no other surviving Primary or Contingent Beneficiaries when the
16 PROSPECTUS
sole surviving Contract Owner dies, the new Beneficiary will be:
.. your spouse or, if he or she is no longer living,
.. your surviving children equally, or if you have no surviving children,
.. your estate.
If more than one Beneficiary survives you, we will divide the death benefit
among the surviving Beneficiaries according to your most recent written
instructions. If you have not given us written instructions in a form
satisfactory to us, we will pay the death benefit in equal amounts to the
surviving Beneficiaries. If there is more than one Beneficiary in a class
(e.g., more than one Primary Beneficiary) and one of the Beneficiaries
predeceases the Contract Owner (the Annuitant if the Contract owner is not a
living person), the remaining Beneficiaries in that class will divide the
deceased Beneficiary's share in proportion to the original share of the
remaining Beneficiaries.
For purposes of this Contract, in determining whether a living person,
including a Contract Owner, Primary Beneficiary, Contingent Beneficiary, or
Annuitant ("Living Person A") has survived another living person, including a
Contract Owner, Primary Beneficiary, Contingent Beneficiary, or Annuitant
("Living Person B"), Living Person A must survive Living Person B by at least
24 hours. Otherwise, Living Person A will be conclusively deemed to have
predeceased Living Person B.
Where there are multiple Beneficiaries, we will only value the death proceeds
at the time the first Beneficiary submits the necessary documentation in good
order. Any death proceed amounts attributable to any Beneficiary which remain
in the Variable Sub-accounts are subject to investment risk. If there is more
than one Beneficiary taking shares of the death proceeds, each Beneficiary will
be treated as a separate and independent owner of his or her respective share
of the death proceeds. Each Beneficiary will exercise all rights related to his
or her share of the death proceeds, including the sole right to select a death
settlement option, subject to any restrictions previously placed upon the
Beneficiary. Each Beneficiary may designate a Beneficiary(ies) for his or her
respective share, but that designated Beneficiary(ies) will be restricted to
the death settlement option chosen by the original Beneficiary.
If there is more than one Beneficiary and one of the Beneficiaries is a
corporation, trust or other non-living person, all Beneficiaries will be
considered to be non-living persons.
MODIFICATION OF THE CONTRACT
Only a Lincoln Benefit officer may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents
has the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law. If a provision of the
Contract is inconsistent with state law, we will follow state law.
ASSIGNMENT
You may not assign an interest in this Contract as collateral or security for a
loan. However, you may assign periodic income payments under this Contract
prior to the Payout Start Date. No Beneficiary may assign benefits under the
Contract until they are due. We will not be bound by any assignment until the
assignor signs it and files it with us. We are not responsible for the validity
of any assignment. Federal law prohibits or restricts the assignment of
benefits under many types of retirement plans and the terms of such plans may
themselves contain restrictions on assignments. An assignment may also result
in taxes or tax penalties. You should consult with an attorney before trying to
assign periodic income payments under your Contract.
Purchases
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MINIMUM PURCHASE PAYMENTS
The minimum initial purchase payment for Classic Contracts is $1,200 (Qualified
or Non-Qualified Contracts); the minimum initial purchase payment for all other
Non-Qualified Contracts is $10,000, ($2,000 for Qualified Contracts). All
subsequent purchase payments under a Contract must be $1,000 or more ($100 for
automatic payments). For Consultant Solutions Plus Contracts, purchase payments
do not include any Credit Enhancements. You may make purchase payments at any
time prior to the Payout Start Date; however, any additional payments after the
initial purchase payment may be limited in some states. Please consult with
your representative for details. The total amount of purchase payments we will
accept for each Contract without our prior approval is $1,000,000. We reserve
the right to accept a lesser initial purchase payment amount or lesser
subsequent purchase payment amounts. We reserve the right to limit the
availability of the investment alternatives for additional investments. We also
reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $100 or more per month by
automatically transferring money from your bank account. Please consult with
your sales representative for detailed information. The Automatic Additions
Program is not available for making purchase payments into the Dollar Cost
Averaging Fixed Account Option.
17 PROSPECTUS
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling 1-800-457-7617.
We will allocate your purchase payments to the investment alternatives
according to your most recent instructions on file with us. Unless you notify
us otherwise, we will allocate subsequent purchase payments according to the
allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
For Consultant Solutions Select Contracts, the maximum amount that can be
allocated during any single day to certain selected funds is $25,000. Please
see the current list of funds affected by this restriction on page 25.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the
payment at our home office. If your application is incomplete, we will ask you
to complete your application within 5 business days. If you do so, we will
credit your initial purchase payment to your Contract within that 5 business
day period. If you do not, we will return your purchase payment at the end of
the 5 business day period unless you expressly allow us to hold it until you
complete the application. We will credit subsequent purchase payments to the
Contract at the close of the business day on which we receive the purchase
payment at our home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days
as "Valuation Dates." Our business day closes when the New York Stock Exchange
closes for regular trading, usually 4:00 p.m. Eastern Time (3:00 p.m. Central
Time). If we receive your purchase payment after 3:00 p.m. Central Time on any
Valuation Date, we will credit your purchase payment using the Accumulation
Unit Values computed for the next Valuation Date.
CREDIT ENHANCEMENT
For Consultant Solutions Plus Contracts, each time you make a purchase payment,
we will add to your Contract Value a Credit Enhancement equal to 4% of the
purchase payment if the oldest Contract Owner, or, if the Contract Owner is a
non-living person, the oldest Annuitant, is age 85 or younger on the date we
receive the completed application for the Contract ("Application Date"). If the
oldest Contract Owner or, if the Owner is a non-living person, the oldest
Annuitant is age 86 or older and 90 or younger on the Application Date, we will
add to your Contract Value a Credit Enhancement equal to 2% of the purchase
payment. The thresholds apply individually to each Consultant Solutions Plus
Contract you own. The additional Credit Enhancements and their corresponding
thresholds are as follows:
Additional Credit Cumulative Purchase
Enhancement for Large Payments less Cumulative
Contracts Withdrawals must exceed:
0.50% of the purchase payment $ 500,000
1.00% of the purchase payment $1,000,000
If, during the first Contract Year only, the cumulative purchase payments less
cumulative withdrawals exceed the thresholds, the additional credit enhancement
will apply to prior purchase payments, less cumulative withdrawals, and will be
added to the Contract Value as of the date of the most recent purchase payment.
The additional credit enhancement will be applied only once to any given
purchase payment, current or prior.
If you exercise your right to cancel the Contract during the Trial Examination
Period, the amount we refund to you will not include any Credit Enhancement.
See "Trial Examination Period" below for details. The Consultant Solutions Plus
Contract may not be available in all states.
We will allocate any Credit Enhancements to the investment alternatives
according to the allocation instructions you have on file with us at the time
we receive your purchase payment. We will allocate each Credit Enhancement
among the investment alternatives in the same proportions as the most recent
purchase payment. We do not consider Credit Enhancements to be investments in
the Contract for income tax purposes.
We use a portion of the withdrawal charge and mortality and expense risk charge
to help recover the cost of providing the Credit Enhancement under the
Contract. See "Expenses." Under certain circumstances (such as a period of poor
market performance) the cost associated with the Credit Enhancement may exceed
the sum of the Credit Enhancement and any related earnings. You should consider
this possibility before purchasing the Contract.
TRIAL EXAMINATION PERIOD
You may cancel your Contract by providing us with written notice within the
Trial Examination Period, which is the 20 day period after you receive the
Contract, or such longer period that your state may require. If you exercise
this "Right to Cancel," the Contract terminates and we will pay you the full
amount of your purchase payments allocated to the Fixed Account. We also will
return your purchase payments allocated to the Variable Account adjusted, to
the extent federal or state law permits, to reflect investment gain or loss,
including the deduction of mortality and expense risk charges and
administrative expense charges, that occurred from the date of allocation
through the date of cancellation. If your Contract is qualified under Code
Section 408(b), we
18 PROSPECTUS
will refund the greater of any purchase payments or the Contract Value.
For Consultant Solutions Plus Contracts, we have received regulatory relief to
enable us to recover the amount of any Credit Enhancement applied to Contracts
that are cancelled during the Trial Examination Period. The amount we return to
you upon exercise of this Right to Cancel will not include any Credit
Enhancement. In states where required, we will return the amount of your
purchase payments. In other states, we will return the amount of your purchase
payments, reduced by the amount of any mortality and expense risk charges and
administrative expense charges deducted prior to cancellation, and adjusted by
any investment gain or loss associated with:
.. your Variable Account purchase payments; and
.. any portion of the Credit Enhancement assigned to the Variable Sub-accounts.
We reserve the right to allocate your purchase payments to the PIMCO VIT Money
Market - Administrative Shares Sub-Account during the Trial Examination Period.
For Contracts purchased in California by persons age 60 and older, you may
elect to defer until the end of the Trial Examination Period allocation of your
purchase payment to the Variable Sub-accounts. Unless you instruct otherwise,
upon making this election, your purchase payment will be allocated to the PIMCO
VIT Money Market - Administrative Shares Sub-Account. On the next Valuation
Date 40 day after the issue date, your Contract Value will then be reallocated
in accordance with your most recent investment allocation instructions.
State laws vary and may require a different period, other variations or
adjustments. Please refer to your Contract for any state specific information.
Contract Loans for 403(b) Contracts
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Subject to the restrictions described below, we will make loans to the Contract
Owner of a Contract used in connection with a Tax Sheltered Annuity Plan ("TSA
Plan") under Section 403(b) of the Internal Revenue Code. Such loans may not be
available in all states. Loans are not available under non-qualified Contracts.
We will only make loans after the right to cancel period and before the Payout
Start Date. All loans are subject to the terms of the Contract, the relevant
qualified plan, and the Internal Revenue Code, which impose restrictions on
loans. Loans may not be available with all rider options.
We will not make a loan to you if the total of the requested loan and your
unpaid outstanding loans will be greater than the amount available for full
withdrawal, including any applicable Market Value Adjustment, under your
Contract on the date of the loan. In addition, you may not borrow a loan if the
total of the requested loan and all of your loans under TSA Plans with the same
employer is more than the lesser of (a) or (b) where:
(a) equals $50,000 minus the excess of the highest outstanding loan balance
during the prior 12 months over the current outstanding loan balance; and
(b) equals the greater of $10,000 or half of the amount available for full
withdrawal.
The minimum loan amount is $1,000.
To request a Contract loan, write to us at the address given on the first page
of the prospectus. You alone are responsible for ensuring that your loan and
repayments comply with tax requirements. Loans made before the Payout Start
Date are generally treated as distributions under the Contract, and may be
subject to withholding and tax penalties for early distributions. Some of these
requirements are stated in Section 72 of the Internal Revenue Code. Please seek
advice from your plan administrator or tax advisor.
When we make a loan, we will transfer an amount equal to the loan amount from
the Variable Account and/or the Fixed Account Options to the Loan Account as
collateral for the loan. The Loan Account is an account established for amounts
transferred from the Variable Sub-accounts or Fixed Account Options as security
for an outstanding Contract loan. We will transfer to the Loan Account amounts
from each Variable Sub-account in proportion to the total assets in all
Variable Sub-accounts. If your loan amount is greater than your Contract Value
in the Variable Sub-accounts, we will transfer the remaining required
collateral from the Market Value Adjusted or Standard Fixed Account Option. If
your loan amount is greater than your contract value in the Variable
Sub-accounts and the Market Value Adjusted or Standard Fixed Account Option, we
will transfer the remaining required collateral from the Dollar Cost Averaging
Fixed Account Options.
We will not charge a Withdrawal Charge on the loan or on the transfer from the
Variable Sub-accounts or any of the Fixed Account Options. We may, however,
apply a Market Value Adjustment to a transfer from the Market Value Adjusted
Fixed Account to the Loan Account. If we do, we will increase or decrease the
amount remaining in the Market Value Adjusted Fixed Account by the amount of
the Market Value Adjustment, so that the net amount transferred to the Loan
Account will equal the desired loan amount. We will charge a Withdrawal Charge
and apply a Market Value Adjustment, if applicable, on a distribution to repay
the loan in full, in the event of loan default.
We will credit interest to the amounts in the Loan Account. The annual interest
rate credited to the Loan
19 PROSPECTUS
Account will be the greater of: (a) an annual effective rate of 3%; or (b) the
loan interest rate minus 2.25%. The value of the amounts in the Loan Account
are not affected by the changes in the value of the Variable Sub-accounts.
When you take out a loan, we will set the loan interest rate. That rate will
apply to your loan until it is repaid. From time to time, we may change the
loan interest rate applicable to new loans. We also reserve the right to change
the terms of new loans.
We will subtract the outstanding Contract loan balance, including accrued but
unpaid interest, from:
(1)the Death Proceeds;
(2)full withdrawal proceeds;
(3)the amount available for partial withdrawal; and
(4)the amount applied on the Payout Start Date to provide income payments.
If a New Owner elects to continue the Contract under Death of Owner Option D,
the new Contract Value will be reduced by the amount of the loan outstanding
plus accrued interest and the loan will be canceled.
Usually you must repay a Contract loan within five years of the date the loan
is made. Scheduled payments must be level, amortized over the repayment period,
and made at least quarterly. We may permit a repayment period of 15 or 30 years
if the loan proceeds are used to acquire your principal residence. We may also
permit other repayment periods.
You must mark your loan repayments as such. We will assume that any payment
received from you is a Purchase Payment, unless you tell us otherwise.
Generally, loan payments are allocated to the Variable Sub-account(s) in the
proportion that you have selected for your most recent Purchase Payment.
Allocations of loan payments are not permitted to the Fixed Accounts (Standard
Fixed Account, Market Value Adjusted Account, and Dollar Cost Averaging Fixed
Account Option). If your Purchase
Payment allocation includes any of the Fixed Accounts, the percentages
allocated to the Fixed Accounts will be allocated instead to the PIMCO Money
Market Sub-account.
If you do not make a loan payment when due, we will continue to charge interest
on your loan. We also will declare the entire loan in default. We will subtract
the defaulted loan balance plus accrued interest from any future distribution
under the Contract and keep it in payment of your loan. Any defaulted amount
plus interest will be treated as a distribution for tax purposes (as permitted
by law). As a result, you may be required to pay taxes on the defaulted amount
and incur the early withdrawal tax penalty. Until we are permitted by law to
extinguish a defaulted loan, we will continue to charge interest and add unpaid
interest to your outstanding loan balance.
If the total loan balance exceeds the amount available for full withdrawal, we
will mail written notice to your last known address. The notice will state the
amount needed to maintain the Contract in force. If we do not receive payment
of this amount within 31 days after we mail this notice, we will terminate your
Contract.
We may defer making any loan for 6 months after you ask us for a loan, unless
the loan is to pay a premium to us.
Contract Value
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On the Issue Date, the Contract Value is equal to your initial purchase payment
(for Consultant Solutions Plus Contracts, your initial purchase payment plus
the Credit Enhancement).
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-accounts you have selected, plus your value in the Fixed Account Option(s)
offered by your Contract.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-account by (ii) the Accumulation
Unit Value of that Variable Sub-account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-account when the Accumulation Unit Value for the
Sub-account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-account to your Contract. For Consultant Solutions Plus Contracts, we would
credit your Contract additional Accumulation Units of the Variable Sub-account
to reflect the Credit Enhancement paid on your purchase payment. See "Credit
Enhancement." Withdrawals and transfers from a Variable Sub-account would, of
course, reduce the number of Accumulation Units of that Sub-account allocated
to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
for each Contract will rise or fall to reflect:
.. changes in the share price of the Portfolio in which the Variable
Sub-Account invests, and
.. the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have
accrued since we last calculated the Accumulation Unit Value.
20 PROSPECTUS
We determine any applicable withdrawal charges, Rider Fees (if applicable),
transfer fees, and contract maintenance charges separately for each Contract.
They do not affect the Accumulation Unit Value. Instead, we obtain payment of
those charges and fees by redeeming Accumulation Units. For details on how we
compute Accumulation Unit Values, please refer to the Statement of Additional
Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account
for each Contract on each Valuation Date. We also determine a separate set of
Accumulation Unit Values that reflect the cost of each optional benefit, or
available combination thereof, offered under the Contract.
You should refer to the prospectuses for the Funds for a description of how the
assets of each Portfolio are valued, since that determination directly bears on
the Accumulation Unit Value of the corresponding Variable Sub-Account and,
therefore, your Contract Value.
TRUERETURN ACCUMULATION BENEFIT OPTION
We offer the TrueReturn Accumulation Benefit Option, which is available for an
additional fee. The TrueReturn Accumulation Benefit Option guarantees a minimum
Contract Value on the "Rider Maturity Date." The Rider Maturity Date is
determined by the length of the Rider Period which you select. The Option
provides no minimum Contract Value if the Option terminates before the Rider
Maturity Date. See "Termination of the TrueReturn Accumulation Benefit Option"
below for details on termination.
The TrueReturn Accumulation Benefit Option is available at time of application
for the Contract, or the date we receive a written request to add the option,
whichever is later, subject to availability and issue requirements. Currently,
you may not add the TrueReturn Option to your Contract after Contract issue
without prior approval if your Contract Value is greater than $1,000,000 at the
time you try to add the TrueReturn Option. Currently, you may have only one
TrueReturn Accumulation Benefit Option in effect on your Contract at one time.
You may have only either the TrueReturn Accumulation Benefit Option or the
SureIncome Option in effect on your Contract at one time. The TrueReturn
Accumulation Benefit Option has no maximum issue age, however the Rider
Maturity Date must occur before the latest Payout Start Date, which is the
later of the youngest Annuitant's 99th birthday or the 10th Contract
Anniversary. Once added to your Contract, the TrueReturn Accumulation Benefit
Option may be cancelled at any time on or after the 5th Rider Anniversary by:
.. notifying us in writing in a form satisfactory to us; or
.. changing your investment allocations or making other changes so that that
the allocation of investment alternatives no longer adheres to the
investment requirements for the TrueReturn Accumulation Benefit Option. For
more information regarding investment requirements for this Option, see the
"Investment Requirements" section below.
The "Rider Anniversary" is the anniversary of the Rider Date. We reserve the
right to extend the date on which the TrueReturn Accumulation Benefit Option
may be cancelled to up to the 10th Rider Anniversary at any time in our sole
discretion. Any change we make will not apply to a TrueReturn Accumulation
Benefit Option that was added to your Contract prior to the implementation date
of the change.
When you add the TrueReturn Accumulation Benefit Option to your Contract, you
must select a Rider Period and a Guarantee Option. The Rider Period and
Guarantee Option you select determine the AB Factor, which is used to determine
the Accumulation Benefit, described below. The "Rider Period" begins on the
Rider Date and ends on the Rider Maturity Date. The "Rider Date" is the date
the TrueReturn Accumulation Benefit Option was made a part of your Contract. We
currently offer Rider Periods ranging from 8 to 20 years depending on the
Guarantee Option you select. You may select any Rider Period from among those
we currently offer, provided the Rider Maturity Date occurs prior to the latest
Payout Start Date. We reserve the right to offer additional Rider Periods in
the future, and to discontinue offering any of the Rider Periods at any time.
We currently offer two "Guarantee Options," Guarantee Option 1 and Guarantee
Option 2. The Guarantee Option you select has specific investment requirements,
which are described in the "Investment Requirements" section below and may
depend upon the Rider Date. We reserve the right to offer additional Guarantee
Options in the future, and to discontinue offering any of the Guarantee Options
at any time. After the Rider Date, the Rider Period and Guarantee Option may
not be changed.
The TrueReturn Accumulation Benefit Option may not be available in all states.
We may discontinue offering the TrueReturn Accumulation Benefit Option at any
time.
Accumulation Benefit.
On the Rider Maturity Date, if the Accumulation Benefit is greater than the
Contract Value, the Contract Value will be increased to equal the Accumulation
Benefit. The excess amount of any such increase will be allocated to the PIMCO
Money Market Variable Sub-account. You may transfer the excess amount out of
the PIMCO Money Market Variable Sub-account and into another investment
alternative at any time thereafter. However, each transfer you make will count
against the 12 transfers you can make each Contract Year without paying a
transfer fee. Prior to the Rider Maturity Date, the Accumulation Benefit will
not be available as a Contract Value, Settlement Value, or Death Proceeds.
Additionally, we will not pay an Accumulation Benefit if the TrueReturn
Accumulation
21 PROSPECTUS
Benefit Option is terminated for any reason prior to the Rider Maturity Date.
After the Rider Maturity Date, the TrueReturn Accumulation Benefit Option
provides no additional benefit.
The "Accumulation Benefit" is equal to the Benefit Base multiplied by the AB
Factor. The "AB Factor" is determined by the Rider Period and Guarantee Option
you selected as of the Rider Date. The following table shows the AB Factors
available for the Rider Periods and Guarantee Options we currently offer.
AB Factors
Rider Period Guarantee Guarantee
(number of years) Option 1 Option 2
-------------------------------------
8 100.0% NA
-------------------------------------
9 112.5% NA
-------------------------------------
10 125.0% 100.0%
-------------------------------------
11 137.5% 110.0%
-------------------------------------
12 150.0% 120.0%
-------------------------------------
13 162.5% 130.0%
-------------------------------------
14 175.0% 140.0%
-------------------------------------
15 187.5% 150.0%
-------------------------------------
16 200.0% 160.0%
-------------------------------------
17 212.5% 170.0%
-------------------------------------
18 225.0% 180.0%
-------------------------------------
19 237.5% 190.0%
-------------------------------------
20 250.0% 200.0%
-------------------------------------
The following examples illustrate the Accumulation Benefit calculations under
Guarantee Options 1 and 2 on the Rider Maturity Date. For the purpose of
illustrating the Accumulation Benefit calculation, the examples assume the
Benefit Base is the same on the Rider Date and the Rider Maturity Date.
Example 1: Guarantee Option 1
Guarantee Option: 1
Rider Period: 15
AB Factor: 187.5%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit =Benefit Base on Rider Maturity
Date X AB Factor
=$50,000 X 187.5%
=$93,750
Example 2: Guarantee Option 2
Guarantee Option: 2
Rider Period: 15
AB Factor: 150.0%
Rider Date: 1/2/04
Rider Maturity Date: 1/2/19
Benefit Base on Rider Date: $50,000
Benefit Base on rider Maturity Date: $50,000
On the Rider Maturity Date (1/2/19):
Accumulation Benefit =Benefit Base on Rider Maturity
Date X AB Factor
=$50,000 X 150.0%
=$75,000
Guarantee Option 1 offers a higher AB Factor and more rider periods than
Guarantee Option 2. Guarantee Option 1 and Guarantee Option 2 have different
investment restrictions. See "Investment Requirements" below for more
information.
Benefit Base.
The Benefit Base is used solely for purposes of determining the Rider Fee and
the Accumulation Benefit. The Benefit Base is not available as a Contract
Value, Settlement Value, or Death Proceeds. On the Rider Date, the "Benefit
Base" is equal to the Contract Value. After the Rider Date, the Benefit Base
will be recalculated for purchase payments and withdrawals as follows:
.. The Benefit Base will be increased by purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts) made prior to or on
the first Contract Anniversary following the Rider Date. Subject to the
terms and conditions of your Contract, you may add purchase payments after
this date, but they will not be included in the calculation of the Benefit
Base. Therefore, if you plan to make purchase payments after the first
Contract Anniversary following the Rider Date, you should consider
carefully whether this Option is appropriate for your needs.
.. The Benefit Base will be decreased by a Withdrawal Adjustment for each
withdrawal you make. The Withdrawal Adjustment is equal to (a) divided by
(b), with the result multiplied by (c), where:
(a) = the withdrawal amount;
(b) = the Contract Value immediately prior to the withdrawal; and
(c) = the Benefit Base immediately prior to the withdrawal.
Withdrawals taken prior to annuitization (referred to in this prospectus as the
Payout Phase) are generally considered to come from the earnings in the
Contract first. If the Contract is tax-qualified, generally all withdrawals are
treated as distributions of earnings. Withdrawals of earnings are taxed as
ordinary income and, if taken prior to age 59 1/2, may be subject to an
additional 10% federal tax penalty. A withdrawal charge also may apply. See
Appendix G for numerical examples that illustrate how the Withdrawal Adjustment
is applied.
The Benefit Base will never be less than zero.
Investment Requirements.
If you add the TrueReturn Option to your Contract, you must adhere to certain
requirements related to the
22 PROSPECTUS
investment alternatives in which you may invest during the Rider Period. The
specific requirements will depend on the model portfolio option ("Model
Portfolio Option") you have selected and the effective date of your TrueReturn
Option. These requirements are described below in more detail. These
requirements may include, but are not limited to, maximum investment limits on
certain Variable Sub-accounts or on certain Fixed Account Options, exclusion of
certain Variable Sub-accounts or of certain Fixed Account Options, required
minimum allocations to certain Variable Sub-accounts, and restrictions on
transfers to or from certain investment alternatives.
We may also require that you use the Automatic Portfolio Rebalancing Program.
We may change the specific requirements that are applicable to a Guarantee
Option or a Model Portfolio Option available under a Guarantee Option at any
time in our sole discretion. Any changes we make will not apply to a TrueReturn
Option that was made part of your Contract prior to the implementation date of
the change, except for changes made due to a change in investment alternatives
available under the Contract. Any changes we make will not apply to a new
TrueReturn Option elected subsequent to the change pursuant to the Rider
Trade-In Option.
If you have an outstanding loan balance, you may not elect the TrueReturn
Option until the outstanding balance has been repaid. If you elect the
TrueReturn Option, we will not make a policy loan to you until the TrueReturn
Option matures or is cancelled.
When you add the TrueReturn Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to a model portfolio option ("Model Portfolio Option") available with the
Guarantee Option you selected, as defined below; or
2) to the DCA Fixed Account Option and then transfer all purchase payments (and
Credit Enhancements for Consultant Solutions Plus Contracts) and interest
according to a Model Portfolio Option available for use with the Guarantee
Option you selected; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must
be met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other Model Portfolio Options
available with your Guarantee Option. We currently offer several Model
Portfolio Options with each of the available Guarantee Options. The Model
Portfolio Options that are available under Guarantee Options may differ
depending upon the effective date of your TrueReturn Option. Please refer to
the Model Portfolio Option 1, Model Portfolio Option 2 and TrueBalance/SM/
Model Portfolio Options sections below for more details. We may add other Model
Portfolio Options in the future. We also may remove Model Portfolio Options in
the future anytime prior to the date you select such Model Portfolio Option. In
addition, if the investment alternatives available under the Contract change,
we may revise the Model Portfolio Options. The following table summarizes the
Model Portfolio Options currently available for use with each Guarantee Option
under the TrueReturn Option:
Guarantee Option 1 Guarantee Option 2
---------------------------------------------------
*Model Portfolio Option 1 *Model Portfolio Option 2
*TrueBalance *TrueBalance
Conservative Model Conservative Model
Portfolio Option Portfolio Option
*TrueBalance Moderately *TrueBalance Moderately
Conservative Model Conservative Model
Portfolio Option Portfolio Option
*TrueBalance Moderate
Model Portfolio Option
*TrueBalance Moderately
Aggressive Model
Portfolio Option
*TrueBalance Aggressive
Model Portfolio Option
---------------------------------------------------
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the MVA Fixed Account Option. You must transfer any portion of
your Contract Value that is allocated to the Standard Fixed Account Option or
to the MVA Fixed Account Option to the Variable Sub-accounts prior to adding
the TrueReturn Option to your Contract. Transfers from the MVA Fixed Account
Option may be subject to a Market Value Adjustment. You may allocate any
portion of your purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) to the DCA Fixed Account Option on the Rider Date,
provided the DCA Fixed Account Option is available with your Contract and in
your state. See the "Dollar Cost Averaging Fixed Account Option" section of
this prospectus for more information. We use the term "Transfer Period Account"
to refer to each purchase payment allocation made to the DCA Fixed Account
Option for a specified term length. At the expiration of a Transfer Period
Account any remaining amounts in the Transfer Period Account will be
transferred to the Variable Sub-Accounts according to the percentage
allocations for the Model Portfolio Option you selected.
Any subsequent purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) made to your Contract will be allocated to the
Variable Sub-Accounts according to your most recent instructions on file with
us. You must comply with any required percentage allocations for the Model
Portfolio Option you have selected. You may also request that purchase payments
(and Credit Enhancement for Consultant Solutions Plus Contracts) be allocated
to the DCA Fixed Account Option.
23 PROSPECTUS
Model Portfolio Option 1.
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1, you must allocate a certain percentage of your
Contract Value into each of three asset categories. Please note that certain
investment alternatives are not available under Model Portfolio Option 1. You
may choose the Variable Sub-Accounts in which you want to invest, provided you
maintain the percentage allocation requirements for each category. You may also
make transfers among the Variable Sub-Accounts within each category at any
time, provided you maintain the percentage allocation requirements for each
category. However, each transfer you make will count against the 12 transfers
you can make each Contract Year without paying a transfer fee.
Effective May 1, 2005, certain Variable Sub-Accounts under Model Portfolio 1
have been reclassified into different asset categories. These changes apply to
TrueReturn Accumulation Benefit Options effective both prior to and on or after
May 1, 2005. The following table describes the percentage allocation
requirements for Model Portfolio Option 1 and Variable Sub-Accounts available
under each category:
Model Portfolio Option 1
- --------------------------------------------------------------------------------
20% Category A
50% Category B
30% Category C
0% Category D
- --------------------------------------------------------------------------------
Category A
Fidelity VIP Money Market - Service Class 2 Sub-Account
PIMCO VIT Money Market - Administrative Shares Sub-Account
- --------------------------------------------------------------------------------
Category B
Fidelity VIP Investment Grade Bond - Service Class 2 Sub-Account
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
MFS High Income - Service Class Sub-Account
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares Sub-Account
PIMCO VIT Real Return - Administrative Shares Sub-Account
PIMCO VIT Total Return - Administrative Shares Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(1)/
Van Kampen LIT Government, Class II Sub-Account
- --------------------------------------------------------------------------------
Category C
AIM V.I. Basic Value - Series II Sub-Account
AIM V.I. Core Equity - Series II Sub-Account
AIM V.I. Mid Cap Core Equity - Series II Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Equity-Income - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Overseas - Service Class 2 Sub-Account
Fidelity VIP Asset Manager/(SM)/ - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Janus Aspen Series Forty - Service Shares Sub-Account
Janus Aspen Series Perkins Mid Cap Value - Service Shares Sub-Account
Janus Aspen Series INTECH Risk-Managed Core - Service Shares Sub-Account
Janus Aspen Series Balanced - Service Shares Sub-Account
Legg Mason Partners Variable Fundamental Value Portfolio - Class I
Sub-Account/(1)/
Legg Mason Partners Variable Investors - Class I Sub-Account/(2)/
MFS Investors Trust - Service Class Sub-Account
MFS Total Return - Service Class Sub-Account
MFS Investors Growth Stock - Service Class Sub-Account
MFS Value - Service Class Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Rydex VT All-Cap Opportunity Sub-Account
T. Rowe Price Equity Income - II Sub-Account
T. Rowe Price Blue Chip Growth - II Sub-Account
Van Eck Worldwide Multi-Manager Alternatives Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
Category D (Variable Sub-Accounts not available under Model Portfolio Option 1)
AIM V.I. Capital Appreciation - Series II Sub-Account
Alger American LargeCap Growth - Class S Sub-Account
Alger American Capital Appreciation - Class S Sub-Account
Alger American MidCap Growth - Class S Sub-Account
Fidelity VIP Growth - Service Class 2 Sub-Account
MFS New Discovery - Service Class Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
UIF Capital Growth, Class II Sub-Account/(3)/
Van Eck Worldwide Emerging Markets Sub-Account
Van Eck Worldwide Hard Assets Sub-Account
Van Kampen LIT Mid Cap Growth, Class II Sub-Account
- --------------------------------------------------------------------------------
/(1)/Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio - Class I.
/(2)/Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
/(3)/Morgan Stanley Investment Management Inc., the investment advisor to the
UIF Portfolios, does business in certain instances as Van Kampen.
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocation requirements for Model Portfolio
Option 1. We will use the percentage allocations as of your most recent
instructions.
Model Portfolio Option 2.
The investment requirements under Model Portfolio Option 2 depend on the
effective date of your TrueReturn Accumulation Benefit Option.
Rider Date prior to May 1, 2005
If your TrueReturn Accumulation Benefit Option Rider Date is prior to May 1,
2005, and you choose Model Portfolio Option 2 or transfer your entire Contract
Value into Model Portfolio Option 2 under Guarantee Option 2, you must allocate
your Contract Value among four asset categories in accordance with the
percentage allocation requirements set out in the table below. You may choose
the Variable Sub-Accounts in which you want to invest, provided you maintain
the percentage allocation requirements for each category. You may also make
transfers among the Variable Sub-Accounts within each category at any time,
provided you maintain the percentage allocation requirements for each category.
24 PROSPECTUS
However, each transfer you make will count against the 12 transfers you can
make each Contract Year without paying a transfer fee.
The following table describes the percentage allocation requirements for Model
Portfolio Option 2 (Rider Date prior to May 1, 2005) and the Variable
Sub-Accounts available under each category:
Model Portfolio Option 2 (Rider Date Prior to May 1, 2005)
- --------------------------------------------------------------------------------
10% Category A
20% Category B
50% Category C
20% Category D
- --------------------------------------------------------------------------------
Category A
Fidelity VIP Money Market - Service Class 2 Sub-Account
PIMCO VIT Money Market - Administrative Shares Sub-Account
- --------------------------------------------------------------------------------
Category B
Fidelity VIP Investment Grade Bond - Service Class 2 Sub-Account
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
MFS High Income - Service Class Sub-Account
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares Sub-Account
PIMCO VIT Real Return - Administrative Shares Sub-Account
PIMCO VIT Total Return - Administrative Shares Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(1)/
Van Kampen LIT Government, Class II Sub-Account
- --------------------------------------------------------------------------------
Category C
AIM V.I. Basic Value - Series II Sub-Account
AIM V.I. Mid Cap Core Equity - Series II Sub-Account
Fidelity VIP Equity-Income - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Asset Manager/(SM)/ - Service Class 2 Sub-Account
Janus Aspen Series Perkins Mid Cap Value - Service Shares Sub-Account
Janus Aspen Series INTECH Risk-Managed Core - Service Shares Sub-Account
Janus Aspen Series Balanced - Service Shares Sub-Account
Legg Mason Partners Variable Investors - Class I Sub-Account/(2)/
MFS Investors Trust - Service Class Sub-Account
MFS Total Return - Service Class Sub-Account
MFS Value - Service Class Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Premier VIT OpCap Balanced Sub-Account
T. Rowe Price Equity Income - II Sub-Account
Van Eck Worldwide Multi-Manager Alternatives Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
Category D
AIM V.I. Capital Appreciation - Series II Sub-Account
AIM V.I. Core Equity - Series II Sub-Account
Alger American LargeCap Growth - Class S Sub-Account
Alger American Capital Appreciation - Class S Sub-Account
Alger American MidCap Growth - Class S Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Growth - Service Class 2 Sub-Account
Fidelity VIP Overseas - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Janus Aspen Series Forty - Service Shares Sub-Account
Legg Mason Partners Variable Fundamental Value Portfolio - Class I
Sub-Account/(3)/
MFS New Discovery - Service Class Sub-Account
MFS Investors Growth Stock - Service Class Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Rydex VT All-Cap Opportunity Sub-Account
T. Rowe Price Blue Chip Growth - II Sub-Account
UIF Capital Growth, Class II Sub-Account/(1)/
Van Eck Worldwide Emerging Markets Sub-Account
Van Eck Worldwide Hard Assets Sub-Account
Van Kampen LIT Mid Cap Growth, Class II Sub-Account
- --------------------------------------------------------------------------------
(1)Morgan Stanley Investment Management Inc., the investment advisor to the UIF
Portfolios, does business in certain instances as Van Kampen.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
(3)Effective April 27, 2007, the Legg Mason Partners Variable All Cap Portfolio
- Class II was reorganized into the Legg Mason Partners Variable Fundamental
Value Portfolio - Class I.
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-Account and
return it to the percentage allocation requirements for Model Portfolio Option
2 (Rider Date prior to May 1, 2005). We will use the percentage allocations as
of your most recent instructions.
Rider Date on or after May 1, 2005
If your TrueReturn Accumulation Benefit Option Rider Date is on or after May 1,
2005, and you choose Model Portfolio Option 2 or transfer your entire Contract
Value into Model Portfolio Option 2 under Guarantee Option 2, you may allocate
your Contract Value among any of a selected group of available Variable
Sub-Accounts listed below. However, you may not allocate your Contract Value
among any of the excluded Variable Sub-Accounts listed below. You may choose to
invest in or transfer among any of the available Variable Sub-Accounts,
however, each transfer you make will count against the 12 transfers you can
make each Contract Year without paying a transfer fee.
The following table lists the available and excluded Variable Sub-Accounts
under Model Portfolio Option 2 (Rider Date on or after May 1, 2005):
Model Portfolio Option 2 (Rider Date on or after May 1, 2005)
- --------------------------------------------------------------------------------
Available
- --------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account
AIM V.I. Core Equity - Series II Sub-Account
AIM V.I. Mid Cap Core Equity - Series II Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Equity-Income - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Investment Grade Bond - Service Class 2 Sub-Account
Fidelity VIP Overseas - Service Class 2 Sub-Account
Fidelity VIP Asset Manager/(SM)/ - Service Class 2 Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Janus Aspen Series Forty - Service Shares Sub-Account
Janus Aspen Series Perkins Mid Cap Value - Service Shares Sub-Account
Janus Aspen Series INTECH Risk-Managed Core - Service Shares Sub-Account
25 PROSPECTUS
Janus Aspen Series Balanced - Service Shares Sub-Account
Legg Mason Partners Variable Fundamental Value Portfolio - Class I
Sub-Account/(1)/
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
Legg Mason Partners Variable Investors - Class I Sub-Account/(2)/
MFS Investors Trust - Service Class Sub-Account
MFS High Income - Service Class Sub-Account
MFS Investors Growth Stock - Service Class Sub-Account
MFS Total Return - Service Class Sub-Account
MFS Value - Service Class Sub-Account
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares Sub-Account
PIMCO VIT Money Market - Administrative Shares Sub-Account
PIMCO VIT Real Return - Administrative Shares Sub-Account
PIMCO VIT Total Return - Administrative Shares Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Rydex VT All-Cap Opportunity Sub-Account
T. Rowe Price Equity Income - II Sub-Account
T. Rowe Price Blue Chip Growth - II Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(3)/
Van Eck Worldwide Multi-Manager Alternatives Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Government, Class II Sub-Account
Model Portfolio Option 2 (Rider Date on or after May 1, 2005)
- --------------------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account
Alger American LargeCap Growth - Class S Sub-Account
Alger American Capital Appreciation - Class S Sub-Account
Alger American MidCap Growth - Class S Sub-Account
Fidelity VIP Growth - Service Class 2 Sub-Account
MFS New Discovery - Service Class Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
UIF Capital Growth, Class II Sub-Account/(3)/
Van Eck Worldwide Emerging Markets Sub-Account
Van Eck Worldwide Hard Assets Sub-Account
Van Kampen LIT Mid Cap Growth, Class II Sub-Account
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap Portfolio
- Class II was reorganized into the Legg Mason Partners Variable Fundamental
Value Portfolio - Class I.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
(3)Morgan Stanley Investment Management Inc., the investment advisor to the UIF
Portfolios, does business in certain instances as Van Kampen.
TrueBalance/SM/ Model Portfolio Options.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model Portfolio involves an allocation of assets among a group of
pre-selected Variable Sub-Accounts. You cannot make transfers among the
Variable Sub-Accounts nor vary the Variable Sub-Accounts that comprise a
TrueBalance Model Portfolio Option. If you choose a TrueBalance Model Portfolio
Option, we will invest and periodically reallocate your Contract Value
according to the allocation percentages and requirements for the TrueBalance
Model Portfolio Option you have selected currently. For more information
regarding the TrueBalance program, see the "TrueBalance/SM/ Asset Allocation
Program" section of this prospectus. However, note that the restrictions
described in this section, specifically the restrictions on transfers and the
requirement that all of your Contract Value be allocated to a TrueBalance Model
Portfolio Option, apply to the TrueBalance program only if you have added the
TrueReturn Option to your Contract.
Please note only certain TrueBalance Model Portfolio Options are available with
your TrueReturn Option as summarized in the table under Investment Requirements
above.
Cancellation of the TrueReturn Option.
You may not cancel the TrueReturn Option or make transfers, changes to your
investment allocations, or changes to the Automatic Portfolio Rebalancing
Program that are inconsistent with the investment restrictions applicable to
your Guarantee Option and/or Model Portfolio Option prior to the 5th Rider
Anniversary. Failure to comply with the investment requirements for any reason
may result in the cancellation of the TrueReturn Option. On or after the 5th
Rider Anniversary, we will cancel the TrueReturn Option if you make transfers,
changes to your investment allocations, or changes to the Automatic Portfolio
Rebalancing Program that are inconsistent with the investment requirements
applicable to your Guarantee Option and/or Model Portfolio Option. We will not
cancel the TrueReturn Option or make any changes to your investment allocations
or to the Automatic Portfolio Rebalancing Program that are inconsistent with
the investment restrictions applicable to your Guarantee Option until we
receive notice from you that you wish to cancel the TrueReturn Option. No
Accumulation Benefit will be paid if you cancel the Option prior to the Rider
Maturity Date.
Death of Owner or Annuitant.
If the Contract Owner or Annuitant dies before the Rider Maturity Date and the
Contract is continued under Option D of the Death of Owner or Death of
Annuitant provision as described on page 62 of your Contract, then the
TrueReturn Option will continue, unless the new Contract Owner elects to cancel
this Option. If the TrueReturn Option is continued, it will remain in effect
until terminated. If the Contract is not continued under Option D, then the
TrueReturn Option will terminate on the date we receive a Complete Request for
Settlement of the Death Proceeds.
If an Annuitant dies before the Payout Start Date, and the Contract is
continued under Category 1 of the Death of Annuitant provision of the Contract,
the TrueReturn Accumulation Benefit Option will remain in effect until
terminated. If the Contract is not continued under Category 1, then the
TrueReturn Accumulation Benefit
26 PROSPECTUS
Option will terminate on the date we receive a complete request for settlement
of the Death Proceeds.
Rider Trade-In Option.
We offer a "Rider Trade-In Option" that allows you to cancel your TrueReturn
Accumulation Benefit Option and immediately add a new TrueReturn Accumulation
Benefit Option ("New Option"), provided all of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to
the Rider Maturity Date.
.. The New Option will be made a part of your Contract on the date the
existing TrueReturn Accumulation Benefit Option is cancelled, provided it
is cancelled for reasons other than the termination of your Contract.
.. The New Option must be a TrueReturn Accumulation Benefit Option that we
make available for use with the Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be
met as of the date the New Option is made a part of your Contract.
For example, if you trade-in your TrueReturn Accumulation Benefit Option:
.. the new Rider Fee will be based on the Rider Fee percentage applicable to a
new TrueReturn Accumulation Benefit Option at the time of trade-in;
.. the Benefit Base for the New Option will be based on the Contract Value as
of the new Rider Date;
.. the AB Factor will be determined by the Rider Periods and Guarantee Options
available with the New Option;
.. the Model Portfolio Options will be determined by the Model Portfolio
Options offered with the Guarantee Options available with the New Option;
.. any waiting period for canceling the New Option will start again on the new
Rider Date;
.. any waiting period for exercising the Rider Trade-In Option will start
again on the new Rider Date; and
.. the terms and conditions of the Rider Trade-In Option will be according to
the requirements of the New Option.
Currently, we are also making the SureIncome Option available at the time of
your first utilization of this TrueReturn Accumulation Benefit Option Rider
Trade-In Option. We may discontinue offering the SureIncome Option under the
Rider Trade-In Option for new TrueReturn Accumulation Benefit Options added in
the future at anytime at our discretion. If we do so, TrueReturn Options issued
prior to this time will continue to have the SureIncome Option available at the
time of the first utilization of this TrueReturn Rider Trade-In Option. You may
cancel your TrueReturn Accumulation Benefit Option and immediately add a new
SureIncome Option, provided all of the following conditions are met:
.. The trade-in must occur on or after the 5th Rider Anniversary and prior to
the Rider Maturity Date. We reserve the right to extend the date at which
time the trade-in may occur to up to the 10th anniversary of the Rider Date
at any time in our sole discretion. Any change we make will not apply to a
TrueReturn Accumulation Benefit Option that was added to your Contract
prior to the implementation date of the change.
.. The new SureIncome Option will be made a part of your Contract on the date
the existing TrueReturn Accumulation Benefit Option is cancelled, provided
it is cancelled for reasons other than the termination of your Contract.
.. The new SureIncome Option must be a SureIncome Option that we make
available for use with this Rider Trade-In Option.
.. The issue requirements and terms and conditions of the new SureIncome
Option must be met as of the date the new SureIncome Option is made a part
of your Contract.
You should consult with your sales representative before trading in your
TrueReturn Accumulation Benefit Option.
Termination of the TrueReturn Option.
The TrueReturn Option will terminate on the earliest of the following to occur:
.. on the Rider Maturity Date;
.. on the Payout Start Date;
.. on the date your Contract is terminated;
.. on the date the Option is cancelled;
.. on the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. on the date the Option is replaced with a New Option under the Rider
Trade-In Option.
We will not pay an Accumulation Benefit if the TrueReturn Option is terminated
for any reason prior to the Rider Maturity Date.
SUREINCOME WITHDRAWAL BENEFIT OPTION
We offer the SureIncome Withdrawal Benefit Option, which is available for an
additional fee. The SureIncome Option provides a guaranteed withdrawal benefit
that gives you the right to take limited partial withdrawals that total an
amount equal to your purchase payments plus any applicable credit enhancements
(subject to certain restrictions). Therefore, regardless of the subsequent
fluctuations in the value of your Contract Value, you are entitled to a Benefit
Payment each Benefit Year until your Benefit Base is exhausted (terms defined
below).
27 PROSPECTUS
The SureIncome Option guarantees an amount up to the "Benefit Payment
Remaining" which will be available for withdrawal from the Contract each
"Benefit Year" until the "Benefit Base" (defined below) is reduced to zero. If
the Contract Value is reduced to zero and the Benefit Base is still greater
than zero, we will distribute an amount equal to the Benefit Base to the
Contract Owner as described below under the "Withdrawal Benefit Payout Phase".
For purposes of the SureIncome Option, "withdrawal" means the gross amount of a
withdrawal before any applicable charges such as withdrawal charges, fees,
taxes or adjustments including any applicable Market Value Adjustments and
surrender charges. Under the SureIncome Option, we currently do not treat a
withdrawal that reduces the Contract Value to less than $1,000 as a withdrawal
of the entire Contract Value.
The "Rider Date" is the date the SureIncome Option was made a part of your
Contract. The initial Benefit Year is the period between the Rider Date and the
first Contract Anniversary after the Rider Date. Each subsequent Benefit Year
will coincide with (the same as) the Contract Year.
The SureIncome Option is available at issue of the Contract, or may be added
later, subject to availability and issue requirements. You may not add the
SureIncome Option to your Contract after Contract issue without our prior
approval if your Contract Value is greater than $1,000,000 at the time you try
to add the SureIncome Option. You may have only one SureIncome Option in effect
on your Contract at one time. You may only have either the TrueReturn
Accumulation Benefit Option, or the SureIncome Option in effect on your
Contract at the same time. The SureIncome Option is only available if the
oldest Contract Owner and oldest Annuitant are age 85 or younger on the
effective date of the Rider (the "Rider Application Date") (The maximum age may
depend on your state). The SureIncome Option is not available to be added to a
Contract categorized as a Tax Sheltered Annuity as defined under Internal
Revenue Code Section 403(b) at this time. We reserve the right to make the
SureIncome Option available to such Contracts on a nondiscriminatory basis in
the future at our discretion. Once added to your Contract, the SureIncome
Option may be cancelled at any time on or after the 5th calendar year
anniversary of the Rider Date by notifying us in writing in a form satisfactory
to us.
The SureIncome Option may not be available in all states. We may discontinue
offering the SureIncome Option at any time to new Contract Owners and to
existing Contract Owners who did not elect the SureIncome Option prior to the
date of discontinuance.
Withdrawal Benefit Factor
The "Withdrawal Benefit Factor" is used to determine the "Benefit Payment" and
Benefit Payment Remaining. We currently offer a Withdrawal Benefit Factor equal
to 8%. We reserve the right to make other Withdrawal Benefit Factors available
in the future for new SureIncome Options and/or to eliminate the current
Withdrawal Benefit Factor. Once a Withdrawal Benefit Factor has been
established for a SureIncome Option, it cannot be changed after the Rider Date
unless that SureIncome Option is terminated.
Benefit Payment and Benefit Payment Remaining
The Benefit Payment is the amount available at the beginning of each Benefit
Year that you may withdraw during that Benefit Year. The Withdrawal Benefit
Factor and the Benefit Base are used to determine your Benefit Payment. The
Benefit Payment Remaining is the amount remaining after any previous
withdrawals in a Benefit Year that you may withdraw without reducing your
Benefit Base by more than the amount of the withdrawal and without reducing
your Benefit Payment available in future Benefit Years. Please note that any
premiums or withdrawals made on a Contract Anniversary would be applied to the
Benefit Year that just ended on that Contract Anniversary.
At the beginning of each Benefit Year, the Benefit Payment Remaining is equal
to the Benefit Payment.
During each Benefit Year the Benefit Payment Remaining will be increased by
purchase payments (and Credit Enhancements for Consultant Solutions Plus
Contracts) multiplied by the Withdrawal Benefit Factor (currently 8% for new
SureIncome Options) and reduced by the amount of each withdrawal. The Benefit
Payment Remaining will never be less than zero.
On the Rider Date, the Benefit Payment is equal to the greater of:
.. The Contract Value multiplied by the Withdrawal Benefit Factor (currently
8% for new SureIncome Options); or
.. The value of the Benefit Payment of the previous Withdrawal Benefit Option
(attached to your Contract) that is being terminated under a rider trade-in
option (see "Rider Trade-In Option" below for more information), if
applicable.
After the Rider Date, the Benefit Payment will be increased by purchase
payments (and Credit Enhancements for Consultant Solutions Plus Contracts)
multiplied by the Withdrawal Benefit Factor and affected by withdrawals as
follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Payment is
unchanged.
.. If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Payment will be the lesser
of:
. The Benefit Payment immediately prior to the withdrawal; or
28 PROSPECTUS
. The Contract Value immediately prior to withdrawal less the amount of
the withdrawal, multiplied by the Withdrawal Benefit Factor.
At our discretion, the Benefit Payment available during a Benefit Year may be
increased on a nondiscriminatory basis and without prior notice in order to
satisfy IRS minimum distribution requirements on the Contract under which this
Option has been elected. We are currently not increasing the Benefit Payment
available to satisfy IRS minimum distribution requirements, which may result in
a withdrawal greater than the Benefit Payment Remaining.
Benefit Base
The Benefit Base is not available as a Contract Value or Settlement Value. The
Benefit Base is used solely to help calculate the Rider Fee, the amount that
may be withdrawn and payments that may be received under the SureIncome Option.
On the Rider Date, the Benefit Base is equal to the Contract Value. After the
Rider Date, the Benefit Base will be increased by purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts) and decreased by
withdrawals as follows:
.. If the withdrawal is less than or equal to the Benefit Payment Remaining in
effect immediately prior to the withdrawal, the Benefit Base will be
reduced by the amount of the withdrawal.
If the withdrawal is greater than the Benefit Payment Remaining in effect
immediately prior to the withdrawal, the Benefit Base will be the lesser of:
.. The Contract Value immediately prior to withdrawal less the amount of the
withdrawal; or
.. The Benefit Base immediately prior to withdrawal less the amount of the
withdrawal.
The Benefit Base may also be reduced in other situations as detailed in the
"Owner and Assignment of Payments or Interest" section below.
If the Benefit Base is reduced to zero, this SureIncome Option will terminate.
For numerical examples that illustrate how the values defined under the
SureIncome Option are calculated, see Appendix I.
Contract Owner and Assignment of Payments or Interest
If you change the Contract Owner or assign any payments or interest under this
Contract, as allowed, to any living or non-living person other than your spouse
on or after the first calendar year anniversary of the Rider Date, the Benefit
Base will be recalculated to be the lesser of the Contract Value and the
Benefit Base at the time of assignment.
Contract Value
If your Contract Value is reduced to zero due to fees or withdrawals and your
Benefit Base is still greater than zero, your Contract will immediately enter
the Withdrawal Benefit Payout Phase. Under the SureIncome Option, we currently
do not treat a withdrawal that reduces the Contract Value to less than $1,000
as a withdrawal of the entire Contract Value. We reserve the right to change
this at any time.
Withdrawal Benefit Payout Phase
Under the Withdrawal Benefit Payout Phase, the Accumulation Phase of the
Contract ends and the Contract enters the Payout Phase subject to the following:
.. The "Withdrawal Benefit Payout Start Date" is the date the Withdrawal
Benefit Payout Phase is entered and the Accumulation Phase of the Contract
ends.
.. No further withdrawals, purchase payments or any other actions associated
with the Accumulation Phase can be made after the Withdrawal Benefit Payout
Start Date.
.. The Payout Start Date is the first day of the next Benefit Year after the
Withdrawal Benefit Payout Start Date. We reserve the right to allow other
Payout Start Dates to be requested on a nondiscriminatory basis without
prior notice.
.. During the Withdrawal Benefit Payout Phase, we will make scheduled fixed
income payments to the Owner (or new Contract Owner) at the end of each
month starting one month after the Payout Start Date. The amount of each
payment will be equal to the Benefit Payment divided by 12, unless a
payment frequency other than monthly is requested in a form acceptable to
us and received by us before the first payment is made (the amount of each
payment will be adjusted accordingly; i.e. if the payment frequency
requested is quarterly, the amount of each payment will be equal to the
Benefit Payment divided by 4). Payments will be made over a period certain
such that total payments made will equal the Benefit Base on the Payout
Start Date; therefore, the final payment may be reduced. If your Contract
is a qualified contract, meaning an individual retirement annuity qualified
as defined under Internal Revenue Code Section 408(b) or a Tax Sheltered
Annuity as defined under Internal Revenue Code Section 403(b), the period
certain cannot exceed that which is required by Internal Revenue Code
Section 401(a)(9) and regulations promulgated thereunder. Therefore, the
amount of each payment under this Option may be larger so that the sum of
the payments made over this period equals the Benefit Base on the Payout
Start Date. Additionally, if your Contract is a qualified contract, we will
not permit a change in the payment frequency or level.
.. If your Contract is a non-qualified contract, we reserve the right to allow
other payment frequencies or levels to be requested on a nondiscriminatory
29 PROSPECTUS
basis without prior notice. In no event will we allow more than one change in
the payment frequency or level during a Contract Year.
.. If the Contract Owner dies before all payments have been made, the
remaining payments will continue to be made to the new Contract Owner as
scheduled.
.. Once all scheduled payments have been paid, the Contract will terminate.
Generally, you may not make withdrawals, purchase payments or any other actions
associated with the Accumulation Phase after the Withdrawal Benefit Payout
Start Date.
EXAMPLE
Beginning of Benefit Year 1*
Contract Value = $100,000
Benefit Base = $100,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000
In this example, you can take a Benefit Payment of up to $8,000 in Benefit Year
1. If a withdrawal of $6,000 is taken then the following values would apply:
Contract Value = $94,000 (Assuming that your Contract Value has not been
affected by any other factors)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $2,000
Beginning of Benefit Year 2
Contract Value = $70,000 (Assuming that your contract value has declined due to
poor performance)
Benefit Base = $94,000
Benefit Payment = $8,000
Benefit Payment Remaining = $8,000 (resets at the beginning of each Benefit
Year)
In Benefit Year 2 you have the right to a Benefit Payment of $8,000 and since
you have not taken any withdrawals yet in Benefit Year 2, the Benefit Payment
Remaining would also be $8,000 at the beginning of Benefit Year 2.
* This example assumes an initial Contract Value of $100,000, no additional
purchase payments, a withdrawal benefit factor of 8% and does not take into
account fees or charges.
Investment Requirements
If you add the SureIncome Option to your Contract, you must adhere to certain
requirements related to the investment alternatives in which you may invest.
The specific requirements are described below in more detail and will depend on
your currently selected Model Portfolio Option and your Withdrawal Benefit
Factor. These requirements may include, but are not limited to, maximum
investment limits on certain Variable Sub-Accounts or on certain Fixed Account
Options, exclusion of certain Variable Sub-Accounts or of certain Fixed Account
Options, required minimum allocations to certain Variable Sub-Accounts, and
restrictions on transfers to or from certain investment alternatives. We may
also require that you use the Automatic Portfolio Rebalancing Program. We may
change the specific requirements that are applicable at any time in our sole
discretion. Any changes we make will not apply to a SureIncome Option that was
made a part of your Contract prior to the implementation date of the change,
except for changes made due to a change in investment alternatives available
under the Contract. This restriction does not apply to a new Option elected
pursuant to the Rider Trade-In Option. We reserve the right to have
requirements unique to specific Withdrawal Benefit Factors if we make other
Withdrawal Benefit Factors available in the future, including specific model
portfolio options ("Model Portfolio Options") as described below, available
only to certain Withdrawal Benefit Factors.
When you add the SureIncome Option to your Contract, you must allocate your
entire Contract Value as follows:
1) to a Model Portfolio Option available as described below;
2) to the DCA Fixed Account Option and then transfer all purchase payments (and
Credit Enhancements for Consultant Solutions Plus Contracts) and interest to
the Variable Sub-Accounts; or
3) to a combination of (1) and (2) above.
For (2) and (3) above, the requirements for the DCA Fixed Account Option must
be met. See the "Dollar Cost Averaging Fixed Account Option" section of this
prospectus for more information.
On the Rider Date, you must select only one of the Model Portfolio Options in
which to allocate your Contract Value. After the Rider Date, you may transfer
your entire Contract Value to any of the other available Model Portfolio
Options. We currently offer several Model Portfolio Options. The Model
Portfolio Options that are available may differ depending upon the effective
date of your Withdrawal Benefit Option and your Withdrawal Benefit Factor.
Please refer to the Model Portfolio Option and TrueBalance/SM/ Model Portfolio
Options sections for more details. We may add other Model Portfolio Options in
the future. We also may remove Model Portfolio Options in the future anytime
prior to the date you select such Model Portfolio Option. In addition, if the
investment alternatives available under the Contract change, we may revise the
Model Portfolio Options. The following table summarizes the Model Portfolio
Options currently available for use:
*Model Portfolio Option 1
- --------------------------------------------------------------------------------
*TrueBalance Conservative Model Portfolio Option
*TrueBalance Moderately Conservative Model Portfolio Option
*TrueBalance Moderate Model Portfolio Option
*TrueBalance Moderately Aggressive Model Portfolio Option
*TrueBalance Aggressive Model Portfolio Option
- --------------------------------------------------------------------------------
30 PROSPECTUS
You may not allocate any of your Contract Value to the Standard Fixed Account
Option or to the Market Value Adjusted Fixed Account Option. You must transfer
any portion of your Contract Value that is allocated to the Standard Fixed
Account Option or to the Market Value Adjusted Fixed Account Option to the
Variable Sub-Accounts prior to adding the SureIncome Option to your Contract.
Transfers from the Market Value Adjusted Fixed Account Option may be subject to
a Market Value Adjustment. You may allocate any portion of your purchase
payments (and Credit Enhancements for Consultant Solutions Plus Contracts) to
the DCA Fixed Account Option on the Rider Date, provided the DCA Fixed Account
Option is available with your Contract and in your state. See the "Dollar Cost
Averaging Fixed Account Option" section of this prospectus for more
information. We use the term "Transfer Period Account" to refer to each
purchase payment allocation made to the DCA Fixed Account Option for a
specified term length. At the expiration of a Transfer Period Account any
remaining amounts in the Transfer Period Account will be transferred to the
Variable Sub-Accounts according to your most recent percentage allocation
selections.
Any subsequent purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) made to your Contract will be allocated to the
Variable Sub-Accounts according to your specific instructions or your
allocation for the previous purchase payment, unless you request that the
purchase payment (and Credit Enhancement for Consultant Solutions Plus
Contracts) be allocated to the DCA Fixed Account Option. Purchase payments
allocated to the DCA Fixed Account Option must be $500 or more. Any withdrawals
you request will reduce your Contract Value invested in each of the investment
alternatives on a pro rata basis in the proportion that your Contract Value in
each bears to your total Contract Value in all Variable Sub-Accounts, unless
you request otherwise.
Model Portfolio Option 1.
If you choose Model Portfolio Option 1 or transfer your entire Contract Value
into Model Portfolio Option 1, you currently may allocate up to 100% of your
Contract Value in any manner you choose to the Available Variable Sub-Accounts
shown in the table below. You may not allocate ANY PORTION of your Contract
Value to the Excluded Variable Sub-Accounts. You may make transfers among any
of the Available Variable Sub-Accounts. However, each transfer you make will
count against the 12 transfers you can make each Contract Year without paying a
transfer fee.
Currently the Available Variable Sub-Accounts and the Excluded Variable
Sub-Accounts are as follows:
Available
- --------------------------------------------------------------------------------
AIM V.I. Basic Value - Series II Sub-Account
AIM V.I. Core Equity - Series II Sub-Account
AIM V.I. Mid Cap Core Equity - Series II Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Equity-Income - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Investment Grade Bond - Service Class 2 Sub-Account
Fidelity VIP Overseas - Service Class 2 Sub-Account
Fidelity VIP Asset Manager/(SM)/ - Service Class 2 Sub-Account
Fidelity VIP Money Market - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Janus Aspen Series Forty - Service Shares Sub-Account
Janus Aspen Series Perkins Mid Cap Value - Service Shares Sub-Account
Janus Aspen Series INTECH Risk-Managed Core - Service Shares Sub-Account
Janus Aspen Series Balanced - Service Shares Sub-Account
Legg Mason Partners Variable All Cap - Class II Sub-Account/(1)/
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
Legg Mason Partners Variable Investors - Class II Sub-Account/(2)/
MFS Investors Trust - Service Class Sub-Account
MFS High Income - Service Class Sub-Account
MFS Investors Growth Stock - Service Class Sub-Account
MFS Total Return - Service Class Sub-Account
MFS Value - Service Class Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares Sub-Account
PIMCO VIT Money Market - Administrative Shares Sub-Account
PIMCO VIT Real Return - Administrative Shares Sub-Account
PIMCO VIT Total Return - Administrative Shares Sub-Account
Rydex VT All-Cap Opportunity Sub-Account
T. Rowe Price Equity Income - II Sub-Account
T. Rowe Price Blue Chip Growth - II Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(1)/
Van Eck Worldwide Multi-Manager Alternatives Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
Van Kampen LIT Government, Class II Sub-Account
- --------------------------------------------------------------------------------
Excluded
- --------------------------------------------------------------------------------
AIM V.I. Capital Appreciation - Series II Sub-Account
Alger American LargeCap Growth - Class S Sub-Account
Alger American Capital Appreciation - Class S Sub-Account
Alger American MidCap Growth - Class S Sub-Account
Fidelity VIP Growth - Service Class 2 Sub-Account
MFS New Discovery - Service Class Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
UIF Capital Growth, Class II Sub-Account/(3)/
Van Eck Worldwide Emerging Markets Sub-Account
Van Eck Worldwide Hard Assets Sub-Account
Van Kampen LIT Mid Cap Growth, Class II Sub-Account
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap Portfolio
- Class II was reorganized into the Legg Mason Partners Variable Fundamental
Value Portfolio - Class I.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
(3)Morgan Stanley Investment Management Inc., the investment advisor to the UIF
Portfolios, does business in certain instances as Van Kampen.
TrueBalance/SM/ Model Portfolio Options.
If you choose one of the TrueBalance/SM/ Model Portfolio Options or transfer
your entire Contract Value into one of the TrueBalance/SM/ Model Portfolio
Options, you may not choose the Variable Sub-Accounts or make transfers among
the Variable Sub-Accounts in the TrueBalance Model Portfolio Option. Each
TrueBalance Model
31 PROSPECTUS
Portfolio involves an allocation of assets among a group of pre-selected
Variable Sub-Accounts. You cannot make transfers among the Variable
Sub-Accounts nor vary the Variable Sub-Accounts that comprise a TrueBalance
Model Portfolio Option. If you choose a TrueBalance Model Portfolio Option, we
will invest and periodically reallocate your Contract Value according to the
allocation percentages and requirements for the TrueBalance Model Portfolio
Option you have selected currently. For more information regarding the
TrueBalance program, see the "TrueBalance/SM/ Asset Allocation Program" section
of this prospectus. However, note that the restrictions described in this
section, specifically the restrictions on transfers and the requirement that
all of your Contract Value be allocated to a TrueBalance Model Portfolio
Option, apply to the TrueBalance program only if you have added the SureIncome
Option to your Contract.
Cancellation of the SureIncome Option
You may not cancel the SureIncome Option prior to the 5th calendar year
anniversary of the Rider Date. On or after the 5th calendar year anniversary of
the Rider Date you may cancel the rider by notifying us in writing in a form
satisfactory to us. We reserve the right to extend the date at which time the
cancellation may occur to up to the 10th calendar year anniversary of the Rider
Date at any time in our sole discretion. Any change we make will not apply to a
SureIncome Option that was added to your Contract prior to the implementation
date of the change.
Rider Trade-In Option
We offer a "Rider Trade-In Option" that allows you to cancel your SureIncome
Option and immediately add a new Withdrawal Benefit Option ("New SureIncome
Option"). We may also offer other Options ("Other New Options") under the Rider
Trade-In Option. However, you may only select one Option under this Rider
Trade-In Option at the time you cancel your SureIncome Option. Currently, we
are also making the TrueReturn Accumulation Benefit Option available at the
time of your first utilization of this Rider Trade-In Option so that you have
the ability to switch from the SureIncome Option to the TrueReturn Accumulation
Benefit Option. We may discontinue offering the TrueReturn Option under the
Rider Trade-In Option for New SureIncome Options added in the future at anytime
at our discretion.
This Rider Trade-in Option is available provided all of the following
conditions are met:
.. The trade-in must occur on or after the 5th calendar year anniversary of
the Rider Date. We reserve the right to extend the date at which time the
trade-in may occur to up to the 10th calendar year anniversary of the Rider
Date at any time in our sole discretion. Any change we make will not apply
to a SureIncome Option that was added to your Contract prior to the
implementation date of the change.
.. The New Option will be made a part of your Contract on the date the
existing Option is cancelled, provided it is cancelled for reasons other
than the termination of your Contract.
.. The New Option must be an Option that we make available for use with this
Rider Trade-In Option.
.. The issue requirements and terms and conditions of the New Option must be
met as of the date the New Option is made a part of your Contract.
If the New Option is a SureIncome Option, the New Option must provide that the
new Benefit Payment be greater than or equal to your current Benefit Payment as
of the date the Rider Trade-In Option is exercised, if applicable.
You should consult with your sales representative before trading in your
SureIncome Option.
Death of Owner or Annuitant.
If the Contract Owner dies before the Rider Maturity Date and the Contract is
continued under Option D of the Death of Owner provision of your Contract, as
described on page 62 of your prospectus, then the SureIncome Option will
continue, unless the new Contract Owner elects to cancel this Option. If the
SureIncome Option is continued, it will remain in effect until terminated. If
the Contract is not continued under Option D, then the SureIncome Option will
terminate on the date we receive a Complete Request for Settlement of the Death
Proceeds.
If an Annuitant dies before the Payout Start Date, and the Contract is
continued under Category 1 of the Death of Annuitant provision of the Contract,
the SureIncome Option will remain in effect until terminated. If the Contract
is not continued under Category 1, then the SureIncome Option will terminate on
the date we receive a complete request for settlement of the Death Proceeds.
Termination of the SureIncome Option
This SureIncome Option will terminate on the earliest of the following to occur:
.. The Benefit Base is reduced to zero;
.. On the Payout Start Date (except if the Contract enters the Withdrawal
Benefit Payout Phase as defined under the Withdrawal Benefit Payout Phase
section);
.. On the date the Contract is terminated;
.. On the date the SureIncome Option is cancelled;
.. On the date we receive a Complete Request for Settlement of the Death
Proceeds; or
.. On the date the SureIncome Option is replaced with a New Option under the
Rider Trade-In Option.
32 PROSPECTUS
Investment Alternatives: The Variable Sub-accounts
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 47 Variable Sub-accounts. Each
Variable Sub-account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and
risks associated with each Portfolio, please refer to the prospectuses for the
Funds. We will mail to you a prospectus for each Portfolio related to the
Variable Sub-Accounts to which you allocate your purchase payment.
You should carefully consider the investment objectives, risks, charges and
expenses of the investment alternatives when making an allocation to the
Variable Sub-Accounts. To obtain any or all of the underlying Portfolio
prospectuses, please contact us at 800-457-7617.
Portfolio Investment Objective Investment Adviser
- --------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund - Series II Long-term growth of capital
Invesco A I M Advisors, Inc./(1)/
Sub-adviser: Invesco Trimark
Investment Management Inc.;
Invesco Global Asset
Management (N.A.), Inc.;
Invesco Institutional (N.A.),
Inc.; Invesco Senior Secured
- ----------------------------------------------------------------------------------Management, Inc.; Invesco
AIM V.I. Capital Appreciation Fund - Growth of capital Hong Kong Limited; Invesco
Series II Asset Management Limited;
- ----------------------------------------------------------------------------------Invesco Asset Management
AIM V.I. Core Equity Fund - Series II Growth of capital (Japan) Limited; Invesco Asset
- ----------------------------------------------------------------------------------Management Deutschland,
AIM V.I. Mid Cap Core Equity Fund - Long-term growth of capital GmbH; and Invesco Australia
Series II Limited
- ----------------------------------------------------------------------------------
The Alger American Fund
- --------------------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Long-term capital appreciation
Portfolio - Class S
- ----------------------------------------------------------------------------------Fred Alger Management, Inc.
Alger American Capital Appreciation Long-term capital appreciation
Portfolio - Class S
- ----------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio Long-term capital appreciation
- Class S
- ----------------------------------------------------------------------------------
Fidelity(R) Variable Insurance Products
- --------------------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager/(SM)/ High total return with reduced risk
Portfolio - Service Class 2 over the long term by allocating its
assets among stocks, bonds, and
short-term instruments.
- ----------------------------------------------------------------------------------
Fidelity VIP Contrafund(R) Portfolio - Long-term capital appreciation
Service Class 2
- ----------------------------------------------------------------------------------Fidelity Management &
Fidelity VIP Equity-Income Portfolio - Reasonable income. The fund will also Research Company
Service Class 2 consider the potential for capital
appreciation. The fund's goal is to
achieve a yield which exceeds the
composite yield on the securities
comprising the Standard & Poor's
500/(SM)/ Index (S&P 500(R)).
- ----------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio - Service To achieve capital appreciation
Class 2
- ----------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio - Investment results that correspond to
Service Class 2 the total return of common stocks
publicly traded in the United States
as represented by the Standard &
Poor's 500/(SM)/ Index (S&P 500(R))
- ----------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond As high a level of current income as is
Portfolio - Service Class 2 consistent with the preservation of
capital
- ----------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio - As high a level of current income as is
Service Class 2 consistent with preservation of
capital and daily liquidity.
- ----------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio - Long-term growth of capital
Service Class 2
- ----------------------------------------------------------------------------------
33 PROSPECTUS
Portfolio Investment Objective Investment Adviser
- ---------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
- ---------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio - Long-term capital growth, consistent with preservation
Service Shares of capital and balanced by current income
- --------------------------------------------------------------------------------------------------
Janus Aspen Series Overseas Portfolio - Long-term growth of capital.
Service Shares (formerly named Janus Janus Capital Management
Aspen Series International Growth LLC
Portfolio - Service Shares)
- --------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio - Long-term growth of capital
Service Shares
- --------------------------------------------------------------------------------------------------
Janus Aspen Series Perkins Mid Cap Capital appreciation
Value Portfolio - Service Shares
(formerly named Janus Aspen Series Mid
Cap Value Portfolio - Service Shares)
- --------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Long-term growth of capital
Core Portfolio - Service Shares
- --------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Equity
Trust
- ---------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Long-term capital growth with current income as a
Fundamental Value Portfolio - Class secondary consideration Legg Mason Partners Fund
I/(2)/ Advisor, LLC
- --------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Long-term growth of capital with current income as a
Portfolio - Class I/(3)/ secondary objective
- --------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Income
Trust
- ---------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global Maximum total return, consistent with preservation of Legg Mason Partners Fund
High Yield Bond Portfolio - Class II capital Advisor, LLC
- ---------------------------------------------------------------------------------------------------------------------------
MFS(R) Variable Insurance Trust/(SM)/
- ---------------------------------------------------------------------------------------------------------------------------
MFS High Income Series - Service Class Total return with an emphasis on high current income,
but also considering capital appreciation
- --------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series - Capital appreciation
Service Class
- --------------------------------------------------------------------------------------------------MFS(TM) Investment
MFS Investors Trust Series - Service Capital appreciation Management
Class
- --------------------------------------------------------------------------------------------------
MFS New Discovery Series - Service Class Capital appreciation
- --------------------------------------------------------------------------------------------------
MFS Total Return Series - Service Class Total return
- --------------------------------------------------------------------------------------------------
MFS Value Series - Service Class Capital appreciation
- --------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
- ---------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA - Long-term capital appreciation by investing a
Service Shares substantial portion of assets in securities of foreign
issuers, growth-type companies, cyclical industries OppenheimerFunds, Inc.
and special situations that are considered to have
appreciation possibilities.
- --------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Capital appreciation.
Fund(R)/VA - Service Shares
- --------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA - Service Capital appreciation by investing in "growth type"
Shares companies.
- --------------------------------------------------------------------------------------------------
PIMCO Variable Insurance Trust
- ---------------------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Maximum total return, consistent with preservation of
Dollar- Hedged) - Administrative Shares capital and prudent investment management.
- --------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio - Maximum current income, consistent with preservation Pacific Investment
Administrative Shares of capital and daily liquidity Management Company LLC
- --------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio - Maximum real return, consistent with preservation of
Administrative Shares real capital and prudent investment management
- --------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio - Maximum total return, consistent with preservation of
Administrative Shares capital and prudent investment management.
- --------------------------------------------------------------------------------------------------
The Rydex Variable Trust
- ---------------------------------------------------------------------------------------------------------------------------
Rydex VT All-Cap Opportunity Fund Long-term capital appreciation. Rydex Investments
(formerly named Rydex VT Sector
Rotation Fund)
- ---------------------------------------------------------------------------------------------------------------------------
34 PROSPECTUS
Portfolio Investment Objective Investment Adviser
- -----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Series, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Long-term capital growth. Income is a secondary
Portfolio - II objective. T. Rowe Price Associates,
- ---------------------------------------------------------------------------------------------------Inc.
T. Rowe Price Equity Income Portfolio - Substantial dividend income as well as long-term
II growth of capital.
- ---------------------------------------------------------------------------------------------------
The Universal Institutional Funds, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II Long-term capital appreciation by investing primarily
in growth-oriented equity securities of large Morgan Stanley Investment
capitalization companies. Management, Inc./(4)/
- ---------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II Above average current income and long-term capital
appreciation by investing primarily in equity
securities of companies in the U.S. real estate
industry, including real estate investment trusts.
- ---------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust
- -----------------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Multi-Manager Consistent absolute (positive) returns in various market
Alternatives Fund (formerly named Van cycles
Eck Worldwide Absolute Return Fund) Van Eck Associates
- ---------------------------------------------------------------------------------------------------Corporation
Van Eck Worldwide Emerging Markets Fund Long-term capital appreciation by investing primarily
in equity securities in emerging markets around the
world
- ---------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund Long-term capital appreciation by investing primarily
in "hard asset securities" with income as a secondary
consideration
- ---------------------------------------------------------------------------------------------------
Van Kampen Life Investment Trust
- -----------------------------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Capital growth
Portfolio, Class II
- ---------------------------------------------------------------------------------------------------Van Kampen Asset
Van Kampen LIT Government Portfolio, High current return consistent with preservation of Management
Class II capital
- ---------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Long-term growth of capital and income.
Portfolio, Class II
- ---------------------------------------------------------------------------------------------------
(1) The investment objective(s) of each sub-account may be changed by the Board
of Directors without shareholder approval.
(2) Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio - Class I.
(3) Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
(4) Morgan Stanley Investment Management Inc., the investment advisor to the
Van Kampen UIF Portfolios, does business in certain instances as Van Kampen.
Amounts you allocate to Variable Sub-accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Portfolios in which those Variable Sub-accounts invest. You bear the
investment risk that the Portfolios might not meet their investment objectives.
Shares of the Portfolios are not deposits in, or obligations of, or guaranteed
or endorsed by, any bank and are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency.
TRUEBALANCE/SM/ ASSET ALLOCATION PROGRAM
The TrueBalance asset allocation program ("TrueBalance program") is no longer
offered for new enrollments. If you enrolled in the TrueBalance program prior
to January 31, 2008, you may remain in the program. If you terminate your
enrollment or otherwise transfer your Contract Value out of the program, you
may not re-enroll.
There is no additional charge for the TrueBalance program. Participation in the
TrueBalance program may be limited if you have elected certain Contract Options
that impose restrictions on the investment alternatives which you may invest,
such as the Income Protection Benefit Option, the TrueReturn Accumulation
Benefit Option or a Withdrawal Benefit Option. See the sections of this
prospectus discussing these Options for more information.
Asset allocation is the process by which your Contract Value is invested in
different asset classes in a way that matches your risk tolerance, time
horizon, and investment goals. Theoretically, different asset classes tend to
behave differently under various economic and market conditions. By spreading
your Contract Value across a range of asset classes, you may, over time, be
able to reduce the risk of investment volatility and potentially enhance
returns. Asset allocation does not guarantee a profit or protect against loss
in a declining market.
35 PROSPECTUS
Your sales representative helps you determine whether participating in an asset
allocation program is appropriate for you. You complete a questionnaire to
identify your investment style. Based on your investment style, you select one
asset allocation model portfolio among the available model portfolios which may
range from conservative to aggressive. Your Contract Value is allocated among
the Variable Sub-Accounts according to your selected model portfolio. Not all
Variable Sub-Accounts are available in any one model portfolio, and you must
only allocate your Contract Value to the limited number of Variable
Sub-Accounts available in the model portfolio you select. You should not select
a model portfolio without first consulting with your sales representative.
Lincoln Benefit and the principal underwriter of the Contracts, ALFS, Inc., do
not intend to provide any personalized investment advice in connection with the
TrueBalance program and you should not rely on this program as providing
individualized investment recommendations to you.
Lincoln Benefit retained an independent investment management firm ("investment
management firm") to construct the TrueBalance model portfolios. The investment
management firm does not provide advice to Lincoln Benefit's Contract Owners.
Neither Lincoln Benefit nor the investment management firm is acting for any
Contract Owner as a "fiduciary" or as an "investment manager," as such terms
are defined under applicable laws and regulations relating to the Employee
Retirement Income Security Act of 1974 (ERISA).
The investment management firm does not take into account any information about
any Contract Owner or any Contract Owner's assets when creating, providing or
maintaining any TrueBalance model portfolio. Individual Contract Owners should
ultimately rely on their own judgment and/or the judgment of a financial
advisor in making their investment decisions. Neither Lincoln Benefit nor the
investment management firm is responsible for determining the suitability of
the TrueBalance model portfolios for the Contract Owners' purposes.
Each of the five model portfolios specifies an allocation among a mix of
Variable Sub-Accounts that considers the investment goals of the applicable
investment style. On the business day we accept your participation in the
TrueBalance program, we will automatically reallocate any existing Contract
Value in the Variable Sub-Accounts according to the model portfolio you
selected. If any portion of your existing Contract Value is allocated to the
Standard Fixed Account or MVA Fixed Account Options and you wish to allocate
any portion of it to the model portfolio, you must transfer that portion to the
Variable Sub-Accounts. In addition, as long as you participate in the
TrueBalance program, you must allocate all of your purchase payments (and
Credit Enhancements for Consultant Solutions Plus Contracts) to the Fixed
Account Options and/or the Variable Sub-Accounts currently offered in your
model portfolio. Any purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) you allocate to the DCA Fixed Account Option will be
automatically transferred, along with interest, in equal monthly installments
to the Variable Sub-Accounts according to the model portfolio you selected.
We use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. At
the expiration of a Transfer Period Account any remaining amounts in the
Transfer Period Account will be transferred to the Variable Sub-Account
according to the percentage allocation for the model portfolio you selected.
Lincoln Benefit may offer new or revised TrueBalance model portfolios at any
time, and may retain a different investment management firm to create any such
new or revised TrueBalance model portfolios. Lincoln Benefit will not
automatically reallocate your Contract Value allocated to the Variable
Sub-Accounts to match any new or revised model portfolios that are offered. If
you are invested in the TrueBalance model portfolio, your registered
representative or the selling broker-dealer will notify you of any new or
revised TrueBalance model portfolios that may be made available. If you wish to
invest in accordance with a new or revised TrueBalance model portfolio, you
must submit a transfer request to transfer your Contract Value in your existing
TrueBalance model portfolio to the new TrueBalance model portfolio. If you do
not request a transfer to a new TrueBalance model portfolio, we will continue
to rebalance your Contract Value in accordance with your existing TrueBalance
model portfolio. At any given time, you may only elect a TrueBalance model
portfolio that is available at the time of election.
You may select only one model portfolio at a time. However, you may change your
selection of model portfolio at any time, provided you select only a currently
available model portfolio. Each change you make in your model portfolio
selection will count against the 12 transfers you can make each Contract Year
without paying a transfer fee. You should consult with your sales
representative before making a change to your model portfolio selection to
determine whether the new model portfolio is appropriate for your needs.
Since the performance of each Variable Sub-Account may cause a shift in the
percentage allocated to each Variable Sub-Account, at least once every calendar
quarter we will automatically rebalance all of your Contract Value in the
Variable Sub-Accounts according to your currently selected model portfolio.
Unless you notify us otherwise, any purchase payments you make after electing
the TrueBalance program will be allocated to your model portfolio and/or to the
Fixed Account Options according to your most recent
36 PROSPECTUS
instructions on file with us. Once you elect to participate in the TrueBalance
program, you may allocate subsequent purchase payments to any of the Fixed
Account Options available with your Contract and/or to any of the Variable
Sub-Accounts included in your model portfolio, but only according to the
allocation specifications of that model portfolio. You may not allocate
subsequent purchase payments to a Variable Sub-Account that is not included in
your model portfolio. Subsequent purchase payments allocated to the Variable
Sub-Accounts will be automatically rebalanced at the end of the next calendar
quarter according to the allocation percentages for your currently selected
model portfolio.
You may not make transfers from the Variable Sub-Accounts to any of the other
Variable Sub-Accounts. You may make transfers, as allowed under the contract,
from the Fixed Account Options to other Fixed Account Options or to the
Variable Sub-Accounts included in your model portfolio, but only according to
the allocation specifications of that model portfolio. You may make transfers
from the Variable Sub-Accounts to any of the Fixed Account Options, except the
DCA Fixed Account Option. Transfers to Fixed Account Options may be
inconsistent with the investment style you selected and with the purpose of the
TrueBalance program. However, all of your Contract Value in the Variable
Sub-Accounts will be automatically rebalanced at the end of the next calendar
quarter according to the percentage allocations for your currently selected
model portfolio. You should consult with your sales representative before
making transfers.
If you own the TrueReturn Accumulation Benefit Option, on the Rider Maturity
Date the Contract Value may be increased due to the TrueReturn Accumulation
Benefit Option. Any increase will be allocated to the PIMCO VIT Money Market -
Administrative Shares Sub-Account. You may make transfers from this Variable
Sub-Account to the Fixed Account Options (as allowed) or the Variable
Sub-Accounts included in your model portfolio, but only according to the
allocation specification of that model portfolio. All of your Contract Value in
the Variable Sub-Accounts will be automatically rebalanced at the end of the
next calendar quarter according to the percentage allocations for your
currently selected model portfolio.
If you make a partial withdrawal from any of the Variable Sub-Accounts, your
remaining Contract Value in the Variable Sub-Accounts will be automatically
rebalanced at the end of the next calendar quarter according to the percentage
allocations for your currently selected model portfolio. If you are
participating in the Systematic Withdrawal Program when you add the TrueBalance
program or change your selection of model portfolios, you may need to update
your withdrawal instructions. If you have any questions, please consult your
sales representative.
Your participation in the TrueBalance program is subject to the program's terms
and conditions, and you may change model portfolios or terminate your
participation in the TrueBalance program at any time by notifying us in a form
satisfactory to us. We reserve the right to modify or terminate the TrueBalance
program at any time.
Investment Alternatives: The Fixed Account Options
- --------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts) to the Fixed Account
Options. The Fixed Account Options we offer include the Dollar Cost Averaging
Fixed Account Option, the Standard Fixed Account Option, and the Market Value
Adjusted Fixed Account Option. We may offer additional Fixed Account Options in
the future. Some Options are not available in all states. In addition, Lincoln
Benefit may limit the availability of some Fixed Account Options. Please
consult with your representative for current information. The Fixed Account
supports our insurance and annuity obligations. The Fixed Account consists of
our general assets other than those in segregated asset accounts. We have sole
discretion to invest the assets of the Fixed Account, subject to applicable
law. Any money you allocate to the Fixed Account does not entitle you to share
in the investment experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
The Dollar Cost Averaging Fixed Account Option ("DCA Fixed Account Option") is
one of the investment alternatives that you can use to establish a Dollar Cost
Averaging Program, as described on page 43.
This option allows you to allocate purchase payments (and Credit Enhancements
for Consultant Solutions Plus Contracts) to the Fixed Account that will then
automatically be transferred, along with interest, in equal monthly
installments to the investment alternatives that you have selected. In the
future, we may offer other installment frequencies in our discretion. Each
purchase payment allocated to the DCA Fixed Account Option must be at least
$100.
At the time you allocate a purchase payment to the DCA Fixed Account Option,
you must specify the term length over which the transfers are to take place. We
use the term "Transfer Period Account" to refer to each purchase payment
allocation made to the DCA Fixed Account Option for a specified term length. You
37 PROSPECTUS
establish a new Transfer Period Account each time you allocate a purchase
payment to the DCA Fixed Account Option. We currently offer term lengths from
which you may select for your Transfer Period Account(s), ranging from 3 to 12
months. We may modify or eliminate the term lengths we offer in the future.
Refer to Appendix A for more information.
Your purchase payments (and Credit Enhancements for Consultant Solutions Plus
Contracts) will earn interest while in the DCA Fixed Account Option at the
interest rate in effect at the time of the allocation, depending on the term
length chosen for the Transfer Period Account and the type of Contract you
have. The interest rates may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the DCA Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. This minimum interest rate will not change after
Contract issue.
You must transfer all of your money, plus accumulated interest, out of a
Transfer Period Account to other investment alternatives in equal monthly
installments during the term of the Transfer Period Account. We reserve the
right to restrict the investment alternatives available for transfers from any
Transfer Period Account. You may not transfer money from the Transfer Period
Accounts to any of the Fixed Account Options available under your Contract. The
first transfer will occur on the 25th day after you establish a Transfer Period
Account and monthly thereafter. If we do not receive an allocation instruction
from you when we receive the purchase payment, we will transfer each
installment to the money market Variable Sub-account until we receive a
different allocation instruction. At the expiration of a Transfer Period
Account any remaining amounts in the Transfer Period Account will be
transferred to the PIMCO VIT Money Market - Administrative Shares Sub-Account
unless you request a different investment alternative. Transferring Contract
Value to the PIMCO VIT Money Market - Administrative Shares Sub-Account in this
manner may not be consistent with the theory of dollar cost averaging described
on page 43.
If you discontinue the DCA Fixed Account Option before the expiration of a
Transfer Period Account, we will transfer any remaining amount in the Transfer
Period Account to the PIMCO VIT Money Market - Administrative Shares
Sub-Account unless you request a different investment alternative.
If you have a TrueReturn Option or SureIncome Option, at the expiration of a
Transfer Period Account or if you discontinue the DCA Fixed Account Option any
amounts remaining in the Transfer Period Account will be transferred according
to the investment requirements applicable to the Option you selected.
You may not transfer money into the DCA Fixed Account Option or add to an
existing Transfer Period Account. You may not use the Automatic Additions
Program to allocate purchase payments to the DCA Fixed Account Option.
The DCA Fixed Account Option currently is not available if you have selected
the Consultant Solutions Select Contract.
The DCA Fixed Account Option may not be available in your state. Please check
with your representative for availability.
STANDARD FIXED ACCOUNT OPTION
If you have selected the Consultant Solutions Classic Contract, you may
allocate purchase payments or transfer amounts into the Standard Fixed Account
Option. Each such allocation establishes a "Guarantee Period Account" within
the Standard Fixed Account Option ("Standard Fixed Guarantee Period Account"),
which is defined by the date of the allocation. You may not allocate a purchase
payment or transfer to any existing Guarantee Period Account. Each purchase
payment or transfer allocated to a Standard Fixed Guarantee Period Account must
be at least $100.
The Standard Fixed Account Option is not available in all states.
At the time you allocate a purchase payment or transfer amount to the Standard
Fixed Account Option, you must select the Guarantee Period for that allocation
from among the available Standard Fixed Guarantee Periods. We currently offer
Standard Fixed Guarantee Periods of 1 year in length for Consultant Solutions
Classic. For Consultant Solutions Plus, Select and Elite Contracts, we
currently are not offering the Standard Fixed Account Option. Refer to Appendix
A for more information. We may offer other Guarantee Periods in the future. If
you allocate a purchase payment to the Standard Fixed Account Option, but do
not select a Standard Fixed Guarantee Period for the new Standard Fixed
Guarantee Period Account, we will allocate the purchase payment or transfer to
a new Standard Fixed Guarantee Period Account with the same Standard Fixed
Guarantee Period as the Standard Fixed Guarantee Period Account of your most
recent purchase payment or transfer. If we no longer offer that Standard Fixed
Guarantee Period, then we will allocate the purchase payment or transfer to a
new Standard Fixed Guarantee Period Account with the next shortest term
currently offered. If you have not made a prior allocation to a Guarantee
Period Account, then we will allocate the purchase payment or transfer to a new
Standard Fixed Guarantee Period Account of the shortest Standard Fixed
Guarantee Period we are offering at that time.
Some Standard Fixed Guarantee Periods are not available in all states. Please
check with your representative for availability.
The amount you allocate to a Standard Fixed Guarantee Period Account will earn
interest at the interest rate in effect for that Standard Fixed Guarantee
Period at the
38 PROSPECTUS
time of the allocation. Interest rates may differ depending on the type of
Contract you have and may also differ from those available for other Fixed
Account Options. The minimum interest rate associated with the Standard Fixed
Account Option is based upon state requirements and the date an application to
purchase a Contract is signed. This minimum interest rate will not change after
Contract issue.
In any Contract Year, the combined amount of withdrawals and transfers from a
Standard Fixed Guarantee Period Account may not exceed 30% of the amount used
to establish that Standard Fixed Guarantee Period Account. This limitation is
waived if you withdraw your entire Contract Value. It is also waived for
amounts in a Standard Fixed Guarantee Period Account during the 30 days
following its renewal date ("30-Day Window"), described below, and for a single
withdrawal made by your surviving spouse within one year of continuing the
Contract after your death.
Amounts under the 30% limit that are not withdrawn in a Contract Year do not
carry over to subsequent Contract Years.
At the end of a Standard Fixed Guarantee Period and each year thereafter, we
will declare a renewal interest rate that will be guaranteed for 1 year.
Subsequent renewal dates will be on the anniversaries of the first renewal
date. Prior to a renewal date, we will send you a notice that will outline the
options available to you. During the 30-Day Window following the expiration of
a Standard Fixed Guarantee Period Account, the 30% limit for transfers and
withdrawals from that Guarantee Period Account is waived and you may elect to:
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to establish a new Guarantee Period Account within the Standard
Fixed Account Option; or
.. transfer all or part of the money from the Standard Fixed Guarantee Period
Account to other investment alternatives available at the time; or
.. withdraw all or part of the money from the Standard Fixed Guarantee Period
Account. Withdrawal charges and taxes may apply.
Withdrawals taken to satisfy IRS minimum distribution rules will count against
the 30% limit. The 30% limit will be waived for a Contract Year to the extent
that:
.. you have already exceeded the 30% limit and you must still make a
withdrawal during that Contract Year to satisfy IRS minimum distribution
rules; or
.. you have not yet exceeded the 30% limit but you must make a withdrawal
during that Contract Year to satisfy IRS minimum distribution rules, and
such withdrawal will put you over the 30% limit.
The money in the Standard Fixed Guarantee Period Account will earn interest at
the declared renewal rate from the renewal date until the date we receive
notification of your election. If we receive notification of your election to
make a transfer or withdrawal from a renewing Standard Fixed Guarantee Period
Account on or before the renewal date, the transfer or withdrawal will be
deemed to have occurred on the renewal date. If we receive notification of your
election to make a transfer or withdrawal from the renewing Standard Fixed
Guarantee Period Account after the renewal date, but before the expiration of
the 30-Day Window, the transfer or withdrawal will be deemed to have occurred
on the day we receive such notice. Any remaining balance not withdrawn or
transferred from the renewing Standard Fixed Guarantee Period Account will
continue to earn interest until the next renewal date at the declared renewal
rate. If we do not receive notification from you within the 30-Day Window, we
will assume that you have elected to renew the Standard Fixed Guarantee Period
Account and the amount in the renewing Standard Fixed Guarantee Period Account
will continue to earn interest at the declared renewal rate until the next
renewal date, and will be subject to all restrictions of the Standard Fixed
Account Option.
The Standard Fixed Account Option currently is available only with the
Consultant Solutions Classic Contract.
MARKET VALUE ADJUSTED FIXED ACCOUNT OPTION
You may allocate purchase payments or transfer amounts into the Market Value
Adjusted Fixed Account Option. Each such allocation establishes a Guarantee
Period Account within the Market Value Adjusted Fixed Account Option ("Market
Value Adjusted Fixed Guarantee Period Account"), which is defined by the date
of the allocation and the length of the initial interest rate guarantee period
("Market Value Adjusted Fixed Guarantee Period"). You may not allocate a
purchase payment or transfer to any existing Guarantee Period Account. Each
purchase payment or transfer allocated to a Market Value Adjusted Fixed
Guarantee Period Account must be at least $100.
At the time you allocate a purchase payment or transfer amount to the Market
Value Adjusted Fixed Account Option, you must select the Guarantee Period for
that allocation from among the Guarantee Periods available for the Market Value
Adjusted Fixed Account Option. We currently offer Market Value Adjusted Fixed
Guarantee Periods of 1, 3, 5, 7, and 10 years. Refer to Appendix A for more
information. We may offer other Guarantee Periods in the future. If you
allocate a purchase payment to the Market Value Adjusted Fixed Account Option,
but do not select a Market Value Adjusted Fixed Guarantee Period for the new
Market Value Adjusted Fixed Guarantee Period Account, we will allocate the
purchase payment or transfer to a new Market Value Adjusted Fixed Guarantee
Period Account with the same Market Value Adjusted Fixed Guarantee
39 PROSPECTUS
Period as the Market Value Adjusted Fixed Guarantee Period Account of your most
recent purchase payment or transfer. If we no longer offer that Market Value
Adjusted Fixed Guarantee Period, then we will allocate the purchase payment or
transfer to a new Market Value Adjusted Fixed Guarantee Period Account with the
next shortest term currently offered. If you have not made a prior allocation
to a Market Value Adjusted Fixed Guarantee Period Account, then we will
allocate the purchase payment or transfer to a new Market Value Adjusted Fixed
Guarantee Period Account of the shortest Market Value Adjusted Fixed Guarantee
Period we are offering at that time. The Market Value Adjusted Fixed Account
Option is not available in all states. Please check with your representative
for availability.
The amount you allocate to a Market Value Adjusted Fixed Guarantee Period
Account will earn interest at the interest rate in effect for that Market Value
Adjusted Fixed Guarantee Period at the time of the allocation. Interest rates
may differ depending on the type of Contract you have and may also differ from
those available for other Fixed Account Options.
Withdrawals and transfers from a Market Value Adjusted Fixed Guarantee Period
Account may be subject to a Market Value Adjustment. A Market Value Adjustment
may also apply to amounts in the Market Value Adjusted Fixed Account Option if
we pay Death Proceeds or if the Payout Start Date begins on a day other than
during the 30-day period after such Market Value Adjusted Fixed Guarantee
Period Account expires ("30-Day MVA Window"). We will not make a Market Value
Adjustment if you make a transfer or withdrawal during the 30-Day MVA Window.
We apply a Market Value Adjustment to reflect changes in interest rates from
the time you first allocate money to a Market Value Adjusted Fixed Guarantee
Period Account to the time the money is taken out of that Market Value Adjusted
Fixed Guarantee Period Account under the circumstances described above. We use
the U.S. Treasury Note Constant Maturity Yield as reported in Federal Reserve
Statistical Release H.15 ("Treasury Rate") to calculate the Market Value
Adjustment. We do so by comparing the Treasury Rate for a maturity equal to the
Market Value Adjusted Fixed Guarantee Period at the time the Market Value
Adjusted Fixed Guarantee Period Account is established with the Treasury Rate
for the same maturity at the time the money is taken from the Market Value
Adjusted Fixed Guarantee Period Account.
The Market Value Adjustment may be positive or negative, depending on changes
in interest rates. As such, you bear the investment risk associated with
changes in interest rates. If interest rates have increased since the
establishment of a Market Value Adjusted Fixed Guarantee Period Account, the
Market Value Adjustment, together with any applicable withdrawal charges,
premium taxes, and income tax withholdings could reduce the amount you receive
upon full withdrawal from a Market Value Adjusted Fixed Guarantee Period
Account to an amount less than the purchase payment used to establish that
Market Value Adjusted Fixed Guarantee Period Account.
Generally, if at the time you establish a Market Value Adjusted Fixed Guarantee
Period Account, the Treasury Rate for a maturity equal to that Market Value
Adjusted Fixed Guarantee Period is higher than the applicable Treasury Rate at
the time money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be positive. Conversely, if at
the time you establish a Market Value Adjusted Fixed Guarantee Period Account,
the applicable Treasury Rate is lower than the applicable Treasury Rate at the
time the money is to be taken from the Market Value Adjusted Fixed Guarantee
Period Account, the Market Value Adjustment will be negative.
For example, assume that you purchase a Contract and allocate part of the
initial purchase payment (and Credit Enhancements for Consultant Solutions Plus
Contracts) to the Market Value Adjusted Fixed Account Option to establish a
5-year Market Value Adjusted Fixed Guarantee Period Account. Assume that the
5-year Treasury Rate at that time is 4.50%. Next, assume that at the end of the
3rd year, you withdraw money from the Market Value Adjusted Fixed Guarantee
Period Account. If, at that time, the 5-year Treasury Rate is 4.20%, then the
Market Value Adjustment will be positive. Conversely, if the 5-year Treasury
Rate at that time is 4.80%, then the Market Value Adjustment will be negative.
The formula used to calculate the Market Value Adjustment and numerical
examples illustrating its application are shown in Appendix B of this
prospectus.
At the end of a Market Value Adjusted Fixed Guarantee Period, the Market Value
Adjusted Fixed Guarantee Period Account expires and we will automatically
transfer the money from such Guarantee Period Account to establish a new Market
Value Adjusted Fixed Guarantee Period Account with the same Market Value
Adjusted Fixed Guarantee Period, unless you notify us otherwise. The new Market
Value Adjusted Fixed Guarantee Period Account will be established as of the day
immediately following the expiration date of the expiring Market Value Adjusted
Guarantee Period Account ("New Account Start Date.") If the Market Value
Adjusted Fixed Guarantee Period is no longer being offered, we will establish a
new Market Value Adjusted Fixed Guarantee Period Account with the next shortest
Market Value Adjusted Fixed Guarantee Period available. Prior to the expiration
date, we will send you a notice, which will outline the options available to
you. During the 30-Day MVA Window a Market Value Adjustment will not be applied
to transfers and withdrawals from the expiring Market Value Adjusted Fixed
Guarantee Period Account and you may elect to:
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to
40 PROSPECTUS
establish a new Guarantee Period Account within the Market Value Adjusted
Fixed Account Option; or
.. transfer all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account to other investment alternatives available at the
time; or
.. withdraw all or part of the money from the Market Value Adjusted Fixed
Guarantee Period Account. Withdrawal charges and taxes may apply.
The money in the Market Value Adjusted Fixed Guarantee Period Account will earn
interest at the interest rate declared for the new Market Value Adjusted Fixed
Guarantee Period Account from the New Account Start Date until the date we
receive notification of your election. If we receive notification of your
election to make a transfer or withdrawal from an expiring Market Value
Adjusted Fixed Guarantee Period Account on or before the New Account Start
Date, the transfer or withdrawal will be deemed to have occurred on the New
Account Start Date. If we receive notification of your election to make a
transfer or withdrawal from the expiring Market Value Adjusted Fixed Guarantee
Period Account after the New Account Start Date, but before the expiration of
the 30-Day MVA Window, the transfer or withdrawal will be deemed to have
occurred on the day we receive such notice. Any remaining balance not withdrawn
or transferred will earn interest for the term of the new Market Value Adjusted
Fixed Guarantee Period Account, at the interest rate declared for such Account.
If we do not receive notification from you within the 30-Day Window, we will
assume that you have elected to transfer the amount in the expiring Market
Value Adjusted Fixed Guarantee Period Account to establish a new Market Value
Adjusted Fixed Guarantee Period Account with the same Market Value Adjusted
Fixed Guarantee Period, and the amount in the new Market Value Adjusted Fixed
Guarantee Period Account will continue to earn interest at the interest rate
declared for the new Market Value Adjusted Fixed Guarantee Period Account, and
will be subject to all restrictions of the Market Value Adjusted Fixed Account
Option. If we no longer offer that Market Value Adjusted Fixed Guarantee
Period, the Market Value Adjusted Fixed Guarantee Period for the new Market
Value Adjusted Fixed Guarantee Period Account will be the next shortest term
length we offer for the Market Value Adjusted Fixed Account Option at that
time, and the interest rate will be the rate declared by us at that time for
such term.
Investment Alternatives: Transfers
- --------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may not transfer Contract Value to the DCA Fixed
Account Option or add to an existing Transfer Period Account. You may request
transfers in writing on a form that we provided or by telephone according to
the procedure described below.
You may make up to 12 transfers per Contract Year without charge. Currently, a
transfer fee equal to 1.00% of the amount transferred applies to each transfer
after the 12th transfer in any Contract Year. This fee may be changed, but in
no event will it exceed 2.00% of the amount transferred. Multiple transfers on
a single Valuation Date are considered a single transfer for purposes of
assessing the transfer fee. If you added the TrueReturn Accumulation Benefit
Option or SureIncome Option to your Contract, certain restrictions on transfers
apply. See the "TrueReturn Accumulation Benefit Option" and "SureIncome
Withdrawal Benefit Option" sections of this prospectus for more information. In
any event, the transfer fee will never be greater than $25.
The minimum amount that you may transfer from the Standard Fixed Account
Option, Market Value Adjusted Fixed Account Option or a Variable Sub-account is
$100 or the total remaining balance in the Standard Fixed Account Option,
Market Value Adjusted Fixed Account Option or the Variable Sub-account, if
less. These limitations do not apply to the DCA Fixed Account Option. The total
amount that you may transfer or withdraw from a Standard Fixed Guarantee Period
Account in a Contract Year is 30% of the amount used to establish that
Guarantee Period Account. See "Standard Fixed Account Option". The minimum
amount that can be transferred to the Standard Fixed Account Option and the
Market Value Adjusted Fixed Account Option is $100.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us
to defer transfers from the Fixed Account Options for up to 6 months from the
date we receive your request. If we decide to postpone transfers from any Fixed
Account Option for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date we receive the
transfer request to the date we make the transfer.
For Consultant Solutions Select Contracts, the maximum amount that may be
allocated during any single day to certain selected funds by telephone, fax,
Internet, overnight or express mail services, same day messenger, or in person
is $25,000. All trades exceeding
41 PROSPECTUS
this daily limit must be made by first class US Mail. The funds currently
affected by this restriction are:
Fidelity VIP Overseas - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Oppenheimer Global Securities/VA - Service Shares Sub-Account
Van Eck Worldwide Emerging Markets Sub-Account
MFS High Income - Service Class Sub-Account
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may make up to 12 transfers
per Contract Year within each Income Plan. You may not convert any portion of
your fixed income payments into variable income payments. You may not make
transfers among Income Plans. You may make transfers from the variable income
payments to the fixed income payments to increase the proportion of your income
payments consisting of fixed income payments, unless you have selected the
Income Protection Benefit Option.
TELEPHONE OR ELECTRONIC TRANSFERS
You may make transfers by telephone by calling 800-457-7617. The cut-off time
for telephone transfer requests is 3:00 p.m. Central Time. In the event that
the New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time,
or in the event that the Exchange closes early for a period of time but then
reopens for trading on the same day, we will process telephone transfer
requests as of the close of the Exchange on that particular day. We will not
accept telephone requests received from you at any telephone number other than
the number that appears in this paragraph or received after the close of
trading on the Exchange. If you own the Contract with a joint Contract Owner,
unless we receive contrary instructions, we will accept instructions from
either you or the other Contract Owner.
We may suspend, modify or terminate the telephone transfer privilege, as well
as any other electronic or automated means we previously approved, at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
MARKET TIMING & EXCESSIVE TRADING
The Contracts are intended for long-term investment. Market timing and
excessive trading can potentially dilute the value of Variable Sub-Accounts and
can disrupt management of a Portfolio and raise its expenses, which can impair
Portfolio performance and adversely affect your Contract Value. Our policy is
not to accept knowingly any money intended for the purpose of market timing or
excessive trading. Accordingly, you should not invest in the Contract if your
purpose is to engage in market timing or excessive trading, and you should
refrain from such practices if you currently own a Contract.
We seek to detect market timing or excessive trading activity by reviewing
trading activities. Portfolios also may report suspected market-timing or
excessive trading activity to us. If, in our judgment, we determine that the
transfers are part of a market timing strategy or are otherwise harmful to the
underlying Portfolio, we will impose the trading limitations as described below
under "Trading Limitations." Because there is no universally accepted
definition of what constitutes market timing or excessive trading, we will use
our reasonable judgment based on all of the circumstances.
While we seek to deter market timing and excessive trading in Variable
Sub-Accounts, because our procedures involve the exercise of reasonable
judgment, we may not identify or prevent some market timing or excessive
trading. Moreover, imposition of trading limitations is triggered by the
detection of market timing or excessive trading activity, and the trading
limitations are not applied prior to detection of such trading activity.
Therefore, our policies and procedures do not prevent such trading activity
before it is detected. As a result, some investors may be able to engage in
market timing and excessive trading, while others are prohibited, and the
Portfolio may experience the adverse effects of market timing and excessive
trading described above.
TRADING LIMITATIONS
We reserve the right to limit transfers among the investment alternatives in
any Contract year, require that all future transfer requests be submitted
through U.S. Postal Service First Class Mail thereby refusing to accept
transfer requests via telephone, facsimile, Internet, or overnight delivery, or
to refuse any transfer request, if:
.. we believe, in our sole discretion, that certain trading practices, such as
excessive trading, by, or on behalf of, one or more Contract Owners, or a
specific transfer request or group of transfer requests, may have a
detrimental effect on the Accumulation Unit Values of any Variable
Sub-Account or on the share prices of the corresponding Portfolio or
otherwise would be to the disadvantage of other Contract Owners; or
.. we are informed by one or more of the Portfolios that they intend to
restrict the purchase, exchange, or redemption of Portfolio shares because
of excessive trading or because they believe that a specific transfer or
group of transfers would have a detrimental effect on the prices of
Portfolio shares.
42 PROSPECTUS
In making the determination that trading activity constitutes market timing or
excessive trading, we will consider, among other things:
.. the total dollar amount being transferred, both in the aggregate and in the
transfer request;
.. the number of transfers you make over a period of time and/or the period of
time between transfers (note: one set of transfers to and from a Variable
Sub-Account in a short period of time can constitute market timing);
.. whether your transfers follow a pattern that appears designed to take
advantage of short term market fluctuations, particularly within certain
Variable Sub-Account underlying Portfolios that we have identified as being
susceptible to market timing activities (e.g., International, High Yield,
and Small Cap Variable Sub-Accounts);
.. whether the manager of the underlying Portfolio has indicated that the
transfers interfere with Portfolio management or otherwise adversely impact
the Portfolio; and
.. the investment objectives and/or size of the Variable Sub-Account
underlying Portfolio.
We seek to apply these trading limitations uniformly. However, because these
determinations involve the exercise of discretion, it is possible that we may
not detect some market timing or excessive trading activity. As a result, it is
possible that some investors may be able to engage in market timing or
excessive trading activity, while others are prohibited, and the Portfolio may
experience the adverse effects of market timing and excessive trading described
above.
If we determine that a Contract Owner has engaged in market timing or excessive
trading activity, we will require that all future transfer requests be
submitted through U.S. Postal Service First Class Mail thereby refusing to
accept transfer requests via telephone, facsimile, Internet, or overnight
delivery. If we determine that a Contract Owner continues to engage in a
pattern of market timing or excessive trading activity we will restrict that
Contract Owner from making future additions or transfers into the impacted
Variable Sub-Account(s) or will restrict that Contract Owner from making future
additions or transfers into the class of Variable Sub-Account(s) if the
Variable Sub-Accounts(s) involved are vulnerable to arbitrage market timing
trading activity (e.g., International, High Yield, and Small Cap Variable
Sub-Accounts).
In our sole discretion, we may revise our Trading Limitations at any time as
necessary to better deter or minimize market timing and excessive trading or to
comply with regulatory requirements.
SHORT TERM TRADING FEES
The underlying Portfolios are authorized by SEC regulation to adopt and impose
redemption fees if a Portfolio's Board of Directors determines that such fees
are necessary to minimize or eliminate short-term transfer activity that can
reduce or dilute the value of outstanding shares issued by the Portfolio. The
Portfolio will set the parameters relating to the redemption fee and such
parameters may vary by Portfolio. If a Portfolio elects to adopt and charge
redemption fees, these fees will be passed on to the Contract Owner(s)
responsible for the short-term transfer activity generating the fee.
We will administer and collect redemption fees in connection with transfers
between the Variable Sub-Accounts and forward these fees to the Portfolio.
Please consult the Portfolio's prospectus for more complete information
regarding the fees and charges associated with each Portfolio.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a
fixed dollar amount on a regular basis from any Variable Sub-Account or any
Fixed Account Option to any of the other Variable Sub-Accounts. You may not use
the Dollar Cost Averaging Program to transfer amounts to the Fixed Account
Options. This program is available only during the Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar
amounts are made at fluctuating prices, the aggregate average cost per unit
will be less than the average of the unit prices on the same purchase dates.
However, participation in this Program does not assure you of a greater profit
from your purchases under the Program nor will it prevent or necessarily reduce
losses in a declining market. Call or write us for instructions on how to
enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio
Rebalancing Program, we will automatically rebalance the Contract Value in each
Variable Sub-Account and return it to the desired percentage allocations. Money
you allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in
writing or by telephone. The new allocation will be effective with the first
rebalancing that occurs after we receive your written or
43 PROSPECTUS
telephone request. We are not responsible for rebalancing that occurs prior to
receipt of proper notice of your request.
Example:
Assume that you want your initial purchase payment split among 2 Variable
Sub-accounts. You want 40% to be in the PIMCO VIT Foreign Bond (U.S.
Dollar-Hedged) - Administrative Shares Sub-Account Variable Sub-account and
60% to be in the Fidelity VIP Index 500 - Service Class 2 Sub-Account
Variable Sub-account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first quarter, the
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares
Sub-Account Variable Sub-account now represents 50% of your holdings because
of its increase in value. If you choose to have your holdings in a Contract
or Contracts rebalanced quarterly, on the first day of the next quarter we
would sell some of your units in the PIMCO VIT Foreign Bond (U.S.
Dollar-Hedged) - Administrative Shares Sub-Account Variable Sub-account for
the appropriate Contract(s) and use the money to buy more units in the
Fidelity VIP Index 500 - Service Class 2 Sub-Account Variable Sub-account so
that the percentage allocations would again be 40% and 60% respectively.
The transfers made under the program do not count towards the 12 transfers you
can make without paying a transfer fee, and are not subject to a transfer fee.
Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the Variable Sub-Accounts that performed better
during the previous time period.
Expenses
- --------------------------------------------------------------------------------
As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$40 contract maintenance charge from your assets invested in the PIMCO Money
Market Variable Sub-account ($30 if the Contract value is equal to or greater
than $2,000.) If there are insufficient assets in that Variable Sub-account, we
will deduct the balance of the charge proportionally from the other Variable
Sub-accounts. We also will deduct this charge if you withdraw your entire
Contract Value, unless your Contract qualifies for a waiver. During the Payout
Phase, we will deduct the charge proportionately from each income payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing
and collecting purchase payments; keeping records; processing death claims,
cash withdrawals, and policy changes; proxy statements; calculating
Accumulation Unit Values and income payments; and issuing reports to Contract
Owners and regulatory agencies. We cannot increase the charge. We will waive
this charge for a Contract Anniversary if, on that date:
.. your Contract Value is equal to or greater than $50,000; or
.. your entire Contract Value is allocated to the Fixed Account Options or,
after the Payout Start Date, if all income payments are fixed income
payments.
We also reserve the right to waive this charge if you own more than one
Contract and the Contracts meet certain minimum dollar amount requirements. In
addition, we reserve the right to waive this charge for all Contracts.
ADMINISTRATIVE EXPENSE CHARGE
We currently deduct an administrative expense charge daily at an annual rate of
0.10% of the average daily net assets you have invested in the Variable
Sub-accounts. We intend this charge to cover actual administrative expenses
that exceed the revenues from the contract maintenance charge. There is no
necessary relationship between the amount of administrative charge imposed on a
given Contract and the amount of expenses that may be attributed to that
Contract. We assess this charge each day during the Accumulation Phase and the
Payout Phase. We may increase this charge for Contracts issued in the future,
but in no event will it exceed 0.25%. We guarantee that after your Contract is
issued we will not increase this charge for your Contract.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily from the net assets you
have invested in the Variable Sub-Accounts. We assess mortality and expense
risk charges during the Accumulation and Payout Phases of the Contract, except
as noted below. The annual mortality and expense risk charge for the Contracts
without any optional benefit are as follows:
Consultant Solutions Classic 1.25%
-----------------------------------
Consultant Solutions Plus 1.45%
-----------------------------------
Consultant Solutions Elite 1.60%
-----------------------------------
Consultant Solutions Select 1.70%
-----------------------------------
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the
risk (expense risk) that the current charges will not be sufficient in the
future to cover the cost of
44 PROSPECTUS
administering the Contract. The mortality and expense risk charge also helps
pay for the cost of the Credit Enhancement under the Consultant Solutions Plus
Contract. If the charges under the Contract are not sufficient, then we will
bear the loss. We charge an additional amount for the optional benefits to
compensate us for the additional risk that we accept by providing these options.
You will pay additional mortality and expense risk charges if you add any
optional benefits to your Contract. The additional mortality and expense risk
charge you pay will depend upon which of the options you select:
.. MAV Death Benefit Option: The current mortality and expense risk charge for
this option is 0.20%. This charge may be increased, but will never exceed
0.50%. We guarantee that we will not increase the mortality and expense
risk charge for this option after you have added it to your Contract. We
deduct the charge for this option only during the Accumulation Phase.
.. Annual Increase Death Benefit Option: The current mortality and expense
risk charge for this option is 0.30%. This charge may be increased, but
will never exceed 0.50%. We guarantee that we will not increase the
mortality and expense risk charge for this option after you have added it
to your Contract. We deduct the charge for this option only during the
Accumulation Phase.
.. Enhanced Earnings Death Benefit Option: The current mortality and expense
risk charge for this option is:
. 0.25% (maximum of 0.35%) if the oldest Contract Owner and Co-Annuitant,
or, if the Contract is owned by a non-living person, the oldest
Annuitant, are age 70 or younger on the Rider Application Date;
. 0.40% (maximum of 0.50%) if the oldest Contract Owner or, if older, the
Co-Annuitant, or, if the Contract is owned by a non-living person, the
oldest Annuitant, is age 71 or older and age 79 or younger on the Rider
Application Date.
. The charges may be increased but they will never exceed the maximum
charges shown above. We guarantee that we will not increase the
mortality and expense risk charge for this option after you have added
it to your Contract. However, if your spouse elects to continue the
Contract in the event of your death and if he or she elects to continue
the Enhanced Earnings Death Benefit Option, the charge will be based on
the age of the new Contract Owner at the time the Contract is continued.
Refer to the Death Benefit Payments provision in this prospectus for
more information. We deduct the charge for this option only during the
Accumulation Phase.
.. Income Protection Benefit Option: The current mortality and expense risk
charge for this option is 0.50%. This charge may be increased, but will
never exceed 0.75%. We guarantee that we will not increase the mortality
and expense risk for this option after you have added it to your Contract.
This option may be added to your Contract on the Payout Start Date. The
charge will be deducted only during the Payout Phase.
TRUERETURN ACCUMULATION BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the TrueReturn Accumulation Benefit
Option. The current annual Rider Fee is 0.50% of the Benefit Base. We deduct
the Rider Fee on each Contract Anniversary during the Rider Period or until you
terminate the Option, if earlier. We reserve the right to increase the Rider
Fee to up to 1.25%. We currently charge the same Rider Fee regardless of the
Rider Period and Guarantee Option you select, however we reserve the right to
charge different fees for different Rider Periods and Guarantee Options in the
future. However, once we issue your Option, we cannot change the Rider Fee that
applies to your Contract. If you elect to exercise the Rider Trade-In Option,
the new Rider Fee will be based on the Rider Fee percentage applicable to a new
TrueReturn Accumulation Benefit Option at the time of trade-in.
The Rider Fee is deducted only from the Variable Sub-account(s) on a pro rata
basis in the proportion that your value in each Variable Sub-account bears to
your total value in all Variable Sub-accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-account. If you terminate the
Option, or terminate the Contract by a total withdrawal, prior to the Rider
Maturity Date on a date other than the Contract Anniversary, we will deduct a
Rider Fee that is prorated based on the number of full months between the
Contract Anniversary immediately prior to the termination and the date of the
termination. However, if the Option is terminated due to death of the Contract
Owner or Annuitant, we will not charge a Rider Fee unless the date we receive a
Complete Request for Settlement of the Death Proceeds is also a Contract
Anniversary. If the Option is terminated on the Payout Start Date, we will not
charge a Rider Fee unless the Payout Start Date is also a Contract Anniversary.
Additionally, if you elect to exercise the Rider Trade-In Option and cancel the
Option on a date other than a Contract Anniversary, we will not deduct a Rider
Fee on the date the Option is terminated. Refer to the "TrueReturn Accumulation
Benefit Option" section of this prospectus for more information.
45 PROSPECTUS
SPOUSAL PROTECTION BENEFIT (CO-ANNUITANT) OPTION FEE
We charge a separate annual Rider Fee for the Spousal Protection Benefit
(Co-Annuitant) Option. The current annual Rider Fee is 0.10% of the Contract
Value. This fee applies to Options added on or after May 1, 2005. For Options
added prior to May 1, 2005, there is no charge associated with the Options. We
deduct the Rider Fee on each Contract Anniversary and in certain circumstances
on the date you terminate the Option. We reserve the right to increase the
annual Rider Fee on newly issued Options to up to 0.15% of the Contract Value.
We also reserve the right to charge different Rider Fees for new Spousal
Protection Benefit (Co-Annuitant) Options we offer in the future. However, once
we issue your Option, we cannot change the Rider Fee that applies to your
Contract.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your value in each Variable Sub-Account bears to
your total value in all Variable Sub-Accounts. Rider Fees will decrease the
number of Accumulation Units in each Variable Sub-Account. If, at the time the
Rider Fee is deducted, the Rider Fee exceeds the total value in all Variable
Sub-Accounts, the excess of the Rider Fee over the total value in all Variable
Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary
following the Rider Date. A Rider Fee will be deducted on each subsequent
Contract Anniversary while the Rider is in force.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of full months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.10%, with the result multiplied
by the Contract Value as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to 0.10% multiplied by the
Contract Value as of that Contract Anniversary.
If the Rider is terminated for any reason on a Contract Anniversary, we will
deduct a full Rider Fee. If the Option is terminated on a date other than a
Contract Anniversary, we will deduct a pro rata Rider Fee, except we will not
charge any Rider Fee if the Option is terminated on the Payout Start Date or
due to the death of the Contract Owner or Annuitant. If we charge a Rider Fee
on the termination of the Option, the Rider Fee will be reduced pro rata, so
that you are only charged for the number of full months this Option was in
effect.
SUREINCOME WITHDRAWAL BENEFIT OPTION FEE
We charge a separate annual Rider Fee for the SureIncome Option ("SureIncome
Option Fee" or "Rider Fee"). The current annual Rider Fee is 0.50% of the
Benefit Base. We deduct the Rider Fee on each Contract Anniversary up to and
including the date you terminate the Option. We reserve the right to increase
the Rider Fee to up to 1.25% of the Benefit Base. We also reserve the right to
charge different Rider Fees for different Withdrawal Benefit Factors we may
offer in the future. However, once we issue your SureIncome Option, we cannot
change the Rider Fee that applies to your Option. If you elect to exercise the
Rider Trade-In Option, the new Rider Fee will be based on the Rider Fee
percentage applicable to a new SureIncome Option at the time of trade-in.
The Rider Fee is deducted only from the Variable Sub-Account(s) on a pro-rata
basis in the proportion that your Contract Value in each Variable Sub-Account
bears to your total Contract Value in all Variable Sub-Accounts. Rider Fees
will decrease the number of Accumulation Units in each Variable Sub-Account.
If, at the time the Rider Fee is deducted, the Rider Fee exceeds the total
Contract Value in all Variable Sub-Accounts, the excess of the Rider Fee over
the total Contract Value in all Variable Sub-Accounts will be waived.
The first Rider Fee will be deducted on the first Contract Anniversary
following the Rider Date. A Rider Fee will be deducted on each subsequent
Contract Anniversary the SureIncome Option is in force.
For the first Contract Anniversary following the Rider Date, the Rider Fee is
equal to the number of full months from the Rider Date to the first Contract
Anniversary, divided by twelve, multiplied by 0.50%, with the result multiplied
by the Benefit Base as of the first Contract Anniversary. For subsequent
Contract Anniversaries, the Rider Fee is equal to the 0.50% multiplied by the
Benefit Base as of that Contract Anniversary.
If the SureIncome Option is terminated for any reason on a Contract
Anniversary, we will deduct a full Rider Fee. If the SureIncome Option is
terminated on a date other than a Contract Anniversary, we will deduct a pro
rata Rider Fee, except we will not charge any Rider Fee if the SureIncome
Option is terminated on the Payout Start Date or due to the death of the
Contract Owner or Annuitant. If we charge a Rider Fee on the termination of the
SureIncome Option, the Rider Fee will be reduced pro rata, so that you are only
charged for the number of full months the SureIncome Option was in effect.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The
current fee is equal to 1.00% of the dollar amount transferred. This fee may be
increased, but in no event will it exceed 2.00% of the dollar amount
transferred. In any event, the transfer fee will never be greater than $25. We
will not charge a transfer fee on transfers that are part of a Dollar Cost
Averaging Program or Automatic Portfolio Rebalancing Program.
WITHDRAWAL CHARGE
For all of the contracts except the Consultant Solutions Select, we may assess
a withdrawal charge from the
46 PROSPECTUS
purchase payment(s) you withdraw. The amount of the charge will depend on the
number of years that have elapsed since we received the purchase payment being
withdrawn. A schedule showing the withdrawal charges applicable to each
Contract appears on page 11. If you make a withdrawal before the Payout Start
Date, we will apply the withdrawal charge percentage in effect on the date of
the withdrawal, or the withdrawal charge percentage in effect on the following
day, whichever is lower.
Withdrawals also may be subject to tax penalties or income tax. You should
consult with your tax counsel or other tax advisor regarding any withdrawals.
Withdrawals from the Market Value Adjusted Fixed Account Option may be subject
to a market value adjustment. Refer to page 39 for more information on market
value adjustments.
FREE WITHDRAWAL AMOUNT
You can withdraw up to the Free Withdrawal Amount each Contract Year without
paying the withdrawal charge. The Free Withdrawal Amount for a Contract Year is
equal to 15% of all purchase payments (excluding Credit Enhancements for
Consultant Solutions Plus Contracts) that are subject to a withdrawal charge as
of the beginning of that Contract Year, plus 15% of the purchase payments added
to the Contract during the Contract Year. The withdrawal charge applicable to
Contracts owned by Charitable Remainder Trusts is described below.
Purchase payments no longer subject to a withdrawal charge will not be used to
determine the Free Withdrawal Amount for a Contract Year, nor will they be
assessed a withdrawal charge, if withdrawn. The Free Withdrawal Amount is not
available in the Payout Phase.
You may withdraw up to the Free Withdrawal Amount in each Contract Year it is
available without paying a withdrawal charge; however, the amount withdrawn may
be subject to a Market Value Adjustment or applicable taxes. If you do not
withdraw the entire Free Withdrawal Amount in a Contract Year, any remaining
portion may not be carried forward to increase the Free Withdrawal Amount in a
later Contract Year.
For purposes of assessing the withdrawal charge, we will treat withdrawals as
coming from the oldest purchase payments first as follows:
1) Purchase payments that no longer are subject to withdrawal charges;
2) Free Withdrawal Amount (if available);
3) Remaining purchase payments subject to withdrawal charges, beginning with
the oldest purchase payment;
4) Any earnings not previously withdrawn.
However, for federal income tax purposes, earnings are considered to come out
first, which means that you will pay taxes on the earnings portion of your
withdrawal.
If the Contract Owner is a Charitable Remainder Trust, the Free Withdrawal
Amount in a Contract Year is equal to the greater of:
.. The Free Withdrawal Amount described above; or
.. Earnings as of the beginning of the Contract Year that have not been
previously withdrawn.
For purposes of assessing the withdrawal charge for a Charitable Remainder
Trust-Owned Contract, we will treat withdrawals as coming from the earnings
first and then the oldest purchase payments as follows:
1) Earnings not previously withdrawn;
2) Purchase payments that are no longer subject to withdrawal charges;
3) Free Withdrawal Amount in excess of earnings;
4) Purchase payments subject to withdrawal charges, beginning with the oldest
purchase payment.
If you have selected the Consultant Solutions Select Contract, there are no
withdrawal charges applicable and, therefore, no Free Withdrawal Amount.
Amounts withdrawn may be subject to a Market Value Adjustment or applicable
taxes.
All Contracts
We do not apply a withdrawal charge in the following situations:
.. the death of the Contract Owner or Annuitant (unless the Settlement Value
is used);
.. withdrawals taken to satisfy IRS minimum distribution rules for the
Contract; or
.. withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts, and to help defray the cost of the Credit Enhancement for the
Consultant Solutions Plus Contracts. To the extent that the withdrawal charge
does not cover all sales commissions and other promotional or distribution
expenses, or the cost of the Credit Enhancement, we may use any of our
corporate assets, including potential profit which may arise from the mortality
and expense risk charge or any other charges or fee described above, to make up
any difference.
Withdrawals taken prior to annuitization (referred to in this prospectus as the
Payout Phase) are generally considered to come from the earnings in the
Contract first. If the Contract is tax-qualified, generally all withdrawals are
treated as distributions of earnings.
47 PROSPECTUS
Withdrawals of earnings are taxed as ordinary income and, if taken prior to age
59 1/2, may be subject to an additional 10% federal tax penalty. You should
consult your own tax counsel or other tax advisers regarding any withdrawals.
Confinement Waiver. We will waive the withdrawal charge on all withdrawals
taken under your Contract if the following conditions are satisfied:
1. you, or, if the Contract Owner is not a living person, the Annuitant, are
first confined to a long term care facility or a hospital for at least 90
consecutive days. You or the Annuitant must first enter the long term care
facility or hospital at least 30 days after the Issue Date,
2. we receive your request for withdrawal and written proof of the stay no
later than 90 days following the end of your or the Annuitant's stay at the
long term care facility or hospital, and
3. Due proof of confinement is received by us prior to or at the time of, a
request for a withdrawal.
"Due Proof" includes, but is not limited to, a letter signed by a physician
stating the dates the Owner or Annuitant was confined, the name and location of
the Long Term Care Facility or Hospital, a statement that the confinement was
medically necessary, and, if released, the date the Owner or Annuitant was
released from the Long Term Care Facility or Hospital.
Terminal Illness Waiver. We will waive the withdrawal charge on all
withdrawals under your Contract if:
1. you or the Annuitant, if the Contract Owner is not a living person, are
diagnosed by a physician as having a terminal illness (as defined in the
Contract) at least 30 days after the Issue Date, and
2. you provide Due Proof of diagnosis to us before or at the time you request
the withdrawal.
"Due Proof" includes, but is not limited to, a letter signed by a physician
stating that the Owner or Annuitant has a Terminal Illness and the date the
Terminal Illness was first diagnosed.
Unemployment Waiver. We will waive the withdrawal charge on one partial or a
full withdrawal taken under your Contract, if you meet the following
requirements:
1. you or the Annuitant, if the Contract Owner is not a living person, become
unemployed at least one year after the Issue Date,
2. you or the Annuitant receive unemployment compensation (as defined in the
Contract) for at least 30 days as a result of that unemployment, and
3. you or the Annuitant claim this benefit within 180 days of your or the
Annuitant's initial receipt of unemployment compensation, and
we receive due proof that you are or have been unemployed and that unemployment
compensation has been received for at least thirty consecutive days prior to or
at the time of the request for withdrawal.
"Unemployment Compensation" means unemployment compensation received from a
unit of state or federal government in the U.S. "Due Proof" includes, but is
not limited to, a legible photocopy of an unemployment compensation payment
that meets the above described criteria with regard to dates and a signed
letter from you stating that you or the Annuitant meet the above described
criteria.
You may exercise this benefit once over the term of the Contract. Amounts
withdrawn may be subject to Market Value Adjustments.
These waivers do not apply under the Consultant Solutions Select.
Please refer to your Contract for more detailed information about the terms and
conditions of these waivers.
The laws of your state may limit the availability of these waivers and may also
change certain terms and/or benefits available under the waivers. You should
consult your Contract for further details on these variations. Also, even if
you do not pay a withdrawal charge because of these waivers, a Market Value
Adjustment may apply and you still may be required to pay taxes or tax
penalties on the amount withdrawn. You should consult your tax advisor to
determine the effect of a withdrawal on your taxes.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. We are responsible for paying these taxes and
will deduct them from your Contract Value. Some of these taxes are due when the
Contract is issued, others are due when income payments begin or upon
surrender. Our current practice is not to charge anyone for these taxes until
income payments begin or when a total withdrawal occurs including payment upon
death. We may some time in the future discontinue this practice and deduct
premium taxes from the purchase payments. Premium taxes generally range from 0%
to 4%, depending on the state.
At the Payout Start Date, we deduct the charge for premium taxes from each
investment alternative in the proportion that the Contract Value in the
investment alternative bears to the total Contract Value.
DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES
We are not currently maintaining a provision for taxes. In the future, however,
we may establish a provision for taxes if we determine, in our sole discretion,
that we will incur a tax as a result of the operation of the Variable Account.
We will deduct for any taxes we incur as a
48 PROSPECTUS
result of the operation of the Variable Account, whether or not we previously
made a provision for taxes and whether or not it was sufficient. Our status
under the Internal Revenue Code is briefly described in the "Taxes" section of
this prospectus.
OTHER EXPENSES
Each Portfolio deducts management fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are
held by the Variable Sub-accounts. These fees and expenses are described in the
prospectuses for the Portfolios. For a summary of Portfolio annual expenses,
see page 11. We may receive compensation from the investment advisers,
administrators or distributors, or their affiliates, of the Portfolios in
connection with the administrative services we provide to the Portfolios.
Access to Your Money
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WITHDRAWALS
You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances
on or after the Payout Start Date. See "Income Plans" on page 50.
The amount payable upon withdrawal is the Contract Value (or portion thereof)
next computed after we receive the request for a withdrawal at our home office,
adjusted by any applicable Market Value Adjustment, less any applicable
withdrawal charges, income tax withholding, penalty tax, contract maintenance
charge, Rider Fee, and any premium taxes. We will pay withdrawals from the
Variable Account within 7 days of receipt of the request, subject to
postponement in certain circumstances. You can withdraw money from the Variable
Account or the Fixed Account Option(s) available under your Contract. To
complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
charges, fees and taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time.
Withdrawals from the Standard Fixed Account Option may be subject to a
restriction. See "Standard Fixed Account Options" on page 38.
Withdrawals taken prior to the Payout Start Date are generally considered to
come from the earnings in the Contract first. If the Contract is tax-qualified,
generally all withdrawals are treated as distributions of earnings. Withdrawals
of earnings are taxed as ordinary income and, if taken prior to age 59 1/2, may
be subject to an additional 10% federal penalty tax. If any withdrawal reduces
your Contract Value to less than $1,000, we will treat the request as a
withdrawal of the entire Contract Value, unless the SureIncome Withdrawal
Benefit Option is currently attached to your Contract. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value, subject to certain
exceptions if the SureIncomeWithdrawal Benefit Option is currently attached to
your Contract. See "SureIncome Withdrawal Benefit Option" for more details. We
will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and taxes.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2. An emergency exists as defined by the SEC, or
3. The SEC permits delay for your protection.
We may delay payments or transfers from the Fixed Account Option(s) available
under your Contract for up to 6 months or shorter period if required by law. If
we delay payment or transfer for 30 days or more, we will pay interest as
required by law.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. Please consult your sales representative or call us at 800-457-7617 for
more information.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. At
our discretion, we may modify or suspend the Systematic Withdrawal Program and
charge a processing fee for the service. If we modify or suspend the Systematic
Withdrawal Program, existing systematic withdrawal payments will not be
affected.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $1,000, we may treat it as a request to withdraw your entire Contract
Value, unless the SureIncome Withdrawal Benefit Option is currently attached to
your Contract. Your Contract will terminate if you withdraw all of your
Contract Value.
49 PROSPECTUS
We will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges and applicable taxes.
Income Payments
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PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value, adjusted by
any applicable Market Value Adjustment and less applicable taxes, to an Income
Plan. The first income payment may occur no sooner than 30 days after the Issue
Date. The Payout Start Date must occur on or before the later of:
.. the youngest Annuitant's 99th birthday, or
.. the 10th Contract Anniversary.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
An "Income Plan" is a series of payments made on a scheduled basis to you or to
another person designated by you. You may select more than one Income Plan. If
you choose more than one Income Plan, you must specify what proportions of your
Contract Value, adjusted by any Market Value Adjustment and less any applicable
taxes, should be allocated to each such Income Plan. For tax reporting
purposes, your cost basis and any gain on the Contract will be allocated
proportionally to each Income Plan you select based on the proportion of your
Contract Value applied to each such Income Plan. We reserve the right to limit
the number of Income Plans that you may select. If you choose to add the Income
Protection Benefit Option, certain restrictions may apply as described under
"Income Protection Benefit Option," below.
If you do not select an Income Plan, we will make income payments in accordance
with Income Plan 1 with a Guaranteed Payment Period of 10 years. On the Payout
Start Date, the portion of the Contract Value in any Fixed Account Option,
adjusted by any applicable Market Value Adjustment and less any applicable
taxes, will be used to derive fixed income payments; the portion of the
Contract Value in any Variable Sub-account, less any applicable taxes, will be
used to derive variable income payments.
If any Contract Owner dies during the Payout Phase, the new Contract Owner will
be the surviving Contract Owner. If there is no surviving Contract Owner, the
new Contract Owner will be the Beneficiary(ies) as described in the
"Beneficiary" section of this prospectus. Any remaining income payments will be
paid to the new Contract Owner as scheduled. Income payments to Beneficiaries
may be subject to restrictions established by the Contract Owner. After the
Payout Start Date, you may not make withdrawals (except as described below) or
change your choice of Income Plan.
Currently seven Income Plans are available. Depending on the Income Plan(s) you
choose, you may receive:
.. fixed income payments;
.. variable income payments; or
.. a combination of the two.
Partial annuitizations are not allowed. Your total Contract Value, adjusted by
any applicable Market Value Adjustment, and less any applicable taxes, must be
applied to your Income Plan(s) on the Payout Start Date.
A portion of each payment will be considered taxable and the remaining portion
will be a non-taxable return of your investment in the Contract, which is also
called the "basis". Once the basis in the Contract is depleted, all remaining
payments will be fully taxable. If the Contract is tax-qualified, generally,
all payments will be fully taxable. Taxable payments taken prior to age 59 1/2
may be subject to an additional 10% federal tax penalty.
The seven Income Plans are:
Income Plan 1 - Life Income with Guaranteed Number of Payments. Under this
plan, we make periodic income payments for at least as long as the Annuitant
lives. If the Annuitant dies in the Payout Phase, we will continue to pay
income payments until the guaranteed number of payments has been paid. The
number of months guaranteed ("Guaranteed Payment Period") may be 0 months, or
range from 60 to 360 months. If the Annuitant is age 90 or older as of the
Payout Start Date, the Guaranteed Payment Period may range from 60 to 360
months.
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Number of
Payments. Under this plan, we make periodic income payments for at least as
long as either the Annuitant or the joint Annuitant, named at the time the
Income Plan was selected, lives. If both the Annuitant and joint Annuitant die
in the Payout Phase, we will continue to pay the income payments until the
guaranteed number of payments has been paid. The Guaranteed Payment Period may
be 0 months, or range from 60 to 360 months. If either the Annuitant or joint
Annuitant is age 90 or older as of the Payout Start Date, the Guaranteed
Payment Period may range from 60 to 360 months. You may elect a reduced
survivor plan of 50%, 66% or 75% of the payment amount. If you do not elect a
reduced survivor amount, the payments will remain at 100%. If you elect a
reduced survivor payment
50 PROSPECTUS
plan, the amount of each income payment initially will be higher but a
reduction will take place at the later of 1) the death of an Annuitant; or 2)
at the end of the guaranteed payment period.
Income Plan 3 - Guaranteed Number of Payments. Under this plan, we make
periodic income payments for the period you have chosen. These payments do not
depend on the Annuitant's life. The shortest number of months guaranteed is 60
(120 if the Payout Start Date occurs prior to the third Contract Anniversary).
The longest number of months guaranteed is 360 or the number of months between
the Payout Start Date and the date that the Annuitant reaches age 100, if
greater. In no event may the number of months guaranteed exceed 600. We will
deduct the mortality and expense risk charge from the assets of the Variable
Sub-account supporting this Income Plan even though we may not bear any
mortality risk. You may make withdrawals, change the length of the guaranteed
payment period, or change the frequency of income payments under Income Plan 3.
See "Modifying Payments" and "Payout Withdrawals" below for more details.
Income Plan 4 - Life Income with Cash Refund. Under this plan, we make periodic
income payments until the death of the Annuitant. If the death of the Annuitant
occurs before the total amount applied to an Income Plan is paid out, we will
pay a lump sum payment of the remaining amount. Payments under this plan are
available only as fixed income payments.
Income Plan 5 - Joint Life Income with Cash Refund. Under this plan, we make
periodic income payments until the deaths of both the Annuitant and joint
Annuitant. If the deaths of both the Annuitant and joint Annuitant occur before
the total amount applied to an Income Plan is paid out, we will pay a lump sum
payment of the remaining amount. Currently, a reduced survivor plan is not
available. Payments under this plan are available only as fixed income payments.
Income Plan 6 - Life Income with Installment Refund. Under this plan, we make
periodic income payments until the later of (1) the death of the Annuitant, or
(2) the total amount paid out under the annuity is equal to the total amount
applied to the Income Plan. If the death of the Annuitant occurs before the
total amount applied to an Income Plan is paid out, we will continue to make
payments in the same manner until any remaining payments are paid out. Payments
under this plan are available only as fixed income payments.
Income Plan 7 - Joint Life Income with Installment Refund. Under this plan, we
make periodic income payments until the later of (1) the deaths of both the
Annuitant and joint Annuitant, or (2) the total amount paid out under the
annuity is equal to the total amount applied to the Income Plan. If the deaths
of both the Annuitant and joint Annuitant occur before the total amount applied
to an Income Plan is paid out, we will continue to make payments in the same
manner until any remaining payments are paid out. Currently, a reduced survivor
plan is not available. Payments under this plan are available only as fixed
income payments.
If you choose an Income Plan with payments that continue for the life of the
Annuitant or joint Annuitant, we may require proof of age and sex of the
Annuitant or joint Annuitant before starting income payments, and proof that
the Annuitant or joint Annuitant is alive before we make each payment. Please
note that under Income Plans 1 and 2, if you do not select a Guaranteed Payment
Period, it is possible that the payee could receive only one income payment if
the Annuitant and any joint Annuitant both die before the second income
payment, or only two income payments if they die before the third income
payment, and so on.
The length of any Guaranteed Payment Period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer Guarantee Payment Periods result in lower income payments, all
other things being equal. For example, if you choose an Income Plan with
payments that depend on the life of the Annuitant but with no guaranteed
payments, the income payments generally will be greater than the income
payments made under the same Income Plan with a specified Guaranteed Payment
Period.
Modifying Payments
After the Payout Start Date, you may make the following changes under Income
Plan 3:
.. You may request to modify the length of the Guaranteed Payment Period.
Currently, we allow you to make this change once each Contract Year. We
reserve the right to change this practice at any time without prior notice.
If you elect to change the length of the Guaranteed Payment Period, the new
Guaranteed Payment Period must be within the original minimum and maximum
period you would have been permitted to select on the Payout Start Date.
However, the maximum payment period permitted will be shortened by the
period elapsed since the original Guaranteed Payment Period began. If you
change the length of your Guaranteed Payment Period, we will compute the
present value of your remaining payments, using the same assumptions we
would use if you were terminating the income payments, as described in
Payout Withdrawal. We will then adjust the remaining payments to equal what
that value would support based on those same assumptions and based on the
revised Guaranteed Payment Period.
.. You may request to change the frequency of your payments. We currently
allow you to make this change once each Contract Year. We reserve the right
to change this practice at any time without
51 PROSPECTUS
prior notice. Changes to either the frequency of payments or length of the
Guaranteed Payment Period will result in a change to the payment amount and
may change the amount of each payment that is taxable to you.
Modifying payments of this Contract may not be allowed under Qualified
Contracts. In order to satisfy required minimum distributions ("RMD") under
current Treasury regulations, once income payments have begun over a Guaranteed
Payment Period, the Guaranteed Payment Period cannot be changed even if the new
period is shorter than the maximum permitted. Please consult with a competent
tax advisor prior to making a request to modify payments if your Contract is
subject to RMD requirements.
Any change to either the frequency of payments or length of a Guaranteed
Payment Period will take effect on the next payment date after we accept the
requested change.
Payout Withdrawal
You may terminate all or a portion of the income payments being made under
Income Plan 3 at any time and withdraw their present value ("Withdrawal
Value"), subject to a Payout Withdrawal Charge, by requesting a withdrawal
("Payout Withdrawal") in writing. For variable income payments, the withdrawal
value is equal to the present value of the variable income payments being
terminated, calculated using a discount rate equal to the assumed investment
rate that was used in determining the initial variable payment. For fixed
income payments, the withdrawal value is equal to the present value of the
fixed income payments being terminated, calculated using a discount rate equal
to the applicable current interest rate (this may be the initial interest rate
in some states.) The applicable current interest rate is the rate we are using
on the date we receive your Payout Withdrawal request to determine income
payments for a new annuitization with a payment period equal to the remaining
payment period of the income payments being terminated.
A Payout Withdrawal must be a least $50. If any Payout Withdrawal reduces the
value of the remaining income payments to an amount not sufficient to provide
an initial payment of at least $20, we reserve the right to terminate the
Contract and pay you the present value of the remaining income payments in a
lump sum. If you withdraw the entire value of the remaining income payments,
the Contract will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
Payout Withdrawal. If you withdraw a portion of the value of your remaining
income payments, the payment period will remain unchanged and your remaining
payment amounts will be reduced proportionately.
Payout Withdrawal Charge
To determine the Payout Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When an amount equal to all
purchase payments have been withdrawn, additional withdrawals will not be
assessed a Payout Withdrawal Charge.
Payout Withdrawals will be subject to a Payout Withdrawal Charge for each
Contract as follows:
Number of Complete Years Since We Received the Purchase
Payment Being Withdrawn/Applicable Charge:
Contract: 0 1 2 3 4 5 6 7 8+
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Consultant Solutions Classic 7% 7% 6% 5% 4% 3% 2% 0% 0%
Consultant Solutions Plus 8.5% 8.5% 8.5% 7.5% 6.5% 5.5% 4% 2.5% 0%
Consultant Solutions Elite 7% 6% 5% 0% 0% 0% 0% 0% 0%
Consultant Solutions Select None
Additional Information. We may make other Income Plans available. You may
obtain information about them by writing or calling us. On the Payout Start
Date, you must specify the portion of the Contract Value to be applied to
variable income payments and the portion to be applied to fixed income
payments. For the portion of your Contract Value to be applied to variable
income payments, you must also specify the Variable Sub-Accounts on which to
base the variable income payments as well as the allocation among those
Variable Sub-Accounts. If you do not tell us how to allocate your Contract
Value among fixed and variable income payments, we will apply your Contract
Value in the Variable Account to variable income payments and your Contract
Value in the Fixed Account to fixed income payments.
We will apply your Contract Value, adjusted by any applicable Market Value
Adjustment, less applicable taxes to your Income Plan(s) on the Payout Start
Date. We can make income payments in monthly, quarterly, semi-annual or annual
installments, as you select. If the Contract Value is less than $2,000 or not
enough to provide an initial payment of at least $20, and state law permits, we
may:
.. terminate the Contract and pay you the Contract Value, adjusted by any
applicable Market Value Adjustment and less any applicable taxes, in a lump
sum instead of the periodic payments you have chosen, or
.. reduce the frequency of your payments so that each payment will be at least
$20.
52 PROSPECTUS
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) company mortality experience or (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments, which may
be more or less than your total purchase payments because (a) variable income
payments vary with the investment results of the underlying Portfolios; and
(b) under some of the Income Plans, we make income payments only so long as an
Annuitant is alive or any applicable Guaranteed Payment Period has not yet
expired.
In calculating the amount of the periodic payments in the annuity tables in the
Contracts, we used an assumed investment rate ("AIR", also known as benchmark
rate) of 3%. Currently, you may choose either a 6%, 5%, or 3% AIR per year. If
you select the Income Protection Benefit Option, however, the 3% AIR must
apply. The 6% and 5% AIR may not be available in all states (check with your
representative for availability). Currently, if you do not choose one, the 3%
AIR will automatically apply. We reserve the right to offer other assumed
investment rates. If the actual net investment return of the Variable
Sub-accounts you choose is less than the AIR, then the dollar amount of your
variable income payments will decrease. The dollar amount of your variable
income payments will increase, however, if the actual net investment return
exceeds the AIR. The dollar amount of the variable income payments stays level
if the net investment return equals the AIR. With a higher AIR, your initial
income payment will be larger than with a lower AIR. While income payments
continue to be made, however, this disparity will become smaller and, if the
payments have continued long enough, each payment will be smaller than if you
had initially chosen a lower AIR.
Please refer to the Statement of Additional Information for more detailed
information as to how we determine variable income payments.
You may also elect a variable income payment stream consisting of level
monthly, quarterly or semi-annual payments. If you elect to receive level
monthly, quarterly or semi-annual payments, the payments must be recalculated
annually. You may only elect to receive level payments at or before the Payout
Start Date. If you have elected level payments for an Income Plan(s), you may
not make any variable to fixed payment transfers within such Income Plan(s). We
will determine the amount of each annual payment as described above, place this
amount in our general account, and then distribute it in level monthly,
quarterly or semi-annual payments. The sum of the level payments will exceed
the annual calculated amount because of an interest rate factor we use, which
may vary from year to year, but will not be less than 2% per year. If the
Annuitant dies while you are receiving level payments, you will not be entitled
to receive any remaining level payments for that year (unless the Annuitant
dies before the end of the Guaranteed Payment Period). For example, if you have
selected Income Plan 1 with no Guaranteed Payment Period and the Annuitant dies
during the year, the Beneficiary will not be entitled to receive the remaining
level payments for that year.
INCOME PROTECTION BENEFIT OPTION
We offer an Income Protection Benefit Option, which may be added to your
Contract on the Payout Start Date for an additional mortality and expense risk
charge if you have selected variable income payments subject to the following
conditions:
.. The Annuitant and joint Annuitant, if applicable, must be age 75 or younger
on the Payout Start Date.
.. You must choose Income Plan 1 or 2 and the Guaranteed Payment Period must
be for at least 120 months, unless the Internal Revenue Service requires a
different payment period.
.. You may apply the Income Protection Benefit Option to more than one Income
Plan.
.. The AIR must be 3% for the Income Plan(s) that you wish to apply this
benefit to.
.. You may only add the Income Protection Benefit Option on the Payout Start
Date and, once added, the option cannot be cancelled.
.. You may not add the Income Protection Benefit Option without our prior
approval if your Contract Value is greater than $1,000,000 at the time you
choose to add the Income Protection Benefit Option.
.. You may not convert variable income payments to fixed income payments.
If you select the Income Protection Benefit Option, we guarantee that your
variable income payments under each of the Income Plans to which the option is
applied will never be less that 85% of the initial variable amount income value
("Income Protection Benefit"), as calculated on the Payout Start Date under
such Income Plans, unless you have elected a reduced survivor payment plan
under Income Plan 2. If you have elected a reduced survivor payment plan, we
guarantee that your variable income payments to which the option is applied
will never be less than 85% of the initial variable amount income value prior
to the later of 1) the death of an Annuitant; or 2) the end of the guaranteed
payment period. On or after the later of these events, we guarantee that your
variable income payments will never be less than 85% of the initial variable
amount income value multiplied by the percentage you elected for your reduced
survivor plan. See Appendix C for numerical
53 PROSPECTUS
examples that illustrate how the Income Protection Benefit is calculated.
If you add the Income Protection Benefit Option to your Contract, the mortality
and expense risk charge during the Payout Phase will be increased. Currently,
the charge for this option is 0.50%. We may change the amount we charge, but it
will not exceed 0.75%. Once the option is issued, we will not increase what we
charge you for the benefit.
Investment Requirements.
If you add the Income Protection Benefit Option to your Contract, you must
adhere to certain requirements related to the investment alternatives in which
you may invest during the Payout Phase with respect to the assets supporting
the variable income payments to which the Income Protection Benefit Option
applies. These requirements may include, but are not limited to, maximum
investment limits on certain Variable Sub-accounts, exclusion of certain
Variable Sub-accounts, required minimum allocations to certain Variable
Sub-accounts, and restrictions on transfers to or from certain investment
alternatives. We may also require that you use the Automatic Portfolio
Rebalancing Program. We may change the specific requirements that are
applicable at any time in our sole discretion. Any changes we make will not
apply to the Income Protection Benefit Option if it was added to your Contract
prior to the implementation date of the change, except for changes made due to
a change in Variable Sub-accounts available under the Contract.
When you add the Income Protection Benefit Option to your Contract, you must
allocate to a model portfolio option the entire portion of your Contract Value
allocated to the Variable Sub-accounts.
We currently offer one Model Portfolio Option; however, we may add more Model
Portfolio Options in the future. Transfers made for purposes of adhering to
your Model Portfolio Option will not count towards the number of free transfers
you may make each Contract Year.
The following table summarizes the Model Portfolio Option currently available
for use with the Income Protection Benefit Option:
*Model Portfolio Option 1
Each calendar quarter, we will use the Automatic Portfolio Rebalancing Program
to automatically rebalance your Contract Value in each Variable Sub-account and
return it to the percentage allocations for your Model Portfolio Option, using
the percentage allocations as of your most recent instructions.
Model Portfolio Option 1
You must allocate a certain percentage of the portion of your Contract Value
allocated to the Variable Sub-accounts into each of three asset categories. You
may choose the Variable Sub-accounts in which you want to invest, provided you
maintain the percentage allocation requirements for each category. You may also
make transfers among the Variable Sub-accounts within each category at any
time, provided you maintain the percentage allocation requirements for each
category. However, each transfer you make will count against the 12 transfers
you can make each Contract Year without paying a transfer fee.
The following table describes the percentage allocation requirements for Model
Portfolio Options 1 and Variable Sub-accounts available under each category:
Model Portfolio Option 1
- --------------------------------------------------------------------------------
20% Category A
50% Category B
30% Category C
- --------------------------------------------------------------------------------
CATEGORY A
Fidelity VIP Money Market - Service Class 2 Sub-Account
PIMCO VIT Money Market - Administrative Shares Sub-Account
Model Portfolio Option 1
- --------------------------------------------------------------------------------
CATEGORY B
Fidelity VIP Investment Grade Bond - Service Class 2 Sub-Account
Legg Mason Partners Variable Global High Yield Bond - Class II Sub-Account
MFS High Income - Service Class Sub-Account
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) - Administrative Shares Sub-Account
PIMCO VIT Real Return - Administrative Shares Sub-Account
PIMCO VIT Total Return - Administrative Shares Sub-Account
UIF U.S. Real Estate, Class II Sub-Account/(1) /
Van Kampen LIT Government, Class II Sub-Account
- --------------------------------------------------------------------------------
CATEGORY C
AIM V.I. Basic Value - Series II Sub-Account
AIM V.I. Core Equity - Series II Sub-Account
AIM V.I. Mid Cap Core Equity - Series II Sub-Account
Fidelity VIP Contrafund(R) - Service Class 2 Sub-Account
Fidelity VIP Equity-Income - Service Class 2 Sub-Account
Fidelity VIP Index 500 - Service Class 2 Sub-Account
Fidelity VIP Overseas - Service Class 2 Sub-Account
Fidelity VIP Asset Manager/(SM)/ - Service Class 2 Sub-Account
Janus Aspen Series Overseas - Service Shares Sub-Account
Janus Aspen Series Forty - Service Shares Sub-Account
Janus Aspen Series Perkins Mid Cap Value - Service Shares Sub-Account
Janus Aspen Series INTECH Risk-Managed Core - Service Shares Sub-Account
Janus Aspen Series Balanced - Service Shares Sub-Account
Legg Mason Partners Variable All Cap - Class II Sub-Account/(2)/
Legg Mason Partners Variable Investors - Class II Sub-Account/(3)/
MFS Investors Trust - Service Class Sub-Account
MFS Investors Growth Stock - Service Class Sub-Account
MFS Total Return - Service Class Sub-Account
MFS Value - Service Class Sub-Account
Oppenheimer MidCap/VA - Service Shares Sub-Account
Oppenheimer Main Street Small Cap(R)/VA - Service Shares Sub-Account
Rydex VT All-Cap Opportunity Sub-Account
T. Rowe Price Equity Income - II Sub-Account
T. Rowe Price Blue Chip Growth - II Sub-Account
Van Eck Worldwide Multi-Manager Alternatives Sub-Account
Van Kampen LIT Growth and Income, Class II Sub-Account
- --------------------------------------------------------------------------------
(1)Morgan Stanley Investment Management Inc., the investment advisor to the UIF
Portfolios, does business in certain instances as Van Kampen.
54 PROSPECTUS
(2)Effective April 27, 2007, the Legg Mason Partners Variable All Cap Portfolio
- Class II was reorganized into the Legg Mason Partners Variable Fundamental
Value Portfolio - Class I.
(3)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio - Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio - Class I.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. The guaranteed income payment amounts will
change if the frequency of payments or the length of the payment period changes.
We calculate the fixed income payments by:
.. adjusting the portion of the Contract Value in any Fixed Account Option on
the Payout Start Date by any applicable Market Value Adjustment;
.. deducting any applicable taxes; and
.. applying the resulting amount to the greater of: (a) the appropriate income
payment factor for the selected Income Plan from the Income Payment Table
in your Contract; or (b) such other income payment factor as we are
offering on the Payout Start Date.
We may defer your request to make a withdrawal from fixed income payments for a
period of up to 6 months or whatever shorter time state law may require. If we
defer payments for 30 days or more, we will pay interest as required by law
from the date we receive the withdrawal request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age, except in
states that require unisex tables. We reserve the right to use income payment
tables that do not distinguish on the basis of sex to the extent permitted by
applicable law. In certain employment-related situations, employers are
required by law to use the same income payment tables for men and women.
Accordingly, if the Contract is used in connection with an employment-related
retirement or benefit plan and we do not offer unisex annuity tables in your
state, you should consult with legal counsel as to whether the Contract is
appropriate.
55 PROSPECTUS
Death Benefits
- --------------------------------------------------------------------------------
DEATH PROCEEDS
Under certain conditions, described below, we will pay a death settlement
("Death Proceeds") for this Contract on the death of the Contract Owner,
Annuitant, or Co-Annuitant if the death occurs prior to the Payout Start Date.
The Death Proceeds will not exceed the Contract Value plus $1 million. If the
Owner or Annuitant dies after the Payout Start Date, we will pay remaining
income payments as described in the "Payout Phase" section of your Contract.
See "Income Payments" on page 50 for more information.
We will determine the value of the Death Proceeds as of the end of the
Valuation Date during which we receive the first Complete Request for
Settlement (the next Valuation Date, if we receive the request after 3:00 p.m.
Central Time). In order to be considered a "Complete Request for Settlement," a
claim for distribution of the Death Proceeds must include "Due Proof of Death"
in any of the following forms of documentation:
.. A certified copy of the death certificate;
.. A certified copy of a decree of a court of competent jurisdiction as to the
finding of death; or
.. Any other proof acceptable to us.
"Death Proceeds" are determined based on when we receive a Complete Request for
Settlement:
.. If we receive a Complete Request for Settlement within 180 days of the
death of the Contract Owner, Annuitant, or Co-Annuitant, as applicable, the
Death Proceeds are equal to the "Death Benefit."
.. If we receive a Complete Request for Settlement more than 180 days after
the death of the Contract Owner, Annuitant, or Co-Annuitant, as applicable,
the Death Proceeds are equal to the greater of the Contract Value or
Settlement Value. We reserve the right to waive or extend, in a
nondiscriminatory manner, the 180-day period in which the Death Proceeds
will equal the Death Benefit.
Where there are multiple Beneficiaries, we will only value the Death Proceeds
at the time the first Beneficiary submits the necessary documentation in good
order. Any Death Proceeds amounts attributable to any Beneficiary which remain
in the Variable Sub-accounts are subject to investment risk.
DEATH BENEFIT OPTIONS
In addition to the ROP Death Benefit included in your Contract, we offer the
following death benefit options which may be added to your Contract:
.. MAV Death Benefit Option
.. Annual Increase Death Benefit Option
.. Enhanced Earnings Death Benefit Option
The amount of the Death Benefit depends on which death benefit option(s) you
select. Not all death benefit options are available in all states.
You may select any combination of death benefit options on the issue date of
your Contract or at a later date, subject to state availability and issue age
restrictions. You may not add any of the death benefit options to your
Contract after Contract issue without our prior approval if your Contract Value
is greater than $1,000,000 at the time you want to add an option.
The "Death Benefit" is equal to the Enhanced Earnings Death Benefit (if
selected) plus the greatest of:
.. The Contract Value;
.. The Settlement Value;
.. The ROP Death Benefit;
.. The MAV Death Benefit Option (if selected); or
.. The Annual Increase Death Benefit Option (if selected).
The "Settlement Value" is the amount that would be paid in the event of a full
withdrawal of the Contract Value.
The "ROP Death Benefit" is equal to the sum of all purchase payments (and
Credit Enhancements for Consultant Solutions Plus Contracts), reduced by a
proportional withdrawal adjustment for each withdrawal. The withdrawal
adjustment is equal to the withdrawal amount divided by the Contract Value
immediately prior to the withdrawal, and the result is multiplied by:
The sum of all purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) made prior to the withdrawal, less any prior
withdrawal adjustments.
Maximum Anniversary Value Death Benefit Option.
The MAV Death Benefit Option is available only if the oldest Contract Owner and
Co-Annuitant, or, if the Contract is owned by a non-living person, the oldest
Annuitant, are age 79 or younger on the Rider Application Date. There is an
additional mortality and expense risk charge for this death benefit option,
currently equal to 0.20%. We may change what we charge for this death benefit
option, but it will never exceed 0.50%. Once added to your Contract, we
guarantee that we will not increase the mortality and expense risk charge you
pay for this death benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the MAV Death
Benefit is equal to the Contract Value. After the Rider Date and prior to the
date we determine the Death Proceeds (see "Death Proceeds" on page 55), the MAV
Death Benefit is recalculated each time a purchase payment or withdrawal is
made as well as on each Contract Anniversary as follows:
.. Each time a purchase payment is made, the MAV Death Benefit is increased by
the amount of the purchase payment (and Credit Enhancement for Consultant
Solutions Plus Contracts).
.. Each time a withdrawal is made, the MAV Death Benefit is reduced by a
proportional withdrawal adjustment, defined as the withdrawal amount
divided by the Contract Value immediately prior to the withdrawal, and the
result multiplied by the most recently calculated MAV Death Benefit.
.. On each Contract Anniversary until the first Contract Anniversary following
the 80th birthday of the oldest Contract Owner or Co-Annuitant, whichever
occurs first, or, if the Contract is owned by a non-living person, the
oldest Annuitant, the MAV Death Benefit is recalculated as the greater of
the Contract Value on that date or the most recently calculated MAV Death
Benefit.
If no purchase payments or withdrawals are made after the Rider Date, the MAV
Death Benefit will be equal to the greatest of the Contract Value on the Rider
Date and the Contract Values on each subsequent Contract Anniversary after the
Rider Date through the first Contract Anniversary following the 80th birthday
of the oldest Contract Owner or Co-Annuitant, whichever occurs first, or, if
the Contract is owned by a non-living person, the oldest Annuitant, but before
the date we determine the Death Proceeds. If, upon death of the Contract Owner,
the Contract is continued under Option D as described on page 60, and if the
New Contract Owner is age 80 or younger on the date we determine the Death
Proceeds, then the MAV Death Benefit Option will continue. The MAV Death
Benefit will continue to be recalculated for purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts), withdrawals, and on each
Contract Anniversary after the date we determine the Death Proceeds until the
earlier of:
.. The first Contract Anniversary following the 80th birthday of either the
oldest Contract Owner or the Co-Annuitant, whichever is earlier, or, if the
Contract is owned by a non-living person, the oldest Annuitant. (After the
80th birthday of either the oldest Contract Owner or the Co-Annuitant,
whichever is earlier, or, if the Contract is owned by a non-living person,
the oldest Annuitant, the MAV Death Benefit will be recalculated only for
purchase payments (and Credit Enhancements for Consultant Solutions Plus
Contracts) and withdrawals); or
.. The date we next determine the Death Proceeds.
Annual Increase Death Benefit Option.
The Annual Increase Death Benefit Option is only available if the oldest
Contract Owner and Co-Annuitant, or, if the Contract is owned by a non-living
person, the oldest Annuitant, are age 79 or younger on the Rider Application
Date. There is an additional mortality and expense risk charge for this death
benefit option, currently equal to 0.30%. We may change what we charge for this
death benefit option, but
56 PROSPECTUS
it will never exceed 0.50%. Once added to your Contract, we guarantee that we
will not increase the mortality and expense risk charge you pay for this death
benefit option.
On the date we issue the rider for this benefit ("Rider Date"), the Annual
Increase Death Benefit is equal to the Contract Value. The Annual Increase
Death Benefit, plus purchase payments (and Credit Enhancements for Consultant
Solutions Plus Contracts) made after the Rider Date and less withdrawal
adjustments for withdrawals made after the Rider Date, will accumulate interest
on a daily basis at a rate equivalent to 5% per year (may be 3% in certain
states), subject to the "Cap" defined below. This accumulation will continue
until the earlier of:
(a) the first Contract Anniversary following the 80th birthday of the oldest
Contract Owner or Co-Annuitant, whichever occurs first, or, if the Contract is
owned by a non-living person, the oldest Annuitant; or
(b) the date we determine the Death Proceeds.
After the 5% interest accumulation (may be 3% in certain states) ends, the
Annual Increase Death Benefit will continue to be increased by purchase
payments (and Credit Enhancements for Consultant Solutions Plus Contracts) and
reduced by withdrawal adjustments for withdrawals until the death benefit
option terminates. The withdrawal adjustment is a proportional adjustment,
defined as the withdrawal amount divided by the Contract Value immediately
prior to the withdrawal, and the result multiplied by the amount of the Annual
Increase Death Benefit immediately prior to the withdrawal.
The Annual Increase Death Benefit Cap is equal to:
.. 200% of the Contract Value as of the Rider Date; plus
.. 200% of purchase payments (and Credit Enhancements for Consultant Solutions
Plus Contracts) made after the Rider Date, but excluding any purchase
payments (and Credit Enhancements for Consultant Solutions Plus Contracts)
made in the 12-month period immediately prior to the death of a Contract
Owner or the Co-Annuitant, or, if the Contract is owned by a non-living
person, an Annuitant; minus
.. Withdrawal adjustments for any withdrawals made after the Rider Date. Refer
to Appendix E for withdrawal adjustment examples.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 60, and if the New Contract Owner is age 80 or younger on
the date we determine the Death Proceeds, then the Annual Increase Death
Benefit Option will continue. The amount of the Annual Increase Death Benefit
as of the date we determine the Death Proceeds, plus subsequent purchase
payments (and Credit Enhancements for Consultant Solutions Plus Contracts),
less withdrawal adjustments for any subsequent withdrawals, will accumulate
daily at a rate equivalent to 5% per year (may be 3% in certain states) from
the date we determine the Death Proceeds, until the earlier of:
.. The first Contract Anniversary following the 80th birthday of either the
oldest Contract Owner or the Co-Annuitant, whichever is earlier, or, if the
Contract is owned by a non-living person, the oldest Annuitant. (After the
80th birthday of either the oldest Contract Owner or the Co-Annuitant,
whichever is earlier, or, if the Contract is owned by a non-living person,
the oldest Annuitant, the Annual Increase Death Benefit will be
recalculated only for purchase payments and withdrawals (and Credit
Enhancements for Consultant Solutions Plus Contracts)); or
.. The date we next determine the Death Proceeds.
Enhanced Earnings Death Benefit Option.
The "Enhanced Earnings Death Benefit Option" is only available if the oldest
Contract Owner and Co-Annuitant, or, if the Contract is owned by a non-living
person, the oldest Annuitant, are age 79 or younger on the Rider Application
Date. There is an additional mortality and expense risk charge for this death
benefit option, currently equal to:
.. 0.25%, if the oldest Contract Owner and Co-Annuitant, or, if the Contract
is owned by a non-living person, the oldest Annuitant, are age 70 or
younger on the Rider Application Date; and
.. 0.40%, if the oldest Contract Owner or, if older, the Co-Annuitant, or, if
the Contract is owned by a non-living person, the oldest Annuitant, is age
71 or older and age 79 or younger on the Rider Application Date.
We may change what we charge for this death benefit option, but it will never
exceed 0.35% for issue ages 0-70 and 0.50% for issue ages 71-79. Once added to
your Contract, we guarantee that we will not increase the mortality and expense
risk charge you pay for this death benefit option. However, if your spouse
elects to continue the Contract in the event of your death and if he or she
elects to continue the Enhanced Earnings Death Benefit Option, the mortality
and expense risk charge for the death benefit option will be based on the ages
of the oldest new Contract Owner and the Co-Annuitant, or, if the Contract is
owned by a non-living person, the oldest Annuitant, at the time the Contract is
continued.
If the oldest Contract Owner and Co-Annuitant, or, if the Contract is owned by
a non-living person, the oldest Annuitant, are age 70 or younger on the Rider
Application Date, the Enhanced Earnings Death Benefit is equal to the lesser of:
57 PROSPECTUS
.. 100% of "In-Force Premium" (excluding purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts) made after the date
we issue the rider for this benefit ("Rider Date") and during the
twelve-month period immediately prior to the death of a Contract Owner or
Co-Annuitant, or, if the Contract is owned by a non-living person, an
Annuitant); or
.. 40% of "In-Force Earnings"
calculated as of the date we determine the Death Proceeds.
If the oldest Contract Owner or, if older, the Co-Annuitant, or, if the
Contract is owned by a non-living person, the oldest Annuitant, is age 71 or
older and age 79 or younger on the Rider Application Date, the Enhanced
Earnings Death Benefit is equal to the lesser of:
.. 50% of "In-Force Premium" (excluding purchase payments (and Credit
Enhancements for Consultant Solutions Plus Contracts) made after the Rider
Date and during the twelve-month period immediately prior to the death of a
Contract Owner or Co-Annuitant, or, if the Contract is owned by a
non-living person, an Annuitant); or
.. 25% of "In-Force Earnings"
calculated as of the date we determine the Death Proceeds.
In-Force Earnings are equal to the current Contract Value less In-Force
Premium. If this quantity is negative, then In-Force Earnings are equal to zero.
In-Force Premium is equal to the Contract Value on the Rider Date, plus the sum
of all purchase payments, including any associated credit enhancements, made
after the Rider Date, less the sum of all "Excess-of-Earnings Withdrawals" made
after the Rider Date.
An Excess-of-Earnings Withdrawal is equal to the excess, if any, of the amount
of the withdrawal over the amount of the In-Force Earnings immediately prior to
the withdrawal.
Refer to Appendix E for numerical examples that illustrate how the Enhanced
Earnings Death Benefit Option is calculated.
If, upon death of the Contract Owner, the Contract is continued under Option D
as described on page 60, and if the New Contract Owner is younger than age 80
on the date we determine the Death Proceeds, then this death benefit option
will continue unless the New Contract Owner elects to terminate the death
benefit option. If the death benefit option is continued, the following will
apply as of the date we determine the Death Proceeds upon continuation:
.. The Rider Date will be changed to the date we determine the Death Proceeds;
.. The In-Force Premium is equal to the Contract Value as of the new Rider
Date plus all purchase payments, including any associated credit
enhancements, made after the Rider Date, less the sum of all the
Excess-of-Earnings Withdrawals made after the Rider Date;
.. The Enhanced Earnings Death Benefit after the new Rider Date will be
determined as described above, but using the ages of the oldest Contract
Owner and Co-Annuitant, or, if the Contract is owned by a non-living
person, the oldest Annuitant, as of the new Rider Date.
.. The mortality and expense risk charge, for this rider, will be determined
as described above, but using the ages of the oldest Contract Owner and
Co-Annuitant, or, if the Contract is owned by a non-living person, the
oldest Annuitant, as of the new Rider Date.
If the Contract Owner's, Co-Annuitant's or Annuitant's age is misstated, the
Enhanced Earnings Death Benefit and the mortality and expense risk charge for
this death benefit option will be calculated according to the corrected age as
of the Rider Date. Your Contract Value will be adjusted to reflect the
mortality and expense risk charge for this death benefit option that should
have been assessed based on the corrected age.
ALL OPTIONS.
We reserve the right to impose limitations on the Investment Alternatives in
which you may invest as a condition of these options. These restrictions may
include, but are not limited to, maximum investment limits on certain
investment alternatives, exclusion of certain investment alternatives, required
minimum allocations to certain investment alternatives, restrictions on
transfers to and from certain investment alternatives, and/or the required use
of Automatic Portfolio Rebalancing. Currently, no such restrictions are being
imposed.
These death benefit options will terminate and the corresponding Rider Fee will
cease on the earliest of the following to occur:
.. the date the Contract is terminated;
.. if, upon the death of the Contract Owner, the Contract is continued under
Option D as described in the Death of Owner section on page 60, and the New
Owner is older than age 80 (age 80 or older for the Enhanced Earnings Death
Benefit Option) on the date we determine the Death Proceeds. The death
benefit option will terminate on the date we determine the Death Proceeds;
.. if the Contract is not continued in the Accumulation Phase under either the
Death of Owner or Death of Annuitant provisions of the Contract. The death
benefit option will terminate on the date we determine the Death Proceeds;
58 PROSPECTUS
.. on the date the Contract Owner (if the current Contract Owner is a living
person) is changed for any reason other than death unless the New Contract
Owner is a trust and the Annuitant is a current Contract Owner;
.. on the date the Contract Owner (if the current Contract Owner is a
non-living person) is changed for any reason unless the New Contract Owner
is a non-living person or is a current Annuitant; or
.. the Payout Start Date.
Notwithstanding the preceding, in the event of the Contract Owner's death, if
the Contract Owner's spouse elects to continue the Contract (as permitted in
the Death of Owner provision below) he or she may terminate the Enhanced
Earnings Death Benefit at that time.
DEATH BENEFIT PAYMENTS
Death of Contract Owner
If a Contract Owner dies prior to the Payout Start Date, then the surviving
Contract Owners will be the "New Contract Owners". If there are no surviving
Contract Owners, then subject to any restrictions previously placed upon them,
the Beneficiaries will be the New Contract Owners.
If there is more than one New Contract Owner taking a share of the Death
Proceeds, each New Contract Owner will be treated as a separate and independent
Contract Owner of his or her respective share of the Death Proceeds. Each New
Contract Owner will exercise all rights related to his or her share of the
Death Proceeds, including the sole right to elect one of the Option(s) below,
subject to any restrictions previously placed upon the New Contract Owner. Each
New Contract Owner may designate a Beneficiary(ies) for his or her respective
share, but that designated Beneficiary(ies) will be restricted to the Option
chosen by the original New Contract Owner.
The Options available to each New Contract Owner will be determined by the
applicable following Category in which the New Contract Owner is defined. An
Option will be deemed to have been chosen on the day we receive written
notification in a form satisfactory to us.
New Contract Owner Categories
Category 1. If your spouse (or Annuitant's spouse in the case of a grantor
trust-owned Contract) is the sole New Contract Owner of the entire Contract,
your spouse must choose from among the death settlement Options A, B, C, D, or
E described below. If he or she does not choose one of these Options, then
Option D will apply.
Category 2. If the New Contract Owner is a living person who is not your
spouse (or Annuitant's spouse in the case of a grantor trust-owned Contract),
or there is more than one New Contract Owner, all of whom are living persons,
each New Contract Owner must choose from among the death settlement Options A,
B, C, or E described below. If a New Contract Owner does not choose one of
these Options, then Option C will apply for that New Contract Owner.
Category 3. If there are one or more New Contract Owner(s) and at least one of
the New Contract Owners is a non-living person such as a corporation or a
trust, all New Contract Owners are considered to be non-living persons for
purposes of the death settlement options. Each New Contract Owner must choose
death settlement Option A or C described below. If a New Contract Owner does
not choose one of these Options, then Option C will apply for that New Contract
Owner.
The death settlement options we currently offer are:
Option A. The New Contract Owner may elect to receive the Death Proceeds in a
lump sum.
Option B. The New Contract Owner may elect to apply the Death Proceeds to one
of the Income Plans described above. Such income payments must begin within one
year of the date of death and must be payable:
.. Over the life of the New Contract Owner; or
.. For a guaranteed payment period of at least 5 years (60 months), but not to
exceed the life expectancy of the New Contract Owner; or
.. Over the life of the New Contract Owner with a guaranteed payment period of
at least 5 years (60 months), but not to exceed the life expectancy of the
New Contract Owner.
Option C. The New Contract Owner may elect to receive the Contract Value
payable within 5 years of the date of death. The Contract Value, as of the date
we receive the first Complete Request for Settlement, will be reset to equal
the Death Proceeds as of that date. Any excess amount of the Death Proceeds
over the Contract Value on that date will be allocated to the PIMCO Money
Market Variable Sub-account unless the New Contract Owner provides other
allocation instructions.
The New Contract Owner may not make any additional purchase payments under this
option. Withdrawal charges will be waived for any withdrawals made during the
5-year period after the date of death; however, amounts withdrawn may be
subject to Market Value Adjustments. The New Contract Owner may exercise all
rights set forth in the Transfers provision.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the New Contract Owner's Beneficiary(ies) will receive the greater
of the remaining Settlement Value or the remaining Contract Value within 5
years of the date of the original Contract Owner's death.
Option D. The New Contract Owner may elect to continue the Contract in the
Accumulation Phase. If the
59 PROSPECTUS
Contract Owner was also the Annuitant, then the New Contract Owner will be the
new Annuitant. This Option may only be exercised once per Contract. The
Contract Value, as of the date we receive the first Complete Request for
Settlement, will be reset to equal the Death Proceeds as of that date.
Unless otherwise instructed by the continuing spouse, the excess, if any, of
the Death Proceeds over the Contract Value will be allocated to the
Sub-accounts of the Variable Account. This excess will be allocated in
proportion to your Contract Value in those Sub-accounts as of the end of the
Valuation Date that we receive the complete request for settlement except that
any portion of this excess attributable to the Fixed Account Options will be
allocated to the PIMCO Money Market Variable Sub-account.
Within 30 days after the date we determine the Death Proceeds, the New Contract
Owner may transfer all or a portion of the excess of the Death Proceeds, if
any, into any combination of Variable Sub-accounts, the Standard Fixed Account
and the Market Value Adjusted Fixed Account without incurring a transfer fee.
Any such transfer does not count as one of the free transfers allowed each
Contract Year and is subject to any minimum allocation amount specified in this
Contract.
The New Contract Owner may make a single withdrawal of any amount within one
year of the date of your death without incurring a Withdrawal Charge; however,
the amount withdrawn may be subject to a Market Value Adjustment and a 10% tax
penalty if the New Contract Owner is under age 59 1/2.
Option E. For Nonqualified Contracts, the New Contract Owner may elect to make
withdrawals at least annually of amounts equal to the "Annual Required
Distribution" calculated for each calendar year. The first such withdrawal must
occur within:
.. One year of the date of death;
.. The same calendar year as the date we receive the first Complete Request
for Settlement; and
.. One withdrawal frequency.
The New Contract Owner must select the withdrawal frequency (monthly,
quarterly, semi-annual, or annual). Once this option is elected and frequency
of withdrawals is chosen, they cannot be changed by the New Contract Owner and
become irrevocable.
In the calendar year in which the Death Proceeds are determined, the Annual
Required Distribution is equal to the Contract Value on the date of the first
distribution divided by the "Life Expectancy" of the New Contract Owner and the
result multiplied by a fraction that represents the portion of the calendar
year remaining after the date of the first distribution. (The Contract Value,
as of the date we receive the Complete Request for Settlement, will be reset to
equal the Death Proceeds as of that date. The Contract Value on the date of the
first distribution may be more or less than the Contract Value as of the date
we receive the Complete Request for Settlement.) The Life Expectancy in that
calendar year is equal to the life expectancy value from IRS Tables based on
the age of the New Contract Owner as of his or her birthday in the same
calendar year.
In any subsequent calendar year, the Annual Required Distribution is equal to
the Contract Value as of December 31 of the prior year divided by the remaining
Life Expectancy of the New Contract Owner. In each calendar year after the
calendar year in which the first distribution occurred, the Life Expectancy of
the New Contract Owner is the Life Expectancy calculated in the previous
calendar year minus one (1) year. If the Life Expectancy is less than one (1),
the Annual Required Distribution is equal to the Contract Value.
If the New Contract Owner dies before the Contract Value is completely
withdrawn, the scheduled withdrawals will continue to be paid to the New
Contract Owner's Beneficiary(ies). The Contract Value invested in the Variable
Sub-Accounts will be subject to investment risk until it is withdrawn.
We reserve the right to offer additional death settlement options.
Death of Annuitant
If the Annuitant dies prior to the Payout Start Date, then the surviving
Contract Owners will have the Options available to the New Contract Owner,
determined by the applicable following category in which the New Contract Owner
is defined, unless:
.. The Annuitant was also the Contract Owner, in which case the Death of Owner
provisions above apply; or
.. The Contract Owner is a grantor trust established by a living person, in
which case the Beneficiary(ies) will be deemed the New Contract Owners and
the Death of Contract Owner provisions above will apply.
Surviving Contract Owner Categories
Category 1. If the Owner is a living person, the Contract will continue in the
Accumulation Phase with a new Annuitant. The Contract Value will not be
increased by any excess of the Death Proceeds over the Contract Value as of the
date that we determine the value of the Death Proceeds.
The new Annuitant will be:
.. A person you name by written request, subject to the conditions described
in the Annuitant section of this Contract; otherwise,
.. The youngest Owner; otherwise,
.. The youngest Beneficiary.
60 PROSPECTUS
Category 2. If the Owner is a corporation, trust, or other non-living person,
the Owner must choose between the following two options:
Option A. The Owner may elect to receive the Death Proceeds in a lump sum.
Option B. The Owner may elect to receive the Contract Value payable within 5
years of the Annuitant's date of death. Under this Option, the excess, if any,
of the Death Proceeds over the Contract Value, as of the date that we determine
the value of the Death Proceeds, will be added to the Contract Value. Unless
otherwise instructed by the Owner, this excess will be allocated to the PIMCO
Money Market Variable Sub-account. During the 5 year period that follows the
Annuitant's date of death, the Owner may exercise all rights as set forth in
the Transfers section. Withdrawal Charges will be waived for any withdrawals
made during this 5 year period, however, the amount withdrawal may be subject
to a Market Value Adjustment.
No additional purchase payments may be added to the Contract under this
section. Withdrawal Charges will be waived for any withdrawals made during this
5 year period.
We reserve the right to offer additional death settlement options.
Qualified Contracts
The death settlement options for Qualified Plans, including IRAs, may be
different to conform with the individual tax requirements of each type of
Qualified Plan. Please refer to your Endorsement for IRA plans, if applicable,
for additional information on your death settlement options. In the case of
certain qualified plans, the terms of the plans may govern the right to
benefits, regardless of the terms of the Contract.
Spousal Protection Benefit (Co-Annuitant) Option and Death of Co-Annuitant
We offer a Spousal Protection Benefit (Co-Annuitant) Option that may be added
to your Contract subject to the following conditions:
.. The individually owned Contract must be either a traditional, Roth, or
Simplified Employee Pension IRA.
.. The Contract Owner's spouse must be the sole Primary Beneficiary of the
Contract and will be the named Co-Annuitant.
.. The Contract Owner must be age 90 or younger on the Rider Application Date;
and the Co-Annuitant must be age 79 or younger on the Rider Application
Date.
.. The option may only be added when we issue the Contract or within 6 months
of the Contract Owner's marriage. We may require proof of marriage in a
form satisfactory to us. Currently, you may not add the option to your
Contract without our prior approval if your Contract Value is greater than
$1,000,000 at the time you choose to add the Option.
Under the Spousal Protection Benefit Option, the Co-Annuitant will be
considered to be an Annuitant under the Contract during the Accumulation Phase
except that the Co-Annuitant will not be considered to be an Annuitant for
purposes of determining the Payout Start Date and the "Death of Annuitant"
provision of your Contract does not apply on the death of the Co-Annuitant.
You may change the Co-Annuitant to a new spouse only if you provide proof of
remarriage in a form satisfactory to us. Once we accept a change, the change
will take effect on the date you signed the request. Each change is subject to
any payment we make or other action we take before we accept it. At any time,
there may only be one Co-Annuitant under your Contract.
There is an annual Rider Fee of 0.10% of the Contract Value for Options added
on or after May 1, 2005. For Options added prior to this date, there is no
charge for this Option. We reserve the right to assess an annual Rider Fee not
to exceed 0.15% for Options added in the future. Once this Option is added to
your Contract, we guarantee that we will not increase what we charge you for
this Option. For Contracts purchased on or after May 1, 2005, we may
discontinue offering the Spousal Protection Benefit (Co-Annuitant) Option at
any time.
The option will terminate upon the date your written termination request is
accepted by us or will terminate on the earliest of the following occurrences:
.. upon the death of the Co-Annuitant (as of the date we determine the Death
Proceeds);
.. upon the death of the Contract Owner (as of the date we determine the Death
Proceeds);
.. on the date the Contract is terminated;
.. on the Payout Start Date; or
.. on the date you change the beneficiary of the Contract and the change is
accepted by us;
.. for options added on or after May 1, 2005, the Contract Owner may terminate
the option upon the divorce of the Contract Owner and the Co-Annuitant by
providing written notice and proof of divorce in a form satisfactory to us;
.. for options added prior to May 1, 2005, the Owner may terminate this option
at anytime by written notice in a form satisfactory to us.
Once the Option is terminated, a new Spousal Protection Benefit (Co-Annuitant)
Option cannot be added to the Contract unless the last Option attached to the
Contract was terminated due to divorce or a change of beneficiary.
61 PROSPECTUS
Death of Co-Annuitant. If the Co-Annuitant dies prior to the Payout Start
Date, subject to the following conditions, the Contract will be continued
according to Option D under the "Death of Owner" provision of your Contract:
.. The Co-Annuitant must have been your legal spouse on the date of his or her
death; and
.. Option D of the "Death of Owner" provision of your Contract has not
previously been exercised.
The Contract may only be continued once under Option D under the "Death of
Owner" provision. For a description of Option D, see the "Death of Owner"
section of this prospectus.
More Information
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LINCOLN BENEFIT LIFE COMPANY
Lincoln Benefit is the issuer of the Contract. Lincoln Benefit is a stock life
insurance company organized under the laws of the state of Nebraska in 1938.
Our legal domicile and principal business address is P.O. Box 80469, Lincoln,
Nebraska. Lincoln Benefit is a wholly-owned subsidiary of Allstate Life
Insurance Company ("Allstate Life"), a stock life insurance company
incorporated under the laws of the State of Illinois.
Allstate Life is a wholly-owned subsidiary of Allstate Insurance Company
("Allstate"), a stock property-liability insurance company incorporated under
the laws of Illinois. All outstanding capital stock of Allstate is owned by The
Allstate Corporation.
We are authorized to conduct life insurance and annuity business in the
District of Columbia, Guam, U.S. Virgin Islands and all states except New York.
We will market the Contract everywhere we conduct variable annuity business.
The Contracts offered by this prospectus are issued by us and will be funded in
the Variable Account and/or the Fixed Account.
Under our reinsurance agreement with Allstate Life, substantially all contract
related transactions are transferred to Allstate Life and substantially all of
the assets backing our reinsured liabilities are owned by Allstate Life.
Accordingly, the results of operations with respect to applications received
and contracts issued by Lincoln Benefit are not reflected in our financial
statements. The amounts reflected in our financial statements relate only to
the investment of those assets of Lincoln Benefit that are not transferred to
Allstate Life under the reinsurance agreement. These assets represent our
general account and are invested and managed by Allstate Life. While the
reinsurance agreement provides us with financial backing from Allstate Life, it
does not create a direct contractual relationship between Allstate Life and you.
Under the Company's reinsurance agreements with Allstate Life, the Company
reinsures all reserve liabilities with Allstate Life except for variable
contracts. The Company's variable Contract assets and liabilities are held in
legally-segregated, unitized separate accounts and are retained by the Company.
However, the transactions related to such variable contracts such as premiums,
expenses and benefits are transferred to Allstate Life.
Effective June 1, 2006, Allstate Life entered into an agreement ("the
Agreement") with Prudential Financial, Inc. and its subsidiary, The Prudential
Insurance Company of America ("PICA") pursuant to which Allstate Life sold,
through a combination of coinsurance and modified coinsurance reinsurance,
substantially all of its variable annuity business, including that of its
subsidiary Lincoln Benefit. Pursuant to the Agreement Allstate Life and PICA
also entered into an administrative services agreement which provides that PICA
or an affiliate administer the Variable Account and the Contracts. The benefits
and provisions of the Contracts have not been changed by these transactions and
agreements. None of the transactions or agreements have changed the fact that
we are primarily liable to you under your Contract.
VARIABLE ACCOUNT
Lincoln Benefit Life Variable Annuity Account was originally established in
1992, as a segregated asset account of Lincoln Benefit. The Variable Account
meets the definition of a "separate account" under the federal securities laws
and is registered with the SEC as a unit investment trust under the Investment
Company Act of 1940. The SEC does not supervise the management of the Variable
Account or Lincoln Benefit.
We own the assets of the Variable Account, but we hold them separate from our
other assets. To the extent that these assets are attributable to the Contract
Value of the Contracts offered by this prospectus, these assets are not
chargeable with liabilities arising out of any other business we may conduct.
Income, gains, and losses, whether or not realized, from assets allocated to
the Variable Account are credited to or charged against the Variable Account
without regard to our other income, gains, or losses. Our obligations arising
under the Contracts are general corporate obligations of Lincoln Benefit.
The Variable Account is divided into Sub-accounts. The assets of each
Sub-account are invested in the shares of one of the Portfolios. We do not
guarantee the investment performance of the Variable Account, its Sub-accounts
or the Portfolios. Values allocated to the Variable Account and the amount of
Variable Annuity payments will rise and fall with the values of shares of the
Portfolios and are also reduced by Contract charges. We may also use the
Variable Account to fund our other
62 PROSPECTUS
annuity contracts. We will account separately for each type of annuity contract
funded by the Variable Account.
We have included additional information about the Variable Account in the
Statement of Additional Information. You may obtain a copy of the Statement of
Additional Information by writing to us or calling us at 1-800-457-7617. We
have reproduced the Table of Contents of the Statement of Additional
Information on page 74.
THE PORTFOLIOS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolios at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you
have allocated your Contract Value. Under current law, however, you are
entitled to give us instructions on how to vote those shares on certain
matters. Based on our present view of the law, we will vote the shares of the
Portfolios that we hold directly or indirectly through the Variable Account in
accordance with instructions that we receive from Contract Owners entitled to
give such instructions.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be
determined by dividing the reserve for such Contract allocated to the
applicable Sub-Account by the net asset value per share of the corresponding
Portfolio. The votes decrease as income payments are made and as the reserves
for the Contract decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as
we vote shares for which we have received instructions, unless we determine
that we may vote such shares in our own discretion. We will apply voting
instructions to abstain on any item to be voted upon on a pro-rata basis to
reduce the votes eligible to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
Changes in Portfolios. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment,
further investment in such shares is no longer desirable in view of the
purposes of the Contract, we may eliminate that Portfolio and substitute shares
of another eligible investment fund. Any substitution of securities will comply
with the requirements of the Investment Company Act of 1940. We also may add
new Variable Sub-Accounts that invest in additional underlying funds. We will
notify you in advance of any change.
Conflicts of Interest. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity
contracts. It is conceivable that in the future it may be unfavorable for
variable life insurance separate accounts and variable annuity separate
accounts to invest in the same Portfolio. The board of directors/trustees of
these Portfolios monitors for possible conflicts among separate accounts buying
shares of the Portfolios. Conflicts could develop for a variety of reasons. For
example, differences in treatment under tax and other laws or the failure by a
separate account to comply with such laws could cause a conflict. To eliminate
a conflict, the Portfolio's board of directors/trustees may require a separate
account to withdraw its participation in a Portfolio. A Portfolio's net asset
value could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account withdrawing because of a conflict.
THE CONTRACTS
Distribution. ALFS, Inc. ("ALFS"), located at 3100 Sanders Road, Northbrook,
IL 60062-7154 serves as distributor of the Contracts. ALFS, an affiliate of
Lincoln Benefit, is a wholly owned subsidiary of Allstate Life Insurance
Company. ALFS is registered as a broker-dealer under the Securities Exchange
Act of 1934, as amended, and is a member of the Financial Industry Regulatory
Authority ("FINRA").
ALFS does not sell Contracts directly to purchasers. ALFS enters into selling
agreements with affiliated and unaffiliated broker-dealers and banks to sell
the Contracts through their registered representatives. The broker-dealers are
registered with the SEC and are FINRA member firms. Their registered
representatives are licensed as insurance agents by applicable state insurance
authorities and appointed as agents of Lincoln Benefit in order to sell the
Contracts. Contracts also may be sold by representatives or employees of banks
that may be acting as broker-dealers without separate registration under the
Exchange Act, pursuant to legal and regulatory exceptions.
We will pay commissions to broker-dealers and banks which sell the Contracts.
Commissions paid vary, but we may pay up to a maximum sales commission of 7.5%
of total purchase payments. In addition, we may pay ongoing annual compensation
of up to 1.25% of Contract Value. Individual representatives receive a portion
of compensation paid to the broker-dealer or bank with which they are
associated in accordance with
63 PROSPECTUS
the broker-dealer's or bank's practices. We estimate that commissions and
annual compensation, when combined, will not exceed 8.5% of total purchase
payments. However, commissions and annual compensation could exceed that amount
because ongoing annual compensation is related to Contract Value and the number
of years the Contract is held.
From time to time, we pay asset-based compensation and/or marketing allowances
to banks and broker-dealers. These payments vary among individual banks and
broker dealers, and the asset-based payments may be up to 0.25% of Contract
Value annually. These payments are intended to contribute to the promotion and
marketing of the Contracts, and they vary among banks and broker-dealers. The
marketing and distribution support services include but are not limited to:
(1) placement of the Contracts on a list of preferred or recommended products
in the bank's or broker-dealer's distribution system; (2) sales promotions with
regard to the Contracts; (3) participation in sales conferences; and
(4) helping to defray the costs of sales conferences and educational seminars
for the bank or broker-dealer's registered representatives. A list of
broker-dealers and banks that ALFS paid pursuant to such arrangements is
provided in the Statement of Additional Information, which is available upon
request. For a free copy, please write or call us at the address or telephone
number listed on the front page of this prospectus, or go to the SEC's Web site
(http://www.sec.gov).
To the extent permitted by FINRA rules and other applicable laws and
regulations, we may pay or allow other promotional incentives or payments in
the form of cash or non-cash compensation. We may not offer the arrangements to
all broker-dealers and banks and the terms of the arrangement may differ among
broker-dealers and banks.
Individual registered representatives, broker-dealers, banks, and branch
managers within some broker-dealers and banks participating in one of these
compensation arrangements may receive greater compensation for selling the
contract than for selling a different contact that is not eligible for the
compensation arrangement. While we take the compensation into account when
establishing contract charges, any such compensation will be paid by us or ALFS
and will not result in any additional charge to you. Your registered
representative can provide you with more information about the compensation
arrangements that apply to the sale of the contract.
Lincoln Benefit does not pay ALFS a commission for distribution of the
Contracts. ALFS compensates its representatives who act as wholesalers, and
their sales management personnel, for Contract sales. This compensation is
based on a percentage of premium payments and/or a percentage of Contract
values. The underwriting agreement with ALFS provides that we will reimburse
ALFS for expenses incurred in distributing the Contracts, including any
liability to Contract Owners arising out of services rendered or Contracts
issued.
Lincoln Benefit and ALFS have also entered into wholesaling agreements with
certain independent contractors and their broker-dealers. Under these
agreements, compensation based on a percentage of premium payments and/or
Contract values is paid to the wholesaling broker-dealer for the wholesaling
activities of their registered representative.
Administration. We have primary responsibility for all administration of the
Contracts and the Variable Account. Pursuant to the Agreement, Allstate Life
entered into an administrative services agreement with PICA whereby PICA or an
affiliate provides administrative services to the Variable Account and the
Contracts on our behalf.
We provide the following administrative services, among others:
.. issuance of the Contracts;
.. maintenance of Contract Owner records;
.. Contract Owner services;
.. calculation of unit values;
.. maintenance of the Variable Account; and
.. preparation of Contract Owner reports.
We will send you Contract statements at least annually. We will also send you
transaction confirmations. You should notify us promptly in writing of any
address change. You should read your statements and confirmations carefully and
verify their accuracy. You should contact us promptly if you have a question
about a periodic statement or a confirmation. We will investigate all
complaints and make any necessary adjustments retroactively, but you must
notify us of a potential error within a reasonable time after the date of the
questioned statement. If you wait too long, we will make the adjustment as of
the date that we receive notice of the potential error.
We will also provide you with additional periodic and other reports,
information and prospectuses as may be required by federal securities laws.
ANNUITIES HELD WITHIN A QUALIFIED PLAN
If you use the Contract within an employer sponsored qualified retirement plan,
the plan may impose different or additional conditions or limitations on
withdrawals, waivers of withdrawal charges, death benefits, Payout Start Dates,
income payments, and other Contract features. In addition, adverse tax
consequences may result if Qualified Plan limits on distributions and other
conditions are not met. Please consult your Qualified Plan administrator for
more information. Lincoln Benefit no longer issues deferred annuities to
employer sponsored qualified retirement plans.
64 PROSPECTUS
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Variable Account. Lincoln
Benefit is engaged in routine lawsuits which, in our management's judgment, are
not of material importance to the respective total assets or material with
respect to the Variable Account.
LEGAL MATTERS
All matters of Nebraska law pertaining to the Contract, including the validity
of the Contract and our right to issue the Contract under Nebraska law, have
been passed upon by Susan L. Lees, General Counsel of Lincoln Benefit.
Taxes
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The following discussion is general and is not intended as tax advice. Lincoln
Benefit makes no guarantee regarding the tax treatment of any Contract or
transaction involving a Contract.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual
circumstances. If you are concerned about any tax consequences with regard to
your individual circumstances, you should consult a competent tax adviser.
TAXATION OF LINCOLN BENEFIT LIFE COMPANY
Lincoln Benefit is taxed as a life insurance company under Part I of Subchapter
L of the Code. Since the Variable Account is not an entity separate from
Lincoln Benefit, and its operations form a part of Lincoln Benefit, it will not
be taxed separately. Investment income and realized capital gains of the
Variable Account are automatically applied to increase reserves under the
Contract. Under existing federal income tax law, Lincoln Benefit believes that
the Variable Account investment income and capital gains will not be taxed to
the extent that such income and gains are applied to increase the reserves
under the Contract. Accordingly, Lincoln Benefit does not anticipate that it
will incur any federal income tax liability attributable to the Variable
Account, and therefore Lincoln Benefit does not intend to make provisions for
any such taxes. If Lincoln Benefit is taxed on investment income or capital
gains of the Variable Account, then Lincoln Benefit may impose a charge against
the Variable Account in order to make provision for such taxes.
TAXATION OF VARIABLE ANNUITIES IN GENERAL
Tax Deferral. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
.. the Contract Owner is a natural person,
.. the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
.. Lincoln Benefit is considered the owner of the Variable Account assets for
federal income tax purposes.
Non-Natural Owners. Non-natural owners are also referred to as Non Living
Owners in this prospectus. As a general rule, annuity contracts owned by
non-natural persons such as corporations, trusts, or other entities are not
treated as annuity contracts for federal income tax purposes. The income on
such contracts does not enjoy tax deferral and is taxed as ordinary income
received or accrued by the non-natural owner during the taxable year.
Exceptions to the Non-Natural Owner Rule. There are several exceptions to the
general rule that annuity contracts held by a non-natural owner are not treated
as annuity contracts for federal income tax purposes. Contracts will generally
be treated as held by a natural person if the nominal owner is a trust or other
entity which holds the contract as agent for a natural person. However, this
special exception will not apply in the case of an employer who is the nominal
owner of an annuity contract under a non-Qualified deferred compensation
arrangement for its employees. Other exceptions to the non-natural owner rule
are: (1) contracts acquired by an estate of a decedent by reason of the death
of the decedent; (2) certain qualified contracts; (3) contracts purchased by
employers upon the termination of certain Qualified Plans; (4) certain
contracts used in connection with structured settlement agreements; and
(5) immediate annuity contracts, purchased with a single premium, when the
annuity starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
Grantor Trust Owned Annuity. Contracts owned by a grantor trust are considered
owned by a non-natural owner. Grantor trust owned contracts receive tax
deferral as described in the Exceptions to the Non-Natural Owner Rule section.
In accordance with the Code, upon the death of the annuitant, the death benefit
must be paid. According to your Contract, the Death Benefit is paid to the
beneficiary. A trust named beneficiary, including a grantor trust, has two
options for receiving any death benefits: 1) a lump sum payment, or 2) payment
deferred up to five years from date of death.
Diversification Requirements. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for
federal income tax purposes. As a result, the income on the Contract will be
taxed as ordinary income received or
65 PROSPECTUS
accrued by the Contract owner during the taxable year. Although Lincoln Benefit
does not have control over the Portfolios or their investments, we expect the
Portfolios to meet the diversification requirements.
Ownership Treatment. The IRS has stated that a contract owner will be
considered the owner of separate account assets if he possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. At the time the diversification regulations were issued, the
Treasury Department announced that the regulations do not provide guidance
concerning circumstances in which investor control of the separate account
investments may cause a Contract owner to be treated as the owner of the
separate account. The Treasury Department also stated that future guidance
would be issued regarding the extent that owners could direct sub-account
investments without being treated as owners of the underlying assets of the
separate account.
Your rights under the Contract are different than those described by the IRS in
private and published rulings in which it found that Contract owners were not
owners of separate account assets. For example, if your contract offers more
than twenty (20) investment alternatives you have the choice to allocate
premiums and contract values among a broader selection of investment
alternatives than described in such rulings. You may be able to transfer among
investment alternatives more frequently than in such rulings. These differences
could result in you being treated as the owner of the Variable Account. If this
occurs, income and gain from the Variable Account assets would be includible in
your gross income. Lincoln Benefit does not know what standards will be set
forth in any regulations or rulings which the Treasury Department may issue. It
is possible that future standards announced by the Treasury Department could
adversely affect the tax treatment of your Contract. We reserve the right to
modify the Contract as necessary to attempt to prevent you from being
considered the federal tax owner of the assets of the Variable Account.
However, we make no guarantee that such modification to the Contract will be
successful.
Taxation of Partial and Full Withdrawals. If you make a partial withdrawal
under a Non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
contract minus any amounts previously received from the Contract if such
amounts were properly excluded from your gross income. If you make a full
withdrawal under a Non-Qualified Contract, the amount received will be taxable
only to the extent it exceeds the investment in the Contract.
Taxation of Annuity Payments. Generally, the rule for income taxation of
annuity payments received from a Non-Qualified Contract provides for the return
of your investment in the Contract in equal tax-free amounts over the payment
period. The balance of each payment received is taxable. For fixed annuity
payments, the amount excluded from income is determined by multiplying the
payment by the ratio of the investment in the Contract (adjusted for any refund
feature or period certain) to the total expected value of annuity payments for
the term of the Contract. If you elect variable annuity payments, the amount
excluded from taxable income is determined by dividing the investment in the
Contract by the total number of expected payments. The annuity payments will be
fully taxable after the total amount of the investment in the Contract is
excluded using these ratios. If any variable payment is less than the
excludable amount you should contact a competent tax advisor to determine how
to report any unrecovered investment. The federal tax treatment of annuity
payments is unclear in some respects. As a result, if the IRS should provide
further guidance, it is possible that the amount we calculate and report to the
IRS as taxable could be different. If you die, and annuity payments cease
before the total amount of the investment in the Contract is recovered, the
unrecovered amount will be allowed as a deduction for your last taxable year.
Taxation of Level Monthly Variable Annuity Payments. You may have an option to
elect a variable income payment stream consisting of level monthly payments
that are recalculated annually. Although we will report your levelized payments
to the IRS in the year distributed, it is possible the IRS could determine that
receipt of the first monthly payout of each annual amount is constructive
receipt of the entire annual amount. If the IRS were to take this position, the
taxable amount of your levelized payments would be accelerated to the time of
the first monthly payout and reported in the tax year in which the first
monthly payout is received.
Withdrawals After the Payout Start Date. Federal tax law is unclear regarding
the taxation of any additional withdrawal received after the Payout Start Date.
It is possible that a greater or lesser portion of such a payment could be
taxable than the amount we determine.
Distribution at Death Rules. In order to be considered an annuity contract for
federal income tax purposes, the Contract must provide:
.. if any Contract Owner dies on or after the Payout Start Date but before the
entire interest in the Contract has been distributed, the remaining portion
of such interest must be distributed at least as rapidly as under the
method of distribution being used as of the date of the Contract Owner's
death;
.. if any Contract Owner dies prior to the Payout Start Date, the entire
interest in the Contract will be distributed within 5 years after the date
of the Contract Owner's death. These requirements are satisfied if any
portion of the Contract Owner's interest that is payable to (or for the
benefit of) a designated Beneficiary is distributed over the life of
66 PROSPECTUS
such Beneficiary (or over a period not extending beyond the life expectancy
of the Beneficiary) and the distributions begin within 1 year of the
Contract Owner's death. If the Contract Owner's designated Beneficiary is
the surviving spouse of the Contract Owner, the Contract may be continued
with the surviving spouse as the new Contract Owner;
.. if the Contract Owner is a non-natural person, then the Annuitant will be
treated as the Contract Owner for purposes of applying the distribution at
death rules. In addition, a change in the Annuitant on a Contract owned by
a non-natural person will be treated as the death of the Contract Owner.
We administer certain spousal rights under the Contract and related tax
reporting in accordance with our understanding of the Defense of Marriage Act
(which defines a "marriage" as a legal union between a man and a woman and a
"spouse" as a person of the opposite sex). Depending on the state in which your
Contract is issued, we may offer certain spousal benefits to civil union
couples or same-sex marriage spouses. You should be aware, however, that
federal tax law does not recognize civil unions or same-sex marriages.
Therefore, we cannot permit a civil union partner or same-sex spouse to
continue the Contract upon the death of the first partner under the Contract's
"spousal continuance" provision. Civil union couples and same-sex marriage
spouses should consider that limitation before selecting a spousal benefit
under the Contract.
Taxation of Annuity Death Benefits. Death Benefit amounts are included in
income as follows:
.. if distributed in a lump sum, the amounts are taxed in the same manner as a
total withdrawal, or
.. if distributed under an Income Plan, the amounts are taxed in the same
manner as annuity payments.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the
taxable amount of any premature distribution from a non-Qualified Contract. The
penalty tax generally applies to any distribution made prior to the date you
attain age 59 1/2. However, no penalty tax is incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or becoming totally disabled,
.. made in substantially equal periodic payments over the Contract Owner's
life or life expectancy, or over the joint lives or joint life expectancies
of the Contract Owner and the Beneficiary,
.. made under an immediate annuity, or
.. attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine how these exceptions
may apply to your situation.
Substantially Equal Periodic Payments. With respect to non-Qualified Contracts
using substantially equal periodic payments or immediate annuity payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior
to the later of 5 years or the Contract Owner's attaining age 59 1/2 would be
subject to a 10% penalty tax unless another exception to the penalty tax
applied. The tax for the year of the modification is increased by the penalty
tax that would have been imposed without the exception, plus interest for the
years in which the exception was used. A material modification does not include
permitted changes described in published IRS rulings. You should consult a
competent tax advisor prior to creating or modifying a substantially equal
periodic payment stream.
Tax Free Exchanges under Internal Revenue Code Section 1035. A 1035 exchange
is a tax-free exchange of a non-Qualified life insurance contract, endowment
contract or annuity contract into a non-Qualified annuity contract. The
contract owner(s) must be the same on the old and new contract. Basis from the
old contract carries over to the new contract so long as we receive that
information from the relinquishing company. If basis information is never
received, we will assume that all exchanged funds represent earnings and will
allocate no cost basis to them.
Partial Exchanges. The IRS has issued rulings that permit partial exchanges of
annuity contracts. Effective June 30, 2008, a partial exchange, of a deferred
annuity contract for another deferred annuity contract, will qualify for
tax-deferral only if no amount is withdrawn or surrendered from either contract
for a period of 12 months. The 12 month period begins on the date when exchange
proceeds are treated as premiums paid for the recipient contract. Withdrawals
from, annuitizations, taxable Owner or Annuitant changes, or surrenders of
either contract within the 12 month period will retroactively negate the
partial exchange, unless one of the following applies:
.. the contact owner reaches 59 1/2, becomes totally disabled, dies, obtains
a divorce or suffers a loss of employment after the partial exchange was
completed and prior to the withdrawal, annuitization, Owner or Annuitant
change, or surrender;
.. if the annuity is owned by an entity, the annuitant dies after the partial
exchange was completed and prior to the withdrawal, annuitization, Owner or
Annuitant change or surrender;
.. the withdrawal is allocable to investment in the Contract before August 14,
1982; or,
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.. the annuity is a qualified funding asset within the meaning of Code section
130(d).
If a partial exchange is retroactively negated, the amount originally
transferred to the recipient contract is treated as a withdrawal from the
source contract, taxable to the extent of any gain in that contract on the date
of the exchange. An additional 10% tax penalty may also apply if the Contract
Owner is under age 59 1/2. Your Contract may not permit partial exchanges.
Taxation of Ownership Changes. If you transfer a non-Qualified Contract
without full and adequate consideration to a person other than your spouse (or
to a former spouse incident to a divorce), you will be taxed on the difference
between the Contract Value and the investment in the Contract at the time of
transfer. Any assignment or pledge (or agreement to assign or pledge) of the
Contract Value is taxed as a withdrawal of such amount or portion and may also
incur the 10% penalty tax.
Aggregation of Annuity Contracts. The Code requires that all non-Qualified
deferred annuity contracts issued by Lincoln Benefit (or its affiliates) to the
same Contract Owner during any calendar year be aggregated and treated as one
annuity contract for purposes of determining the taxable amount of a
distribution.
INCOME TAX WITHHOLDING
Generally, Lincoln Benefit is required to withhold federal income tax at a rate
of 10% from all non-annuitized distributions. The customer may elect out of
withholding by completing and signing a withholding election form. If no
election is made or no U.S. taxpayer identification number is provided we will
automatically withhold the required 10% of the taxable amount. In certain
states, if there is federal withholding, then state withholding is also
mandatory.
Lincoln Benefit is required to withhold federal income tax using the wage
withholding rates for all annuitized distributions. The customer may elect out
of withholding by completing and signing a withholding election form. If no
election is made, we will automatically withhold using married with three
exemptions as the default. If no U.S. taxpayer identification number is
provided, we will automatically withhold using single with zero exemptions as
the default. In certain states, if there is federal withholding, then state
withholding is also mandatory.
Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.
Generally, Code Section 1441 provides that Lincoln Benefit as a withholding
agent must withhold 30% of the taxable amounts paid to a non-resident alien. A
non- resident alien is someone other than a U.S. citizen or resident alien. We
require an original IRS Form W-8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W-8BEN. A U.S. taxpayer identification number is a social security number
or an individual taxpayer identification number ("ITIN"). ITINs are issued by
the IRS to non-resident alien individuals who are not eligible to obtain a
social security number. The U.S. does not have a tax treaty with all countries
nor do all tax treaties provide an exclusion or lower withholding rate for
annuities.
TAX QUALIFIED CONTRACTS
The income on tax sheltered annuity (TSA) and IRA investments is tax deferred,
and the income from annuities held by such plans does not receive any
additional tax deferral. You should review the annuity features, including all
benefits and expenses, prior to purchasing an annuity as a TSA or IRA. Tax
Qualified Contracts are contracts purchased as or in connection with:
.. Individual Retirement Annuities (IRAs) under Code Section 408(b);
.. Roth IRAs under Code Section 408A;
.. Simplified Employee Pension (SEP IRA) under Code Section 408(k);
.. Savings Incentive Match Plans for Employees (SIMPLE IRA) under Code
Section 408(p);
.. Tax Sheltered Annuities under Code Section 403(b);
.. Corporate and Self Employed Pension and Profit Sharing Plans under Code
Section 401; and
.. State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans under Code Section 457.
Lincoln Benefit reserves the right to limit the availability of the Contract
for use with any of the retirement plans listed above or to modify the Contract
to conform with tax requirements. If you use the Contract within an employer
sponsored qualified retirement plan, the plan may impose different or
additional conditions or limitations on withdrawals, waiver of charges, death
benefits, Payout Start Dates, income payments, and other Contract features. In
addition, adverse tax consequences may result if Qualified Plan limits on
distributions and other conditions are not met. Please consult your Qualified
Plan administrator for more information. Lincoln Benefit no longer issues
deferred annuities to employer sponsored qualified retirement plans.
The tax rules applicable to participants with tax qualified annuities vary
according to the type of contract and the terms and conditions of the
endorsement. Adverse tax consequences may result from certain transactions such
as excess contributions, premature distributions, and, distributions that do
not conform to specified commencement and minimum distribution rules. Lincoln
Benefit can issue an individual retirement
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annuity on a rollover or transfer of proceeds from a decedent's IRA, TSA, or
employer sponsored retirement plan under which the decedent's surviving spouse
is the beneficiary. Lincoln Benefit does not offer an individual retirement
annuity that can accept a transfer of funds for any other, non-spousal,
beneficiary of a decedent's IRA, TSA, or employer sponsored qualified
retirement plan.
Please refer to your Endorsement for IRAs or 403(b) plans, if applicable, for
additional information on your death settlement options. In the case of certain
Qualified Plans, the terms of the Qualified Plan Endorsement and the plans may
govern the right to benefits, regardless of the terms of the Contract.
Taxation of Withdrawals from an Individually Owned Tax Qualified Contract. If
you make a partial withdrawal under a Tax Qualified Contract other than a Roth
IRA, the portion of the payment that bears the same ratio to the total payment
that the investment in the Contract (i.e., nondeductible IRA contributions)
bears to the Contract Value, is excluded from your income. We do not keep track
of nondeductible contributions, and generally all tax reporting of
distributions from Tax Qualified Contracts other than Roth IRAs will indicate
that the distribution is fully taxable.
"Qualified distributions" from Roth IRAs are not included in gross income.
"Qualified distributions" are any distributions made more than five taxable
years after the taxable year of the first contribution to any Roth IRA and
which are:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made to a beneficiary after the Contract Owner's death,
.. attributable to the Contract Owner being disabled, or
.. made for a first time home purchase (first time home purchases are subject
to a lifetime limit of $10,000).
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions.
Required Minimum Distributions. Generally, Tax Qualified Contracts (excluding
Roth IRAs) require minimum distributions upon reaching age 70 1/2. Failure to
withdraw the required minimum distribution will result in a 50% tax penalty on
the shortfall not withdrawn from the Contract. Effective December 31, 2005, the
IRS requires annuity contracts to include the actuarial present value of other
benefits for purposes of calculating the required minimum distribution amount.
These other benefits may include accumulation, income, or death benefits. Not
all income plans offered under the Contract satisfy the requirements for
minimum distributions. Because these distributions are required under the Code
and the method of calculation is complex, please see a competent tax advisor.
Note that under the Worker, Retiree and Employer Recovery Act, Required Minimum
Distributions are suspended for 2009 and are scheduled to resume in 2010.
The Death Benefit and Tax Qualified Contracts. Pursuant to the Code and IRS
regulations, an IRA (e.g., traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA)
may not invest in life insurance contracts. However, an IRA may provide a death
benefit that equals the greater of the purchase payments or the Contract Value.
The Contract offers a death benefit that in certain circumstances may exceed
the greater of the purchase payments or the Contract Value. We believe that the
Death Benefits offered by your Contract do not constitute life insurance under
these regulations.
It is also possible that certain death benefits that offer enhanced earnings
could be characterized as an incidental death benefit. If the death benefit
were so characterized, this could result in current taxable income to a
Contract Owner. In addition, there are limitations on the amount of incidental
death benefits that may be provided under Qualified Plans, such as in
connection with a TSA or employer sponsored qualified retirement plan.
Lincoln Benefit reserves the right to limit the availability of the Contract
for use with any of the Qualified Plans listed above.
Penalty Tax on Premature Distributions from Tax Qualified Contracts. A 10%
penalty tax applies to the taxable amount of any premature distribution from a
Tax Qualified Contract. The penalty tax generally applies to any distribution
made prior to the date you attain age 59 1/2. However, no penalty tax is
incurred on distributions:
.. made on or after the date the Contract Owner attains age 59 1/2,
.. made as a result of the Contract Owner's death or total disability,
.. made in substantially equal periodic payments over the Contract Owner's
life or life expectancy, or over the joint lives or joint life expectancies
of the Contract Owner and the Beneficiary,
.. made after separation from service after age 55 (does not apply to IRAs),
.. made pursuant to an IRS levy,
.. made for certain medical expenses,
.. made to pay for health insurance premiums while unemployed (applies only
for IRAs),
.. made for qualified higher education expenses (applies only for IRAs)
69 PROSPECTUS
.. made for a first time home purchase (up to a $10,000 lifetime limit and
applies only for IRAs), and
.. from an IRA or attributable to elective deferrals under a 401(k) plan,
403(b) annuity, or certain similar arrangements made to individuals who
(because of their being members of a reserve component) are ordered or
called to active duty after Sept. 11, 2001, for a period of more than 179
days or for an indefinite period; and made during the period beginning on
the date of the order or call to duty and ending at the close of the active
duty period.
During the first 2 years of the individual's participation in a SIMPLE IRA,
distributions that are otherwise subject to the premature distribution penalty,
will be subject to a 25% penalty tax.
You should consult a competent tax advisor to determine how these exceptions
may apply to your situation.
Substantially Equal Periodic Payments on Tax Qualified Contracts. With respect
to Tax Qualified Contracts using substantially equal periodic payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior
to the later of 5 years or the taxpayer's attaining age 59 1/2 would be subject
to a 10% penalty tax unless another exception to the penalty tax applied. The
tax for the year of the modification is increased by the penalty tax that would
have been imposed without the exception, plus interest for the years in which
the exception was used. A material modification does not include permitted
changes described in published IRS rulings. You should consult a competent tax
advisor prior to creating or modifying a substantially equal periodic payment
stream.
Income Tax Withholding on Tax Qualified Contracts. Generally, Lincoln Benefit
is required to withhold federal income tax at a rate of 10% from all
non-annuitized distributions that are not considered "eligible rollover
distributions." The customer may elect out of withholding by completing and
signing a withholding election form. If no election is made or if no U.S.
taxpayer identification number is provided, we will automatically withhold the
required 10% from the taxable amount. In certain states, if there is federal
withholding, then state withholding is also mandatory. Lincoln Benefit is
required to withhold federal income tax at a rate of 20% on all "eligible
rollover distributions" unless you elect to make a "direct rollover" of such
amounts to an IRA or eligible retirement plan. Eligible rollover distributions
generally include all distributions from Tax Qualified Contracts, including
TSAs but excluding IRAs, with the exception of:
.. required minimum distributions, or,
.. a series of substantially equal periodic payments made over a period of at
least 10 years, or,
.. a series of substantially equal periodic payments made over the life (joint
lives) of the participant (and beneficiary), or,
.. hardship distributions.
Note that under the Worker, Retiree and Employer Recovery Act of 2008, required
minimum distributions are suspended for 2009. Such payments are not considered
to be eligible rollover distributions, and thus, not subject to 20%
withholding. But, these payments can be rolled over to an IRA or other
retirement plan within 60 days of receipt by the participant.
For all annuitized distributions that are not subject to the 20% withholding
requirement, Lincoln Benefit is required to withhold federal income tax using
the wage withholding rates. The customer may elect out of withholding by
completing and signing a withholding election form. If no election is made, we
will automatically withhold using married with three exemptions as the default.
If no U.S. taxpayer identification number is provided, we will automatically
withhold using single with zero exemptions as the default. In certain states,
if there is federal withholding, then state withholding is also mandatory.
Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.
Generally, Code Section 1441 provides that Lincoln Benefit as a withholding
agent must withhold 30% of the taxable amounts paid to a non-resident alien. A
non-resident alien is someone other than a U.S. citizen or resident alien. We
require an original IRS Form W-8BEN at issue to certify the owners' foreign
status. Withholding may be reduced or eliminated if covered by an income tax
treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a fully completed
Form W-8BEN. A U.S. taxpayer identification number is a social security number
or an individual taxpayer identification number ("ITIN"). ITINs are issued by
the IRS to non-resident alien individuals who are not eligible to obtain a
social security number. The U.S. does not have a tax treaty with all countries
nor do all tax treaties provide an exclusion or lower withholding rate for
annuities.
Charitable IRA Distributions. The Pension Protection Act of 2006 included a
charitable giving incentive permitting tax-free IRA distributions for
charitable purposes. The Emergency Economic Stabilization Act of 2008 extended
this provision for two years.
For distributions in tax years beginning after 2005 and before 2010, the Act
provides an exclusion from gross
70 PROSPECTUS
income, up to $100,000, for otherwise taxable IRA distributions from a
traditional or Roth IRA that are qualified charitable distributions. To
constitute a qualified charitable distribution, the distribution must be made
(1) directly by the IRA trustee to certain qualified charitable organizations
and (2) on or after the date the IRA owner attains age 70 1/2. Distributions
that are excluded from income under this provision are not taken into account
in determining the individual's deduction, if any, for charitable contributions.
The IRS has indicated that an IRA trustee is not responsible for determining
whether a distribution to a charity is one that satisfies the requirements for
the new income tax exclusion added by the Pension Protection Act. As a result
the general rules for reporting IRA distributions apply.
Individual Retirement Annuities. Code Section 408(b) permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity (IRA). Individual Retirement Annuities are
subject to limitations on the amount that can be contributed and on the time
when distributions may commence. Certain distributions from other types of
qualified retirement plans may be "rolled over" on a tax-deferred basis into an
Individual Retirement Annuity.
Roth Individual Retirement Annuities. Code Section 408A permits eligible
individuals to make nondeductible contributions to an individual retirement
program known as a Roth Individual Retirement Annuity. Roth Individual
Retirement Annuities are subject to limitations on the amount that can be
contributed and on the time when distributions may commence.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. For distributions after 2007, the Pension Protection Act of 2006
allows distributions from qualified retirement plans including tax sheltered
annuities and governmental Section 457 plans to be rolled over directly into a
Roth IRA, subject to the usual rules that apply to conversions from a
traditional IRA into a Roth IRA. The income portion of a conversion or rollover
distribution is taxable currently, but is exempted from the 10% penalty tax on
premature distributions. An individual with adjusted gross income (AGI) of
$100,000 or more won't be able to rollover amounts from an eligible retirement
plan into a Roth IRA. Please note, however, that the $100,000 AGI limit will be
eliminated for tax years beginning after December 31, 2009. Effective
January 1, 2005, the IRS requires conversions of annuity contracts to include
the actuarial present value of other benefits for purposes of valuing the
taxable amount of the conversion.
Annuities Held By Individual Retirement Accounts (commonly known as Custodial
IRAs). Code Section 408 permits a custodian or trustee of an Individual
Retirement Account to purchase an annuity as an investment of the Individual
Retirement Account. If an annuity is purchased inside of an Individual
Retirement Account, then the Annuitant must be the same person as the
beneficial owner of the Individual Retirement Account.
If you have a contract issued as an IRA under Code Section 408(b) and request
to change the ownership to an IRA custodian permitted under Section 408, we
will treat a request to change ownership from an individual to a custodian as
an indirect rollover. We will send a Form 1099R to report the distribution and
the custodian should issue a Form 5498 for the contract value contribution.
Generally, the death benefit of an annuity held in an Individual Retirement
Account must be paid upon the death of the Annuitant. However, in most states,
the Contract permits the custodian or trustee of the Individual Retirement
Account to continue the Contract in the accumulation phase, with the
Annuitant's surviving spouse as the new Annuitant, if the following conditions
are met:
1) The custodian or trustee of the Individual Retirement Account is the owner
of the annuity and has the right to the death proceeds otherwise payable
under the Contract;
2) The deceased Annuitant was the beneficial owner of the Individual Retirement
Account;
3) We receive a complete request for settlement for the death of the Annuitant;
and
4) The custodian or trustee of the Individual Retirement Account provides us
with a signed certification of the following:
(a) The Annuitant's surviving spouse is the sole beneficiary of the
Individual Retirement Account;
(b) The Annuitant's surviving spouse has elected to continue the Individual
Retirement Account as his or her own Individual Retirement Account; and
(c) The custodian or trustee of the Individual Retirement Account has
continued the Individual Retirement Account pursuant to the surviving
spouse's election.
Simplified Employee Pension IRA. Code Section 408(k) allows eligible employers
to establish simplified employee pension plans for their employees using
individual retirement annuities. These employers may, within specified limits,
make deductible contributions on behalf of the employees to the individual
retirement annuities. Employers intending to use the Contract in connection
with such plans should seek competent tax advice.
Savings Incentive Match Plans for Employees (SIMPLE IRA). Code Section 408(p)
allows eligible employers with 100 or fewer employees to establish SIMPLE
retirement plans for their employees using individual retirement annuities. In
general, a SIMPLE IRA
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consists of a salary deferral program for eligible employees and matching or
nonelective contributions made by employers. Employers intending to purchase
the Contract as a SIMPLE IRA should seek competent tax and legal advice. SIMPLE
IRA plans must include the provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2007 (EGTRRA) to avoid adverse tax consequences. If your
current SIMPLE IRA plan uses IRS Model Form 5304-SIMPLE with a revision date of
March 2002 or later, then your plan is up to date. If your plan has a revision
date prior to March 2002, please consult with your tax or legal advisor to
determine the action you need to take in order to comply with this requirement.
To determine if you are eligible to contribute to any of the above listed IRAs
(traditional, Roth, SEP, or SIMPLE), please refer to IRS Publication 590 and
your competent tax advisor.
Tax Sheltered Annuities. Code Section 403(b) provides tax-deferred retirement
savings plans for employees of certain non-profit and educational
organizations. Under Section 403(b), any contract used for a 403(b) plan must
provide that distributions attributable to salary reduction contributions made
after 12/31/88, and all earnings on salary reduction contributions, may be made
only on or after the date the employee:
.. attains age 59 1/2,
.. severs employment,
.. dies,
.. becomes disabled, or
.. incurs a hardship (earnings on salary reduction contributions may not be
distributed on account of hardship).
These limitations do not apply to withdrawals where Lincoln Benefit is directed
to transfer some or all of the Contract Value to another 403(b) plan.
Generally, we do not accept funds in 403(b) contracts that are subject to the
Employee Retirement Income Security Act of 1974 (ERISA).
Caution: Under recent IRS regulations we can accept contributions, transfers
and rollovers only if we have entered into an information-sharing agreement, or
its functional equivalent, with the applicable employer or its plan
administrator. Unless your contract is grandfathered from certain provisions in
these regulations, we will only process certain transactions (e.g, transfers,
withdrawals, hardship distributions and, if applicable, loans) with employer
approval. This means that if you request one of these transactions we will not
consider your request to be in good order, and will not therefore process the
transaction, until we receive the employer's approval in written or electronic
form.
Corporate and Self-Employed Pension and Profit Sharing Plans.
Section 401(a) of the Code permits corporate employers to establish various
types of tax favored retirement plans for employees. Self-employed individuals
may establish tax favored retirement plans for themselves and their employees
(commonly referred to as "H.R.10" or "Keogh"). Such retirement plans may permit
the purchase of annuity contracts. Lincoln Benefit no longer issues annuity
contracts to employer sponsored qualified retirement plans.
There are two owner types for contracts intended to qualify under
Section 401(a): a qualified plan fiduciary or an annuitant owner.
.. A qualified plan fiduciary exists when a qualified plan trust that is
intended to qualify under Section 401(a) of the Code is the owner. The
qualified plan trust must have its own tax identification number and a
named trustee acting as a fiduciary on behalf of the plan. The annuitant
should be the person for whose benefit the contract was purchased.
.. An annuitant owner exists when the tax identification number of the owner
and annuitant are the same, or the annuity contract is not owned by a
qualified plan trust. The annuitant should be the person for whose benefit
the contract was purchased.
If a qualified plan fiduciary is the owner of the contract, the qualified plan
must be the beneficiary so that death benefits from the annuity are distributed
in accordance with the terms of the qualified plan. Annuitant owned contracts
require that the beneficiary be the annuitant's spouse (if applicable), which
is consistent with the required IRS language for qualified plans under
Section 401(a). A completed Annuitant Owned Qualified Plan Designation of
Beneficiary form is required in order to change the beneficiary of an annuitant
owned Qualified Plan contract.
State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans. Section 457 of the Code permits employees of state and local
governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants
in an eligible deferred compensation plan. In eligible governmental plans, all
assets and income must be held in a trust/custodial account/annuity contract
for the exclusive benefit of the participants and their beneficiaries. To the
extent the Contracts are used in connection with a non-governmental eligible
plan, employees are considered general creditors of the employer and the
employer as owner of the Contract has the sole right to the proceeds of the
Contract. Under eligible 457 plans, contributions made for the benefit of the
employees will not be includible in the employees' gross income until
distributed from the plan. Lincoln Benefit no longer issues annuity contracts
to 457 plans.
72 PROSPECTUS
Annual Reports and Other Documents
- --------------------------------------------------------------------------------
Lincoln Benefit's Annual Report on Form 10-K for the year ended December 31,
2008, is incorporated herein by reference, which means that it is legally a
part of this prospectus.
All other reports filed with the SEC under the Exchange Act since the Form 10-K
Annual Report, including filings made on Form 10-Q and Form 8-K, and all
documents or reports we file with the SEC under the Exchange Act after the date
of this prospectus and before we terminate the offering of the securities under
this prospectus are also incorporated herein by reference, which means that
they are legally a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual report on
Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K,
electronically on the SEC's "EDGAR" system using the identifying number CIK No.
0000910739. The SEC maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. The address of the site is http://www.sec.gov. You
also can view these materials at the SEC's Public Reference Room at 100 F
Street NE, Room 1580, Washington, DC 20549-2001. For more information on the
operations of SEC's Public Reference Room, call 1-800-SEC-0330.
If you have received a copy of this prospectus, and would like a free copy of
any document incorporated herein by reference (other than exhibits not
specifically incorporated by reference into the text of such documents), please
write or call us at P.O. Box 758565, Topeka, KS 66675-8565 or 800-457-7617.
73 PROSPECTUS
Statement of Additional Information
Table of Contents
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additions, Deletions, or Substitutions of Investments
-----------------------------------------------------------------
The Contracts
-----------------------------------------------------------------
Calculation of Accumulation Unit Values
-----------------------------------------------------------------
Calculation of Variable Income Payments
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
General Matters
------------------------------------
Experts
------------------------------------
Financial Statements
------------------------------------
Accumulation Unit Values
------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE
ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.
74 PROSPECTUS
Appendix A
Contract Comparison Chart
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Feature Classic Plus Elite
- ----------------------------------------------------------------------------------------------------------------------------
up to 5% depending on
issue age and amount of
Credit Enhancement None purchase payments None
- ----------------------------------------------------------------------------------------------------------------------------
Mortality and Expense
Risk Charge
(Base Contract) 1.25% 1.45% 1.60%
- ----------------------------------------------------------------------------------------------------------------------------
Withdrawal Charge 8.5/ 8.5/ 8.5/ 7.5/
(% of purchase payment) 7/ 7/ 6/ 5/ 4/ 3/ 2 6.5/ 5.5/ 4/2.5 7/ 6/ 5
- ----------------------------------------------------------------------------------------------------------------------------
Withdrawal Charge Confinement, Terminal Illness, Confinement, Terminal Confinement, Terminal
Waivers Unemployment Illness, Unemployment Illness, Unemployment
- ------------------------------------------------------------------------------------
Feature Classic Select
- ------------------------------------------------------------------------------------
Credit Enhancement None None
- ------------------------------------------------------------------------------------
Mortality and Expense
Risk Charge
(Base Contract) 1.25% 1.70%
- ------------------------------------------------------------------------------------
Withdrawal Charge
(% of purchase payment) 7/ 7/ 6/ 5/ 4/ 3/ 2 None
- ------------------------------------------------------------------------------------
Withdrawal Charge Confinement, Terminal Illness,
Waivers Unemployment N/A
The Fixed Account Options available depend on the type of Contract you have
purchased and the state in which your Contract was issued. The following tables
summarize the availability of the Fixed Account Options in general. Please
check with your representative for specific details for your state.
DCA Fixed Account Option*
---------------------------------------------------
Classic Plus Elite Select
---------------------------------------------------
6-month 6-month 6-month N/A
Transfer Periods ---------------------------------
12-month 12-month 12-month N/A
Standard Fixed Account Option (not available in all states)**
- -----------------------------------------------------------------------------------------------
Classic Plus Elite Select
- -----------------------------------------------------------------------------------------------
1-year N/A N/A N/A
--------------------------------------------------------
N/A N/A N/A N/A
Guarantee Periods --------------------------------------------------------
N/A N/A N/A N/A
--------------------------------------------------------
N/A N/A N/A N/A
MVA Fixed Account Option (not available in all states)***
- -----------------------------------------------------------------------------------------------------
Classic Plus Elite Select
- -----------------------------------------------------------------------------------------------------
1-year 1-year 1-year 1-year
--------------------------------------------------------------
3-year 3-year 3-year 3-year
--------------------------------------------------------------
Guarantee Periods 5-year 5-year 5-year 5-year
--------------------------------------------------------------
7-year 7-year 7-year 7-year
--------------------------------------------------------------
10-year 10-year 10-year 10-year
* At the time you allocate a purchase payment to the DCA Fixed Account Option,
if you do not specify the term length over which the transfers are to take
place, the default transfer period will be 6 months for the 6-month option and
12 months for the 12 month option.
** May be available only in states where the MVA Fixed Account Option is not
offered.
*** Not available in states where the Standard Fixed Account Options are
offered.
75 PROSPECTUS
Appendix B - Market Value Adjustment
- --------------------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the term length of the
Guarantee Period for the week preceding the establishment of the Market
Value Adjusted Fixed Guarantee Period Account;
J = the Treasury Rate for a maturity equal to the term length of the Market
Value Adjusted Fixed Guarantee Period Account for the week preceding
the date amounts are transferred or withdrawn from the Market Value
Adjusted Fixed Guarantee Period Account, the date we determine the
Death Proceeds, or the Payout Start Date, as the case may be ("Market
Value Adjustment Date").
N = the number of whole and partial years from the Market Value Adjustment
Date to the expiration of the term length of the Market Value Adjusted
Fixed Guarantee Period Account.
Treasury Rate means the U.S. Treasury Note Constant Maturity yield as reported
in Federal Reserve Board Statistical Release H.15. If such yields cease to be
available in Federal Reserve Board Statistical Release H.15, then we will use
an alternate source for such information in our discretion.
The Market Value Adjustment factor is determined from the following formula:
.9 X [I-(J + .0025)] X N
To determine the Market Value Adjustment, we will multiply the Market Value
Adjustment factor by the amount transferred, withdrawn, paid as Death Proceeds,
or applied to an Income Plan from a Market Value Adjusted Fixed Guarantee
Period Account at any time other than during the 30 day period after such
Guarantee Period Account expires. NOTE: These examples assume that premium
taxes are not applicable.
Examples Of Market Value Adjustment
Purchase Payment: $10,000 allocated to a Market Value Adjusted
Fixed Guarantee Period Account
Guarantee Period: 5 years
Interest Rate: 4.50%
Full Withdrawal: End of Contract Year 3
Contract: Consultant Solutions Classic*
Example 1: (Assumes Declining Interest Rates)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045)/3/ =
End of Contract Year 3: $11,411.66
Step 2: Calculate the Free Withdrawal = .15 X $10,000 = $1,500
Amount:
Step 3: Calculate the Withdrawal = .06 X ($10,000 - $1,500) = $510
Charge:
Step 4: Calculate the Market Value I = 4.50%
Adjustment:
J = 4.20%
730 DAYS
N = _________ = 2
365 DAYS
Market Value Adjustment Factor: .9 X
[I - (J + .0025)] X N
= .9 X [.045 - (.042 + .0025)] X 2
= .0009
Market Value Adjustment = Market
Value Adjustment Factor X Amount
Subject To Market Value Adjustment:
= .0009 X $11,411.66 = $10.27
Step 5: Calculate the amount received = $11,411.66 - $510 + $10.27 =
by Contract owner as a result of $10,911.93
full withdrawal at the end of
Contract Year 3:
76 PROSPECTUS
Example 2: (Assumes Rising Interest Rates)
Step 1: Calculate Contract Value at = $10,000.00 X (1.045)/3/ =
End of Contract Year 3: $11,411.66
Step 2: Calculate the Free Withdrawal = .15 X $10,000 = $1,500
Amount:
Step 3: Calculate the Withdrawal = .06 X ($10,000 - $1,500) = $510
Charge:
Step 4: Calculate the Market Value I = 4.50%
Adjustment:
J = 4.80%
730 DAYS
N = _________ = 2
365 DAYS
Market Value Adjustment Factor: .9 X
[I - (J + .0025)] X N
= .9 X [(.045 - (.048 + .0025)] X
(2) = -.0099
Market Value Adjustment = Market
Value Adjustment Factor X Amount
Subject To Market Value Adjustment:
= -.0099 X $11,411.66 = -($112.98)
Step 5: Calculate the amount received = $11,411.66 - $510 - $112.98 =
by Contract owner as a result of $10,788.68
full withdrawal at the end of
Contract Year 3:
* These examples assume the election of the Consultant Solutions Classic
Contract for the purpose of illustrating the Market Value Adjustment
calculation. The amounts would be different under Consultant Solutions Plus,
Consultant Solutions Elite Contracts, and Consultant Solutions Select
Contracts which have different expenses and withdrawal charges.
77 PROSPECTUS
Appendix C
Example of Calculation of Income Protection Benefit
- --------------------------------------------------------------------------------
Appendix C illustrates how we calculate the amount guaranteed under the Income
Protection Benefit Option. Please remember that you are looking at an example
only. Please also remember that the Income Protection Benefit Option may only
be added to Income Plans 1 and/or 2, and only to those Income Plans for which
you have selected variable income payments.
To illustrate the calculation of the amount guaranteed under the Income
Protection Benefit Option, we assume the following:
Adjusted age of Annuitant on the Payout Start Date: 65
-----------------------------------------------------------------
Sex of Annuitant: male
-----------------------------------------------------------------
Income Plan selected: 1
-----------------------------------------------------------------
Payment frequency: monthly
-----------------------------------------------------------------
Amount applied to variable income payments under the
Income Plan: $100,000.00
-----------------------------------------------------------------
The example assumes that the withdrawal charge period has expired for all
purchase payments. In accordance with the terms of the Contract, the following
additional assumptions apply:
Assumed investment rate: 3%
- --------------------------------------------------------------------------------------------
Guaranteed minimum variable income payment: 85% of the initial variable amount income value
- --------------------------------------------------------------------------------------------
Step 1 - Calculation of the initial variable amount income value:
Using the assumptions stated above, the initial monthly income payment is $5.49
per $1,000 applied to variable income payments under Income Plan 1. Therefore,
the initial variable amount income value = $100,000 X $5.49/1000 = $549.00.
Step 2 - Calculation of the amount guaranteed under the Income Protection
Benefit Option:
guaranteed minimum variable income payment = 85% X initial variable amount
income value = 85% X $549.00 = $466.65.
Step 3 - Illustration of the effect of the minimum payment guarantee under the
Income Protection Benefit Option:
If in any month your variable income payments would fall below the amount
guaranteed under the Income Protection Benefit Option, your payment for that
month will equal the guaranteed minimum variable income payment. For example,
you would receive $466.65 even if the amount of your monthly income payment
would have been less than that as a result of declining investment experience.
On the other hand, if your monthly income payment is greater than the minimum
guaranteed $466.65, you would receive the greater amount.
78 PROSPECTUS
Appendix D
Withdrawal Adjustment Example - Death Benefits*
- --------------------------------------------------------------------------------
Issue Date: January 1, 2005
Initial Purchase Payment: $50,000 (For Consultant Solutions Plus Contracts,
assume a $2,000 Credit Enhancement would apply assuming issue age 85 or younger
(a $1,000 Credit Enhancement would apply assuming issue age 86-90)).
Death Benefit Amount
------------------------------------------------
Annual
ROP Value Increase Value**
----------------- -----------------
Classic, Classic,
Beginning Contract Elite Maximum Elite
Type of Contract Transaction Value After And Anniversary And
Date Occurrence Value Amount Occurrence Select Plus Value Select Plus
- ------------------------------------------------------------------------------------------------------------------
1/1/06 Contract Anniversary $ 55,000 _ $ 55,000 $ 50,000 $52,000 $ 55,000 $ 52,500 $54,600
- ------------------------------------------------------------------------------------------------------------------
7/1/06 Partial Withdrawal $ 60,000 $ 15,000 $ 45,000 $ 37,500 $39,000 $ 41,250 $ 40,339 $41,953
- ------------------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted death benefits in the example
above. Please note that the withdrawal reduces the Purchase Payment Value, the
Maximum Anniversary Value, and the Enhanced Beneficiary Value by the same
proportion as the withdrawal reduces the Contract Value.
Classic, Elite and Select
- ----------------------------------------------------------------------------------------------------------------------------------
ROP Death Benefit
- ----------------------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- ----------------------------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- ----------------------------------------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (c) $50,000
- ----------------------------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Death Benefit $37,500
- ----------------------------------------------------------------------------------------------------------------------------------
MAV Death Benefit
- ----------------------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- ----------------------------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- ----------------------------------------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (c) $55,000
- ----------------------------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,750
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Death Benefit $41,250
- ----------------------------------------------------------------------------------------------------------------------------------
Annual Increase Death Benefit**
- ----------------------------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000
- ----------------------------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000
- ----------------------------------------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181 days
worth of interest on $52,500 and $54,600, respectively) (c) $53,786
- ----------------------------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $13,446
- ----------------------------------------------------------------------------------------------------------------------------------
Adjusted Death Benefit $40,339
- ----------------------------------------------------------------------------------------------------------------------------------
Plus
- ------------------------------------------------------------------------------------------------
ROP Death Benefit
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal $52,000
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,000
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $39,000
- ------------------------------------------------------------------------------------------------
MAV Death Benefit
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal $55,000
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,750
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $41,250
- ------------------------------------------------------------------------------------------------
Annual Increase Death Benefit**
- ------------------------------------------------------------------------------------------------
Partial Withdrawal Amount $15,000
- ------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal $60,000
- ------------------------------------------------------------------------------------------------
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (assumes 181 days
worth of interest on $52,500 and $54,600, respectively) $55,937
- ------------------------------------------------------------------------------------------------
Withdrawal Adjustment $13,984
- ------------------------------------------------------------------------------------------------
Adjusted Death Benefit $41,953
- ------------------------------------------------------------------------------------------------
* For purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values and Maximum Anniversary
Value for all Contracts, net of applicable fees and charges. Actual death
benefit amounts will differ due to the different fees and charges under each
Contract and the Credit Enhancement available under the Consultant Solutions
Plus Contract. Please remember that you are looking at an example and that
your investment performance may be greater or lower than the figures shown.
**Calculations for the Annual Increase Death Benefit assume that interest
accumulates on a daily basis at a rate equivalent to 5% per year. There may
be certain states in which the Benefit provides for interest that accumulates
at a rate of 3% per year. If calculations assumed an interest rate of 3% per
year, the adjusted death benefit would be lower.
79 PROSPECTUS
Appendix E
Calculation of Enhanced Earnings Death Benefit*
- --------------------------------------------------------------------------------
The following are examples of the Enhanced Earnings Death Benefit Option. For
illustrative purposes, the examples assume Earnings in each case. Please
remember that you are looking at examples and that your investment performance
may be greater or lower than the figures shown.
Example 1: Elected When Contract Was Issued Without Any Subsequent Additions or
Withdrawals
In this example, assume that the oldest Contract Owner is age 55 on the Rider
Application Date and elects the Enhanced Earnings Death Benefit Option when the
Contract is issued. The Contract Owner makes an initial purchase payment of
$100,000. After four years, the Contract Owner dies. On the date Lincoln
Benefit receives a Complete Request for Settlement, the Contract Value is
$125,000. Prior to his death, the Contract Owner did not make any additional
purchase payments or take any withdrawals.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $100,000
($100,000 + $0 - $0)
In-Force Earnings = $25,000
($125,000 - $100,000)
Enhanced Earnings Death Benefit** = 40%*$25,000 = $10,000
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments in the 12 months prior to death), the In-Force Earnings are
used to compute the Enhanced Earnings Death Benefit amount.
* For purposes of illustrating the calculation of Enhanced Earnings Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit
amounts will differ due to the different fees and charges under each Contract
and the Credit Enhancement available under the Consultant Solutions Plus
Contract.
**If the oldest Contract Owner or Co-Annuitant had been over age 70, and both
were age 79 or younger on the Rider Application Date, the Enhanced Earnings
Death Benefit would be 25% of the In-Force Earnings ($6,250.00).
Example 2: Elected When Contract Was Issued With Subsequent Withdrawals
In this example, assume the same facts as above, except that the Contract Owner
has taken a withdrawal of $10,000 during the second year of the Contract.
Immediately prior to the withdrawal, the Contract Value is $105,000. Here,
$5,000 of the withdrawal is in excess of the In-Force Earnings at the time of
the withdrawal. The Contract Value on the date Lincoln Benefit receives a
Complete Request for Settlement will be assumed to be $114,000.
Excess of Earnings Withdrawals = $5,000
($10,000 - $5,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $95,000
($100,000 + $0 - $5,000)
In-Force Earnings = $19,000
($114,000 - $95,000)
Enhanced Earnings Death Benefit** = 40%*$19,000 = $7,600
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments in the 12 months prior to death), the In-Force Earnings are
used to compute the Enhanced Earnings Death Benefit amount.
* For purposes of illustrating the calculation of Enhanced Earnings Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit
amounts will differ due to the different fees and charges under each Contract
and the Credit Enhancement available under the Consultant Solutions Plus
Contract.
**If the oldest Contract Owner or Co-Annuitant had been over age 70, and both
were age 79 or younger on the Rider Application Date, the Enhanced Earnings
Death Benefit would be 25% of the In-Force Earnings ($4,750.00).
Example 3: Elected After Contract Was Issued With Subsequent Additions and
Withdrawals
This example is intended to illustrate the effect of adding the Enhanced
Earnings Death Benefit Option after the Contract has been issued and the effect
of later purchase payments. In this example, assume there is no Co-Annuitant
and that the oldest Contract Owner is age 72 on the Rider Application Date. At
the time the Contract is issued, the Contract Owner makes a purchase payment of
$100,000. After two years pass, the Contract Owner elects to add the Enhanced
Earnings Death Benefit Option. On the date this Rider is added, the Contract
Value is $110,000. Two years
80 PROSPECTUS
later, the Contract Owner withdraws $50,000. Immediately prior to the
withdrawal, the Contract Value is $130,000. Another two years later, the
Contract Owner makes an additional purchase payment of $40,000. Immediately
after the additional purchase payment, the Contract Value is $130,000. Two
years later, the Contract Owner dies with a Contract Value of $140,000 on the
date Lincoln Benefit receives a Complete Request for Settlement.
Excess of Earnings Withdrawals = $30,000
($50,000 - $20,000)
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $120,000
($110,000 + $40,000 - $30,000)
In-Force Earnings = $20,000
($140,000 - $120,000)
Enhanced Earnings Death Benefit** = 25%*$20,000 = $5,000
In this example, In-Force Premium is equal to the Contract Value on Rider
Application Date plus the additional purchase payment and minus the
Excess-of-Earnings Withdrawal.
Since In-Force Earnings are less than 50% of the In-Force Premium (excluding
purchase payments in the 12 months prior to death), the In-Force Earnings are
used to compute the Enhanced Earnings Death Benefit amount.
* For purposes of illustrating the calculation of Enhanced Earnings Death
Benefit Option, the example assumes the same hypothetical Contract Values for
all Contracts, net of applicable fees and charges. Actual death benefit
amounts will differ due to the different fees and charges under each Contract
and the Credit Enhancement available under the Consultant Solutions Plus
Contract.
**If the oldest Contract Owner had been age 70 or younger on the Rider
Application Date, the Enhanced Earnings Death Benefit would be 40% of the
In-Force Earnings ($8,000.00).
Example 4: Spousal Continuation:
This example is intended to illustrate the effect of a surviving spouse
electing to continue the Contract upon the death of the Contract Owner on a
Contract with the Enhanced Earnings Death Benefit Option and MAV Death Benefit
Option. In this example, assume that there is no Co-Annuitant and that the
oldest Contract Owner is age 60 at the time the Contract is purchased (with the
Enhanced Earnings Death Benefit Option but without any other option) with a
$100,000 purchase payment. Five years later the Contract Owner dies and the
surviving spouse elects to continue the Contract. The Contract Value and
Maximum Anniversary Value at this time are $150,000 and $160,000, respectively.
Excess of Earnings Withdrawals = $0
Purchase Payments in the 12 months prior to death = $0
In-Force Premium = $100,000
($100,000 + $0 - $0)
In-Force Earnings = $50,000
($150,000 - $100,000)
Enhanced Earnings Death Benefit** = 40%*$50,000 = $20,000
Contract Value = $150,000
Death Benefit = $160,000
Enhanced Earnings Death Benefit = $20,000
Continuing Contract Value = $180,000
($160,000 + $20,000)
Since In-Force Earnings are less than 100% of the In-Force Premium (excluding
purchase payments in the 12 months prior to death), the In-Force Earnings are
used to compute the Enhanced Earnings Death Benefit amount.
Assume the surviving spouse is age 72 when the Contract is continued. At this
time, the surviving spouse has the option to continue the Enhanced Earnings
Death Benefit Option at an additional mortality and expense risk charge of
0.40% and with an In-Force Premium amount equal to the Contract Value and the
Rider Date reset to the date the Contract is continued. If this selection is
made, the Enhanced Earnings Death Benefit will be equal to the lesser of 25% of
the In-Force Earnings and 50% of In-Force Premium. Otherwise, the surviving
spouse may elect to terminate the Enhanced Earnings Death Benefit Option at the
time of continuation.
* For purposes of illustrating the calculation of Enhanced Earnings Death
Benefit Option, the example assumes the same hypothetical Contract Values and
Maximum Anniversary Values for all Contracts, net of applicable fees and
charges. Actual death benefit amounts will differ due to the different fees
and charges under each Contract and the Credit Enhancement available under
the Consultant Solutions Plus Contract.
**If the oldest Contract Owner had been over age 70 , and both were age 79 or
younger on the Rider Application Date, the Enhanced Earnings Death Benefit
would be 25% of the In-Force Earnings ($12,500.00).
81 PROSPECTUS
Appendix F
Withdrawal Adjustment Example - Accumulation Benefit*
- --------------------------------------------------------------------------------
Rider Date: January 1, 2007
Initial Purchase Payment: $50,000 (For Consultant Solutions Plus Contracts,
assume a $2,000 Credit Enhancement would apply assuming issue age 85 or younger
(a $1,000 Credit Enhancement would apply assuming issue age 86-90))
Initial Benefit Base: $50,000 for Consultant Solutions Classic, Elite and
Select Contracts, $52,000 for Consultant Solutions Plus Contracts (assuming
issue age 85 or younger)
Benefit Base
-----------------------
Beginning Transaction Contract Value Classic, Elite
Date Type of Occurrence Contract Value Amount After Occurrence and Select Plus
- ------------------------------------------------------------------------------------------------------
1/1/2008 Contract Anniversary $ 55,000 _ $ 55,000 $ 50,000 $52,000
- ------------------------------------------------------------------------------------------------------
7/1/2008 Partial Withdrawal $ 60,000 $ 15,000 $ 45,000 $ 37,500 $39,000
- ------------------------------------------------------------------------------------------------------
The following shows how we compute the adjusted Benefit Bases in the example
above. Please note the withdrawal reduces the Benefit Base by the same
proportion as the withdrawal reduces the Contract Value.
Classic, Elite and Select Plus
- ---------------------------------------------------------------------------------------------------------------
Benefit Base
- ---------------------------------------------------------------------------------------------------------------
Partial Withdrawal Amount (a) $15,000 $15,000
- ---------------------------------------------------------------------------------------------------------------
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
- ---------------------------------------------------------------------------------------------------------------
Value of Benefit Base Immediately Prior to Partial Withdrawal (c) $50,000 $52,000
- ---------------------------------------------------------------------------------------------------------------
Withdrawal Adjustment [(a)/(b)]*(c) $12,500 $13,000
- ---------------------------------------------------------------------------------------------------------------
Adjusted Benefit Base $37,500 $39,000
- ---------------------------------------------------------------------------------------------------------------
* For the purpose of illustrating the withdrawal adjustment calculation, the
example assumes the same hypothetical Contract Values, net of applicable fees
and charges. Actual Contract Values will differ due to the different fees and
charges under each Contract and the Credit Enhancement available under
Consultant Solutions Plus Contracts. Please remember that you are looking at
an example and that your investment performance may be greater or lower than
the figures shown.
82 PROSPECTUS
Appendix G - SureIncome Withdrawal Benefit Option Calculation Examples
- --------------------------------------------------------------------------------
Example 1: Assume you purchase a Consultant Solutions contract with a $100,000
initial purchase payment and add the SureIncome Option at issue.
Your Benefit Base is $100,000, which is your initial purchase payment of
$100,000.
Your Benefit Payment is $8,000, which is 8% of your initial purchase payment.
Your Benefit Payment Remaining for this Benefit Year is $8,000, which is equal
to your Benefit Payment at the beginning of this Benefit Year.
Example 2: Assume Example 1 is continued and an additional purchase payment of
$40,000 is made in the first Benefit Year.
The Benefit Base is increased to $140,000, which is your prior Benefit Base
($100,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $11,200, which is your prior Benefit
Payment ($8,000) plus 8% of your additional purchase payment ($40,000).
The Benefit Payment Remaining is increased to $11,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($8,000) plus 8% of
your additional purchase payment ($40,000).
Example 3: Assume Example 1 is continued and a withdrawal of $8,000 is made
during the first Benefit Year.
The Benefit Base is reduced to $92,000, which is your prior Benefit Base
($100,000) less your withdrawal ($8,000).
The Benefit Payment is unchanged and remains $8,000.
The Benefit Payment Remaining in the first Benefit Year is $0, which is your
Benefit Payment Remaining prior to your withdrawal ($8,000) less your
withdrawal ($8,000).
Example 4: Assume example 1 is continued and a withdrawal of $25,000 is made
during the first Benefit Year. Assume the Contract Value prior to the
withdrawal was $130,000. Because the $25,000 withdrawal is larger than the
Benefit Payment Remaining, the Benefit Base and Benefit Payment will be
recalculated according to applicable formulas.
The Benefit Base is reduced to $75,000, determined by the following
calculation: the lesser of ($130,000 - $25,000) and ($100,000 - $25,000) =
$75,000.
The Benefit Payment remains $8,000, determined by the following calculation:
the lesser of ($8,000) and (8% x ($130,000 - $25,000)) = $8,000.
There is no Benefit Payment Remaining because the withdrawal has reduced it to
$0.
Example 5: Assume example 3 is continued and an additional withdrawal of $5,000
is taken in the same year (the first Benefit Year). Assume the Contract Value
prior to the additional withdrawal was $60,000. Because the $5,000 withdrawal
is larger than the Benefit Payment Remaining ($0), the Benefit Base and Benefit
Payment will be recalculated according to applicable formulas.
The Benefit Base is reduced to $55,000, determined by the following
calculation: the lesser of ($60,000 - $5,000) and ($92,000 - $5,000) = $55,000.
The Benefit Payment is reduced to $4,400, determined by the following formula:
the lesser of ($8,000) and ((8% x ($60,000 - $5,000)) = $4,400.
The Benefit Payment Remaining is unchanged at $0.
Example 6: Assume example 5 is continued and an additional Purchase Payment of
$40,000 is made in the same year (the first Benefit Year).
The Benefit Base is increased to $95,000, which is your prior Benefit Base
($55,000) plus your additional purchase payment ($40,000).
The Benefit Payment is increased to $7,600, which is your prior Benefit Payment
($4,400) plus 8% of your additional purchase payment ($40,000).
83 PROSPECTUS
The Benefit Payment Remaining is increased to $3,200, which is your Benefit
Payment Remaining prior to your additional purchase payment ($0) plus 8% of
your additional purchase payment ($40,000).
Example 7: Assume example 6 is continued and an additional withdrawal of $3,200
is taken in the same year (the first Benefit Year).
The Benefit Base is reduced to $91,800, which is your prior Benefit Base
($95,000) less your withdrawal ($3,200).
The Benefit Payment is unchanged and remains $7,600.
The Benefit Payment Remaining is reduced to $0, which is your Benefit Payment
Remaining prior to your withdrawal ($3,200) less your withdrawal ($3,200).
84 PROSPECTUS
Appendix H - Accumulation Unit Values
- --------------------------------------------------------------------------------
Appendix H presents the Accumulation Unit Values and number of Accumulation
Units outstanding for each Variable Sub-Account since the Variable Sub-Accounts
were first offered under the Contracts. This Appendix includes Accumulation
Unit Values representing the highest and lowest available combinations of
Contract charges that affect Accumulation Unit Values for each Contract. The
Statement of Additional Information, which is available upon request without
charge, contains the Accumulation Unit Values for all other available
combinations of Contract charges that affect Accumulation Unit values for each
Contract. Please contract us at 800-457-7617 to obtain a copy of the Statement
of Additional Information.
The name of the following Sub-Accounts changed since December 31, 2008. The
name shown in the tables of Accumulation Units correspond to the name of the
Sub-Accounts as of December 31, 2007:
Sub-Account Name as of December 31,
2008
(as appears in the following tables of Accumulation Unit Values) Sub-Account Name as of May 1, 2009
- -------------------------------------------------------------------------------------------------------
Janus Aspen Series International Janus Aspen Series Overseas Portfolio
Growth Portfolio - Service Shares - Service Shares
Rydex VT Sector Rotation Fund Rydex VT All-Cap Opportunity Fund
Van Eck Worldwide Absolute Return Fund Van Eck Worldwide Multi-Manager
Alternatives Fund
- -------------------------------------------------------------------------------------------------------
On April 24, 2009, the Premier VIT OpCap Balanced Portfolio liquidated and the
Sub-Account is no longer available for investment. However, accumulation unit
values for the Sub-Account are included in the tables below because the
Sub-Account was available as of December 31, 2008.
On April 30, 2009, the Janus Aspen Series Perkins Small Company Value Portfolio
liquidated and the Sub-Account is no longer available for investment. However,
accumulation unit values for the Sub-Account are included in the tables below
because the Sub-Account was available as of December 31, 2008.
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.745 132,216
2005 $10.745 $11.176 223,522
2006 $11.176 $12.452 287,925
2007 $12.452 $12.451 280,725
2008 $12.451 $5.907 303,579
- -------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.303 25,665
2005 $10.303 $11.036 50,990
2006 $11.036 $11.547 61,199
2007 $11.547 $12.727 56,382
2008 $12.727 $7.203 52,348
- -------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.800 173,314
2007 $10.800 $11.493 185,437
2008 $11.493 $7.900 185,880
- -------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.989 110,892
2005 $10.989 $11.629 253,522
2006 $11.629 $12.732 405,969
2007 $12.732 $13.725 387,292
2008 $13.725 $9.656 323,756
85 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.103 121,781
2005 $10.103 $11.134 212,340
2006 $11.134 $11.523 222,959
2007 $11.523 $13.598 210,459
2008 $13.598 $7.204 237,432
- ---------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.219 23,051
2005 $10.219 $11.509 74,712
2006 $11.509 $13.506 132,966
2007 $13.506 $17.746 141,537
2008 $17.746 $9.582 106,723
- ---------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.628 94,790
2005 $10.628 $11.485 210,380
2006 $11.485 $12.450 308,342
2007 $12.450 $16.122 291,878
2008 $16.122 $6.605 291,655
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.217 56,932
2005 $10.217 $10.460 111,219
2006 $10.460 $11.056 134,814
2007 $11.056 $12.561 148,955
2008 $12.561 $8.809 146,295
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.389 105,161
2005 $11.389 $13.106 523,173
2006 $13.106 $14.408 891,858
2007 $14.408 $16.672 862,174
2008 $16.672 $9.425 782,708
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.840 248,175
2005 $10.840 $11.290 457,976
2006 $11.290 $13.358 699,045
2007 $13.358 $13.344 675,449
2008 $13.344 $7.528 651,012
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.809 193,118
2005 $9.809 $10.209 307,319
2006 $10.209 $10.734 362,183
2007 $10.734 $13.411 341,543
2008 $13.411 $6.971 316,734
86 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.668 306,038
2005 $10.668 $11.004 812,899
2006 $11.004 $12.532 1,175,182
2007 $12.532 $13.002 1,100,162
2008 $13.002 $8.060 1,084,831
- -----------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.215 172,370
2005 $10.215 $10.269 496,639
2006 $10.269 $10.549 806,750
2007 $10.549 $10.831 811,904
2008 $10.831 $10.315 588,837
- -----------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.965 319,746
2005 $9.965 $10.104 913,007
2006 $10.104 $10.429 1,383,659
2007 $10.429 $10.797 1,358,656
2008 $10.797 $10.946 1,573,766
- -----------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.931 72,197
2005 $10.931 $12.810 311,381
2006 $12.810 $14.883 762,307
2007 $14.883 $17.185 776,150
2008 $17.185 $9.500 781,458
- -----------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.625 54,585
2005 $10.625 $11.285 153,996
2006 $11.285 $12.292 242,446
2007 $12.292 $13.373 234,531
2008 $13.373 $11.074 193,608
- -----------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.317 32,940
2005 $11.317 $11.861 115,107
2006 $11.861 $13.814 165,929
2007 $13.814 $16.114 179,041
2008 $16.114 $15.166 0
- -----------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.491 14,808
2005 $11.491 $12.759 76,819
2006 $12.759 $13.735 168,017
2007 $13.735 $18.512 143,770
2008 $18.512 $10.170 144,900
87 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.303 68,978
2005 $11.303 $12.266 356,713
2006 $12.266 $13.924 564,227
2007 $13.924 $14.720 539,843
2008 $14.720 $10.470 471,189
- -----------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--Service Shares
2004 $10.000 $11.339 39,658
2005 $11.339 $12.407 125,616
2006 $12.407 $13.558 164,908
2007 $13.558 $14.194 134,550
2008 $14.194 $8.928 125,288
- -----------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.974 77,386
2006 $10.974 $13.193 178,295
2007 $13.193 $12.219 196,175
2008 $12.219 $7.724 180,098
- -----------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.509 48,073
2008 $9.509 $5.949 43,169
- -----------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--Class II
2004 $10.000 $10.871 168,236
2005 $10.871 $11.105 465,661
2006 $11.105 $12.089 703,308
2007 $12.089 $11.885 698,823
2008 $11.885 $8.104 589,498
- -----------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.749 96,362
2008 $9.749 $6.191 93,685
- -----------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.652 105,366
2005 $10.652 $10.724 209,209
2006 $10.724 $11.637 238,258
2007 $11.637 $11.655 216,819
2008 $11.655 $8.202 178,367
- -----------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.471 19,040
2005 $10.471 $10.767 229,340
2006 $10.767 $11.398 467,604
2007 $11.398 $12.483 434,299
2008 $12.483 $7.760 408,811
- -----------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.810 9,814
2005 $10.810 $11.413 32,676
2006 $11.413 $12.689 38,786
2007 $12.689 $13.772 40,966
2008 $13.772 $9.068 32,809
88 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.945 40,927
2005 $9.945 $10.304 92,908
2006 $10.304 $11.480 113,307
2007 $11.480 $11.579 100,633
2008 $11.579 $6.908 87,061
- ----------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.783 128,035
2005 $10.783 $10.914 326,074
2006 $10.914 $12.019 375,040
2007 $12.019 $12.323 335,392
2008 $12.323 $9.443 283,876
- ----------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.175 45,846
2005 $11.175 $11.737 129,930
2006 $11.737 $13.954 194,233
2007 $13.954 $14.810 188,327
2008 $14.810 $9.826 163,225
- ----------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.723 26,917
2006 $11.723 $11.877 87,641
2007 $11.877 $12.423 90,045
2008 $12.423 $6.224 86,645
- ----------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.390 123,098
2005 $11.390 $12.817 340,222
2006 $12.817 $14.840 463,678
2007 $14.840 $15.529 425,468
2008 $15.529 $9.141 339,967
- ----------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.324 138,676
2005 $11.324 $12.256 457,975
2006 $12.256 $13.864 760,414
2007 $13.864 $13.485 690,006
2008 $13.485 $8.247 595,786
- ----------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.382 75,187
2005 $10.382 $10.769 276,055
2006 $10.769 $10.857 508,415
2007 $10.857 $11.099 482,258
2008 $11.099 $10.688 356,974
89 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.959 167,490
2005 $9.959 $10.096 325,748
2006 $10.096 $10.420 459,580
2007 $10.420 $10.781 401,905
2008 $10.781 $10.875 447,414
- ----------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.596 206,384
2005 $10.596 $10.671 648,012
2006 $10.671 $10.602 937,569
2007 $10.602 $11.576 902,299
2008 $11.576 $10.615 928,688
- ----------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.283 249,949
2005 $10.283 $10.392 653,328
2006 $10.392 $10.647 1,083,265
2007 $10.647 $11.424 1,062,806
2008 $11.424 $11.812 823,099
- ----------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.805 38,773
2005 $10.805 $10.951 61,072
2006 $10.951 $11.970 86,922
2007 $11.970 $11.284 76,705
2008 $11.284 $7.661 66,388
- ----------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.229 121,721
2005 $11.229 $10.576 203,935
2006 $10.576 $11.620 218,567
2007 $11.620 $12.187 170,119
2008 $12.187 $11.013 0
- ----------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.599 15,602
2005 $10.599 $11.890 56,294
2006 $11.890 $13.065 91,432
2007 $13.065 $15.819 78,479
2008 $15.819 $9.249 92,524
- ----------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.490 74,071
2005 $10.490 $10.932 438,125
2006 $10.932 $11.791 846,349
2007 $11.791 $13.084 814,281
2008 $13.084 $7.402 830,392
90 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $11.106 299,734
2005 $11.106 $11.361 948,390
2006 $11.361 $13.299 1,402,991
2007 $13.299 $13.516 1,333,577
2008 $13.516 $8.498 1,156,148
- ----------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.917 33,863
2005 $9.917 $9.804 58,131
2006 $9.804 $10.509 63,097
2007 $10.509 $10.787 68,791
2008 $10.787 $9.247 106,076
- ----------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $12.106 13,596
2005 $12.106 $15.764 76,101
2006 $15.764 $21.694 140,010
2007 $21.694 $29.449 151,951
2008 $29.449 $10.231 88,994
- ----------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.455 25,156
2005 $12.455 $18.637 98,493
2006 $18.637 $22.889 151,158
2007 $22.889 $32.819 197,678
2008 $32.819 $17.442 80,392
- ----------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $11.112 25,709
2005 $11.112 $12.180 47,131
2006 $12.180 $12.608 54,285
2007 $12.608 $14.626 48,758
2008 $14.626 $7.671 44,989
- ----------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.187 63,788
2005 $10.187 $10.379 164,577
2006 $10.379 $10.558 182,914
2007 $10.558 $11.145 211,170
2008 $11.145 $11.161 357,895
- ----------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $11.083 135,175
2005 $11.083 $11.996 493,860
2006 $11.996 $13.725 824,335
2007 $13.725 $13.881 783,069
2008 $13.881 $9.283 680,370
91 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.25
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.383 14,496
2005 $10.383 $11.829 58,864
2006 $11.829 $12.114 88,585
2007 $12.114 $14.539 86,678
2008 $14.539 $7.265 87,977
- ----------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.853 241,544
2005 $12.853 $14.804 448,864
2006 $14.804 $20.106 695,926
2007 $20.106 $16.407 515,759
2008 $16.407 $10.026 445,861
- ----------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $7.074 105,650
* The LBL Consultant Solutions Classic Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
92 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.656 0
2005 $10.656 $10.982 0
2006 $10.982 $12.125 0
2007 $12.125 $12.013 0
2008 $12.013 $5.647 1,098
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.217 0
2005 $10.217 $10.845 0
2006 $10.845 $11.244 0
2007 $11.244 $12.279 0
2008 $12.279 $6.886 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.734 0
2007 $10.734 $11.317 0
2008 $11.317 $7.708 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.897 0
2005 $10.897 $11.427 0
2006 $11.427 $12.398 0
2007 $12.398 $13.242 0
2008 $13.242 $9.231 1,270
- ----------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.019 0
2005 $10.019 $10.942 0
2006 $10.942 $11.220 0
2007 $11.220 $13.120 0
2008 $13.120 $6.887 0
- ----------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.134 0
2005 $10.134 $11.309 0
2006 $11.309 $13.152 0
2007 $13.152 $17.121 0
2008 $17.121 $9.160 0
- ----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.539 0
2005 $10.539 $11.286 0
2006 $11.286 $12.123 0
2007 $12.123 $15.555 0
2008 $15.555 $6.314 18,946
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.132 0
2005 $10.132 $10.279 0
2006 $10.279 $10.765 0
2007 $10.765 $12.119 0
2008 $12.119 $8.421 109
93 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.295 0
2005 $11.295 $12.880 303
2006 $12.880 $14.030 292
2007 $14.030 $16.085 280
2008 $16.085 $9.010 1,763
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.750 0
2005 $10.750 $11.095 0
2006 $11.095 $13.007 0
2007 $13.007 $12.875 0
2008 $12.875 $7.197 8,417
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.727 0
2005 $9.727 $10.032 0
2006 $10.032 $10.452 0
2007 $10.452 $12.939 0
2008 $12.939 $6.664 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.579 0
2005 $10.579 $10.813 0
2006 $10.813 $12.202 0
2007 $12.202 $12.544 0
2008 $12.544 $7.705 1,127
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.130 0
2005 $10.130 $10.091 0
2006 $10.091 $10.272 0
2007 $10.272 $10.450 0
2008 $10.450 $9.861 2,057
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.882 0
2005 $9.882 $9.929 0
2006 $9.929 $10.155 0
2007 $10.155 $10.417 0
2008 $10.417 $10.465 3,763
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.840 0
2005 $10.840 $12.588 0
2006 $12.588 $14.492 0
2007 $14.492 $16.580 0
2008 $16.580 $9.082 1,097
94 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.537 0
2005 $10.537 $11.089 0
2006 $11.089 $11.970 0
2007 $11.970 $12.902 0
2008 $12.902 $10.586 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.223 0
2005 $11.223 $11.655 0
2006 $11.655 $13.452 0
2007 $13.452 $15.547 0
2008 $15.547 $14.589 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.395 0
2005 $11.395 $12.539 0
2006 $12.539 $13.375 0
2007 $13.375 $17.861 0
2008 $17.861 $9.723 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.209 0
2005 $11.209 $12.053 577
2006 $12.053 $13.558 565
2007 $13.558 $14.202 531
2008 $14.202 $10.009 547
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.245 0
2005 $11.245 $12.192 0
2006 $12.192 $13.202 0
2007 $13.202 $13.695 0
2008 $13.695 $8.535 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.906 0
2006 $10.906 $12.993 0
2007 $12.993 $11.923 0
2008 $11.923 $7.468 0
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.450 0
2008 $9.450 $5.858 2,596
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.781 0
2005 $10.781 $10.912 322
2006 $10.912 $11.771 310
2007 $11.771 $11.467 298
2008 $11.467 $7.747 1,488
95 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.688 0
2008 $9.688 $6.096 0
- ------------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.563 0
2005 $10.563 $10.538 0
2006 $10.538 $11.331 0
2007 $11.331 $11.245 0
2008 $11.245 $7.842 3,928
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.384 0
2005 $10.384 $10.580 0
2006 $10.580 $11.098 0
2007 $12.125 $12.013 0
2008 $12.013 $7.419 155
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.720 0
2005 $10.720 $11.215 0
2006 $11.215 $12.355 0
2007 $11.098 $12.043 0
2008 $12.043 $8.669 923
- ------------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.862 0
2005 $9.862 $10.126 0
2006 $10.126 $11.178 0
2007 $11.178 $11.171 0
2008 $11.171 $6.604 1,098
- ------------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.694 0
2005 $10.694 $10.725 326
2006 $10.725 $11.703 314
2007 $11.703 $11.889 301
2008 $11.889 $9.027 2,083
- ------------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.082 0
2005 $11.082 $11.534 0
2006 $11.534 $13.587 0
2007 $13.587 $14.288 0
2008 $14.288 $9.393 858
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.651 0
2006 $11.651 $11.697 0
2007 $11.697 $12.123 0
2008 $12.123 $6.018 0
96 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.296 0
2005 $11.296 $12.595 0
2006 $12.595 $14.450 0
2007 $14.450 $14.982 0
2008 $14.982 $8.738 18,728
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.230 0
2005 $11.230 $12.044 0
2006 $12.044 $13.500 0
2007 $13.500 $13.011 0
2008 $13.011 $7.884 2,247
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.296 0
2005 $10.296 $10.583 511
2006 $10.583 $10.572 574
2007 $10.572 $10.708 546
2008 $10.708 $10.218 4,709
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.876 0
2005 $9.876 $9.922 602
2006 $9.922 $10.147 635
2007 $10.147 $10.401 596
2008 $10.401 $10.396 3,790
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.508 0
2005 $10.508 $10.487 495
2006 $10.487 $10.324 477
2007 $10.324 $11.168 458
2008 $11.168 $10.148 918
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.197 0
2005 $10.197 $10.212 0
2006 $10.212 $10.368 0
2007 $10.368 $11.022 0
2008 $11.022 $11.293 6,237
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.739 0
2005 $10.739 $10.785 0
2006 $10.785 $11.682 0
2007 $11.682 $10.911 0
2008 $10.911 $7.340 0
97 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.136 0
2005 $11.136 $10.393 0
2006 $10.393 $11.315 0
2007 $11.315 $11.758 0
2008 $11.758 $10.620 0
- ------------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.511 0
2005 $10.511 $11.684 0
2006 $11.684 $12.722 0
2007 $12.722 $15.263 0
2008 $15.263 $8.841 804
- ------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.403 0
2005 $10.403 $10.743 348
2006 $10.743 $11.481 335
2007 $11.481 $12.623 321
2008 $12.623 $7.076 2,407
- ------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $11.014 0
2005 $11.014 $11.165 764
2006 $11.165 $12.949 737
2007 $12.949 $13.040 706
2008 $13.040 $8.124 18,755
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.835 0
2005 $9.835 $9.634 0
2006 $9.634 $10.233 0
2007 $10.233 $10.407 0
2008 $10.407 $8.840 1,179
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $12.005 0
2005 $12.005 $15.491 135
2006 $15.491 $21.124 130
2007 $21.124 $28.413 124
2008 $28.413 $9.781 119
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.352 0
2005 $12.352 $18.314 0
2006 $18.314 $22.288 0
2007 $22.288 $31.665 0
2008 $31.665 $16.674 818
98 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Classic
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.15
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $11.019 0
2005 $11.019 $11.969 0
2006 $11.969 $12.277 0
2007 $12.277 $14.111 0
2008 $14.111 $7.333 0
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.103 0
2005 $10.103 $10.200 0
2006 $10.200 $10.281 0
2007 $10.281 $10.753 0
2008 $10.753 $10.670 267
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $10.991 0
2005 $10.991 $11.789 0
2006 $11.789 $13.365 0
2007 $13.365 $13.392 0
2008 $13.392 $8.874 6,338
- --------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.297 0
2005 $10.297 $11.624 0
2006 $11.624 $11.796 0
2007 $11.796 $14.027 0
2008 $14.027 $6.945 336
- --------------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.746 0
2005 $12.746 $14.547 654
2006 $14.547 $19.578 582
2007 $19.578 $15.830 630
2008 $15.830 $9.584 29,447
- --------------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.762 0
* The LBL Consultant Solutions Classic Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
99 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.710 14,119
2005 $10.710 $11.100 26,910
2006 $11.100 $12.324 26,039
2007 $12.324 $12.279 15,073
2008 $12.279 $5.805 4,867
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.270 209
2005 $10.270 $10.962 648
2006 $10.962 $11.429 1,382
2007 $11.429 $12.551 1,120
2008 $12.551 $7.078 840
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.774 15,396
2007 $10.774 $11.424 18,197
2008 $11.424 $7.825 13,767
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.953 3,434
2005 $10.953 $11.550 9,987
2006 $11.550 $12.601 25,207
2007 $12.601 $13.536 25,250
2008 $13.536 $9.489 10,026
- ---------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.070 3,205
2005 $10.070 $11.059 4,438
2006 $11.059 $11.405 4,747
2007 $11.405 $13.411 3,856
2008 $13.411 $7.079 4,663
- ---------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.186 4,734
2005 $10.186 $11.431 5,217
2006 $11.431 $13.368 10,380
2007 $13.368 $17.501 11,158
2008 $17.501 $9.416 23,230
- ---------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.593 16,990
2005 $10.593 $11.407 22,184
2006 $11.407 $12.323 32,839
2007 $12.323 $15.900 22,247
2008 $15.900 $6.490 21,572
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.184 6,127
2005 $10.184 $10.390 16,830
2006 $10.390 $10.942 20,152
2007 $10.942 $12.387 18,915
2008 $12.387 $8.657 20,457
100 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.353 13,482
2005 $11.353 $13.018 50,412
2006 $13.018 $14.260 98,161
2007 $14.260 $16.442 98,587
2008 $16.442 $9.262 69,273
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.805 16,904
2005 $10.805 $11.214 25,309
2006 $11.214 $13.221 52,728
2007 $13.221 $13.160 47,153
2008 $13.160 $7.398 28,570
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.777 2,742
2005 $9.777 $10.140 6,853
2006 $10.140 $10.623 8,255
2007 $10.623 $13.226 7,221
2008 $13.226 $6.850 5,106
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.634 7,868
2005 $10.634 $10.930 38,047
2006 $10.930 $12.403 65,217
2007 $12.403 $12.823 59,035
2008 $12.823 $7.921 48,787
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.182 21,758
2005 $10.182 $10.199 49,266
2006 $10.199 $10.441 73,225
2007 $10.441 $10.682 66,985
2008 $10.682 $10.137 32,315
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.933 58,803
2005 $9.933 $10.036 68,484
2006 $10.036 $10.322 161,389
2007 $10.322 $10.648 125,834
2008 $10.648 $10.757 157,527
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.896 3,480
2005 $10.896 $12.723 16,347
2006 $12.723 $14.730 67,797
2007 $14.730 $16.948 84,726
2008 $16.948 $9.336 62,637
101 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.591 20,549
2005 $10.591 $11.209 24,673
2006 $11.209 $12.166 20,866
2007 $12.166 $13.188 19,377
2008 $13.188 $10.882 23,268
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.280 282
2005 $11.280 $11.781 1,583
2006 $11.781 $13.672 5,830
2007 $13.672 $15.892 7,627
2008 $15.892 $14.940 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.454 16
2005 $11.454 $12.673 5,639
2006 $12.673 $13.594 14,144
2007 $13.594 $18.257 18,465
2008 $18.257 $9.994 10,342
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.266 12,402
2005 $11.266 $12.183 48,976
2006 $12.183 $13.781 59,842
2007 $13.781 $14.517 53,518
2008 $14.517 $10.289 34,104
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.302 9,724
2005 $11.302 $12.323 16,649
2006 $12.323 $13.419 21,808
2007 $13.419 $13.998 20,140
2008 $13.998 $8.773 14,493
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.947 17,047
2006 $10.947 $13.116 20,417
2007 $13.116 $12.103 23,686
2008 $12.103 $7.624 18,835
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.486 4,256
2008 $9.486 $5.914 1,123
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.836 18,080
2005 $10.836 $11.030 43,334
2006 $11.030 $11.964 67,099
2007 $11.964 $11.721 64,359
2008 $11.721 $7.963 43,788
102 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.725 16,715
2008 $9.725 $6.154 14,358
- ------------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.617 5,239
2005 $10.617 $10.651 8,859
2006 $10.651 $11.517 9,006
2007 $11.517 $11.495 8,010
2008 $11.495 $8.061 5,959
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.437 0
2005 $10.437 $10.694 20,459
2006 $10.694 $11.281 40,226
2007 $11.281 $12.310 35,303
2008 $12.310 $7.626 25,945
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.775 1,497
2005 $10.775 $11.336 2,187
2006 $11.336 $12.558 2,311
2007 $12.558 $13.582 2,327
2008 $13.582 $8.911 2,892
- ------------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.912 0
2005 $9.912 $10.235 1,241
2006 $10.235 $11.362 2,619
2007 $11.362 $11.419 2,212
2008 $11.419 $6.789 512
- ------------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.748 24,820
2005 $10.748 $10.841 43,498
2006 $10.841 $11.896 48,499
2007 $11.896 $12.153 36,646
2008 $12.153 $9.279 30,804
- ------------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.139 1,555
2005 $11.139 $11.658 7,507
2006 $11.658 $13.810 10,015
2007 $13.810 $14.605 11,214
2008 $14.605 $9.656 15,987
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.695 2,405
2006 $11.695 $11.807 10,770
2007 $11.807 $12.306 10,772
2008 $12.306 $6.143 10,137
103 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.354 12,335
2005 $11.354 $12.730 23,494
2006 $12.730 $14.688 32,798
2007 $14.688 $15.315 24,924
2008 $15.315 $8.982 23,059
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.287 4,631
2005 $11.287 $12.174 27,646
2006 $12.174 $13.721 40,614
2007 $13.721 $13.299 39,454
2008 $13.299 $8.105 24,375
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.348 4,619
2005 $10.348 $10.696 28,950
2006 $10.696 $10.745 45,056
2007 $10.745 $10.946 43,735
2008 $10.946 $10.503 23,896
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.927 4,061
2005 $9.927 $10.028 17,626
2006 $10.028 $10.313 110,294
2007 $10.313 $10.632 72,629
2008 $10.632 $10.687 73,225
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.562 24,840
2005 $10.562 $10.599 77,486
2006 $10.599 $10.493 72,477
2007 $10.493 $11.416 60,196
2008 $11.416 $10.432 34,791
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.250 19,456
2005 $10.250 $10.322 47,858
2006 $10.322 $10.538 83,160
2007 $10.538 $11.266 81,848
2008 $11.266 $11.608 60,359
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.779 3,706
2005 $10.779 $10.887 5,953
2006 $10.887 $11.858 5,951
2007 $11.858 $11.138 5,481
2008 $11.138 $7.535 3,960
104 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.193 12,083
2005 $11.193 $10.505 19,478
2006 $10.505 $11.501 22,405
2007 $11.501 $12.019 16,051
2008 $12.019 $10.859 0
- ---------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.565 310
2005 $10.565 $11.810 295
2006 $11.810 $12.931 8,282
2007 $12.931 $15.601 6,921
2008 $15.601 $9.088 5,207
- ---------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.456 6,385
2005 $10.456 $10.858 40,786
2006 $10.858 $11.670 75,772
2007 $11.670 $12.903 81,626
2008 $12.903 $7.274 62,701
- ---------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $11.070 26,985
2005 $11.070 $11.285 92,669
2006 $11.285 $13.162 137,043
2007 $13.162 $13.329 129,012
2008 $13.329 $8.351 99,308
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.885 0
2005 $9.885 $9.738 1,220
2006 $9.738 $10.401 1,929
2007 $10.401 $10.638 1,607
2008 $10.638 $9.087 2,544
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $12.067 1,588
2005 $12.067 $15.658 12,064
2006 $15.658 $21.471 13,500
2007 $21.471 $29.043 16,859
2008 $29.043 $10.054 11,964
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.415 10,175
2005 $12.415 $18.511 27,980
2006 $18.511 $22.654 38,120
2007 $22.654 $32.366 35,969
2008 $32.366 $17.140 19,035
105 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $11.076 625
2005 $11.076 $12.098 1,444
2006 $12.098 $12.478 1,436
2007 $12.478 $14.424 713
2008 $14.424 $7.538 715
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.155 1,515
2005 $10.155 $10.309 3,666
2006 $10.309 $10.449 6,825
2007 $10.449 $10.992 5,828
2008 $10.992 $10.968 4,131
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $11.047 8,999
2005 $11.047 $11.915 42,450
2006 $11.915 $13.585 65,009
2007 $13.585 $13.689 61,062
2008 $13.689 $9.122 42,540
- -----------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.349 13,593
2005 $10.349 $11.749 18,729
2006 $11.749 $11.990 17,724
2007 $11.990 $14.338 6,708
2008 $14.338 $7.139 4,442
- -----------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.811 8,873
2005 $12.811 $14.704 41,284
2006 $14.704 $19.900 69,224
2007 $19.900 $16.181 49,043
2008 $16.181 $9.852 38,054
- -----------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.951 5,243
* The LBL Consultant Solutions Elite Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub- Account
into the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
106 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.621 0
2005 $10.621 $10.907 0
2006 $10.907 $12.000 0
2007 $12.000 $11.845 0
2008 $11.845 $5.549 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.184 0
2005 $10.184 $10.771 0
2006 $10.771 $11.127 0
2007 $11.127 $12.108 0
2008 $12.108 $6.766 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.708 0
2007 $10.708 $11.250 0
2008 $11.250 $7.634 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.862 0
2005 $10.862 $11.349 0
2006 $11.349 $12.269 0
2007 $12.269 $13.058 0
2008 $13.058 $9.070 0
- ----------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $9.986 0
2005 $9.986 $10.867 0
2006 $10.867 $11.104 0
2007 $11.104 $12.937 0
2008 $12.937 $6.767 0
- ----------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.101 0
2005 $10.101 $11.232 0
2006 $11.232 $13.015 0
2007 $13.015 $16.883 0
2008 $16.883 $9.000 0
- ----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.505 0
2005 $10.505 $11.209 0
2006 $11.209 $11.998 0
2007 $11.998 $15.338 0
2008 $15.338 $6.204 0
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.099 0
2005 $10.099 $10.209 0
2006 $10.209 $10.654 0
2007 $10.654 $11.950 0
2008 $11.950 $8.274 0
107 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.258 0
2005 $11.258 $12.792 0
2006 $12.792 $13.885 0
2007 $13.885 $15.861 0
2008 $15.861 $8.853 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.715 0
2005 $10.715 $11.019 0
2006 $11.019 $12.872 0
2007 $12.872 $12.695 0
2008 $12.695 $7.071 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.695 0
2005 $9.695 $9.964 0
2006 $9.964 $10.343 0
2007 $10.343 $12.759 0
2008 $12.759 $6.547 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.545 0
2005 $10.545 $10.740 0
2006 $10.740 $12.076 0
2007 $12.076 $12.370 0
2008 $12.370 $7.571 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.097 0
2005 $10.097 $10.022 0
2006 $10.022 $10.166 0
2007 $10.166 $10.305 0
2008 $10.305 $9.689 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.850 0
2005 $9.850 $9.861 0
2006 $9.861 $10.049 0
2007 $10.049 $10.272 0
2008 $10.272 $10.282 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.805 0
2005 $10.805 $12.502 0
2006 $12.502 $14.342 0
2007 $14.342 $16.349 0
2008 $16.349 $8.923 0
108 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.502 0
2005 $10.502 $11.014 0
2006 $11.014 $11.846 0
2007 $11.846 $12.723 0
2008 $12.723 $10.402 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.186 0
2005 $11.186 $11.576 0
2006 $11.576 $13.312 0
2007 $13.312 $15.331 0
2008 $15.331 $14.368 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.358 0
2005 $11.358 $12.453 0
2006 $12.453 $13.236 0
2007 $13.236 $17.612 0
2008 $17.612 $9.553 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.172 0
2005 $11.172 $11.971 0
2006 $11.971 $13.418 0
2007 $13.418 $14.004 0
2008 $14.004 $9.835 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--Service
Shares
2004 $10.000 $11.208 0
2005 $11.208 $12.109 0
2006 $12.109 $13.065 0
2007 $13.065 $13.504 0
2008 $13.504 $8.386 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.880 0
2006 $10.880 $12.916 0
2007 $12.916 $11.809 0
2008 $11.809 $7.371 0
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.427 0
2008 $9.427 $5.823 0
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.746 0
2005 $10.746 $10.838 0
2006 $10.838 $11.649 0
2007 $11.649 $11.307 0
2008 $11.307 $7.612 0
109 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.665 0
2008 $9.665 $6.060 0
- -----------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.529 0
2005 $10.529 $10.466 0
2006 $10.466 $11.214 0
2007 $11.214 $11.089 0
2008 $11.089 $7.705 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.350 0
2005 $10.350 $10.508 0
2006 $10.508 $10.983 0
2007 $12.000 $11.845 0
2008 $11.845 $7.289 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.685 0
2005 $10.685 $11.139 0
2006 $11.139 $12.227 0
2007 $10.983 $11.876 0
2008 $11.876 $8.518 0
- -----------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.830 0
2005 $9.830 $10.057 0
2006 $10.057 $11.063 0
2007 $11.063 $11.016 0
2008 $11.016 $6.489 0
- -----------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.659 0
2005 $10.659 $10.652 0
2006 $10.652 $11.582 0
2007 $11.582 $11.723 0
2008 $11.723 $8.870 0
- -----------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.046 0
2005 $11.046 $11.455 0
2006 $11.455 $13.447 0
2007 $13.447 $14.090 0
2008 $14.090 $9.229 0
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.623 0
2006 $11.623 $11.627 0
2007 $11.627 $12.007 0
2008 $12.007 $5.939 0
110 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.259 0
2005 $11.259 $12.509 0
2006 $12.509 $14.301 0
2007 $14.301 $14.774 0
2008 $14.774 $8.586 0
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.193 0
2005 $11.193 $11.962 0
2006 $11.962 $13.360 0
2007 $13.360 $12.830 0
2008 $12.830 $7.747 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.262 0
2005 $10.262 $10.511 0
2006 $10.511 $10.462 0
2007 $10.462 $10.559 0
2008 $10.559 $10.039 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.844 0
2005 $9.844 $9.854 0
2006 $9.854 $10.042 0
2007 $10.042 $10.257 0
2008 $10.257 $10.215 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.474 0
2005 $10.474 $10.415 0
2006 $10.415 $10.217 0
2007 $10.217 $11.013 0
2008 $11.013 $9.971 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.164 0
2005 $10.164 $10.142 0
2006 $10.142 $10.260 0
2007 $10.260 $10.868 0
2008 $10.868 $11.096 0
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.713 0
2005 $10.713 $10.721 0
2006 $10.721 $11.571 0
2007 $11.571 $10.768 0
2008 $10.768 $7.218 0
111 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.099 0
2005 $11.099 $10.322 0
2006 $10.322 $11.198 0
2007 $11.198 $11.595 0
2008 $11.595 $10.470 0
- ------------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.477 0
2005 $10.477 $11.604 0
2006 $11.604 $12.590 0
2007 $12.590 $15.050 0
2008 $15.050 $8.687 0
- ------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.369 0
2005 $10.369 $10.670 0
2006 $10.670 $11.362 0
2007 $11.362 $12.447 0
2008 $12.447 $6.953 0
- ------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $10.978 0
2005 $10.978 $11.089 0
2006 $11.089 $12.815 0
2007 $12.815 $12.858 0
2008 $12.858 $7.982 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.803 0
2005 $9.803 $9.568 0
2006 $9.568 $10.127 0
2007 $10.127 $10.262 0
2008 $10.262 $8.686 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $11.966 0
2005 $11.966 $15.386 0
2006 $15.386 $20.905 0
2007 $20.905 $28.017 0
2008 $28.017 $9.610 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.311 0
2005 $12.311 $18.189 0
2006 $18.189 $22.057 0
2007 $22.057 $31.224 0
2008 $31.224 $16.383 0
112 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Elite
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.5
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $10.984 0
2005 $10.984 $11.888 0
2006 $11.888 $12.149 0
2007 $12.149 $13.914 0
2008 $13.914 $7.205 0
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.070 0
2005 $10.070 $10.130 0
2006 $10.130 $10.174 0
2007 $10.174 $10.603 0
2008 $10.603 $10.484 0
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $10.955 0
2005 $10.955 $11.708 0
2006 $11.708 $13.227 0
2007 $13.227 $13.206 0
2008 $13.206 $8.719 0
- --------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.263 0
2005 $10.263 $11.545 0
2006 $11.545 $11.674 0
2007 $11.674 $13.832 0
2008 $13.832 $6.824 0
- --------------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.705 0
2005 $12.705 $14.448 0
2006 $14.448 $19.375 0
2007 $19.375 $15.610 0
2008 $15.610 $9.417 0
- --------------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.644 0
* The LBL Consultant Solutions Elite Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
113 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.725 168,023
2005 $10.725 $11.133 344,954
2006 $11.133 $12.379 418,263
2007 $12.379 $12.352 293,495
2008 $12.352 $5.849 426,442
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.284 25,081
2005 $10.284 $10.994 74,461
2006 $10.994 $11.479 125,960
2007 $11.479 $12.626 110,380
2008 $12.626 $7.132 125,423
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.785 274,689
2007 $10.785 $11.454 276,101
2008 $11.454 $7.857 288,185
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.968 184,194
2005 $10.968 $11.584 295,988
2006 $11.584 $12.657 442,279
2007 $12.657 $13.617 404,724
2008 $13.617 $9.561 420,218
- ----------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.084 162,285
2005 $10.084 $11.091 310,193
2006 $11.091 $11.455 291,942
2007 $11.455 $13.491 242,972
2008 $13.491 $7.133 252,657
- ----------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.200 27,034
2005 $10.200 $11.464 85,491
2006 $11.464 $13.427 127,011
2007 $13.427 $17.606 140,144
2008 $17.606 $9.487 131,667
- ----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.608 133,976
2005 $10.608 $11.441 327,548
2006 $11.441 $12.377 436,382
2007 $12.377 $15.995 397,229
2008 $15.995 $6.539 448,194
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.198 99,090
2005 $10.198 $10.420 153,559
2006 $10.420 $10.991 196,893
2007 $10.991 $12.461 181,005
2008 $12.461 $8.722 200,576
114 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.368 162,203
2005 $11.368 $13.056 636,774
2006 $13.056 $14.324 1,038,503
2007 $14.324 $16.540 915,580
2008 $16.540 $9.332 1,036,462
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.820 264,960
2005 $10.820 $11.246 642,154
2006 $11.246 $13.279 914,542
2007 $13.279 $13.239 882,993
2008 $13.239 $7.453 958,622
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.971 95,874
2005 $9.791 $10.170 162,979
2006 $10.170 $10.671 179,143
2007 $10.671 $13.305 176,462
2008 $13.305 $6.902 239,711
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.648 357,590
2005 $10.648 $10.961 1,013,570
2006 $10.961 $12.458 1,364,532
2007 $12.458 $12.899 1,221,783
2008 $12.899 $7.980 1,372,538
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.196 362,442
2005 $10.196 $10.229 877,078
2006 $10.229 $10.487 1,278,546
2007 $10.487 $10.746 1,490,496
2008 $10.746 $10.213 1,404,977
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.947 499,789
2005 $9.947 $10.065 1,298,309
2006 $10.065 $10.367 1,929,547
2007 $10.367 $10.712 1,860,555
2008 $10.712 $10.838 2,312,870
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.911 112,867
2005 $10.911 $12.760 307,437
2006 $12.760 $14.796 827,908
2007 $14.796 $17.049 807,662
2008 $17.049 $9.406 916,161
115 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.605 110,575
2005 $10.605 $11.241 317,819
2006 $11.241 $12.220 474,671
2007 $12.220 $13.267 419,411
2008 $13.267 $10.964 387,556
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.296 17,349
2005 $11.296 $11.815 78,760
2006 $11.815 $13.733 125,898
2007 $13.733 $15.987 130,612
2008 $15.987 $15.037 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.470 29,307
2005 $11.470 $12.710 109,414
2006 $12.710 $13.654 160,923
2007 $13.654 $18.366 194,043
2008 $18.366 $10.069 230,987
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.282 130,218
2005 $11.282 $12.219 435,715
2006 $12.219 $13.842 636,948
2007 $13.842 $14.604 603,783
2008 $14.604 $10.366 628,536
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.318 47,209
2005 $11.318 $12.359 136,370
2006 $12.359 $13.478 168,301
2007 $13.478 $14.082 157,185
2008 $14.082 $8.839 156,723
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.959 52,116
2006 $10.959 $13.149 208,907
2007 $13.149 $12.153 204,185
2008 $12.153 $7.667 200,043
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.496 77,930
2008 $9.496 $5.929 78,084
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.851 233,161
2005 $10.851 $11.062 729,975
2006 $11.062 $12.018 1,048,615
2007 $12.018 $11.791 1,007,552
2008 $11.791 $8.023 988,849
116 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.735 115,189
2008 $9.735 $6.170 84,142
- ------------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.632 173,571
2005 $10.632 $10.682 363,031
2006 $10.682 $11.568 409,143
2007 $11.568 $11.563 406,241
2008 $11.563 $8.121 391,449
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.452 27,908
2005 $10.452 $10.725 288,901
2006 $10.725 $11.331 530,447
2007 $11.331 $12.384 487,942
2008 $12.384 $7.683 536,714
- ------------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.790 31,444
2005 $10.790 $11.369 69,837
2006 $11.369 $12.614 75,414
2007 $12.614 $13.663 71,252
2008 $13.663 $8.978 89,673
- ------------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.926 79,708
2005 $9.926 $10.265 115,243
2006 $10.265 $11.413 143,917
2007 $11.413 $11.488 133,227
2008 $11.488 $6.840 145,739
- ------------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.763 270,271
2005 $10.763 $10.872 649,848
2006 $10.872 $11.948 786,417
2007 $11.948 $12.225 733,113
2008 $12.225 $9.349 623,702
- ------------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.154 52,533
2005 $11.154 $11.692 155,911
2006 $11.692 $13.872 185,240
2007 $13.872 $14.693 178,813
2008 $14.693 $9.728 218,888
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.707 31,034
2006 $11.707 $11.837 86,941
2007 $11.837 $12.356 79,497
2008 $12.356 $6.178 88,007
117 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.369 135,685
2005 $11.369 $12.767 311,510
2006 $12.767 $14.753 416,951
2007 $14.753 $15.406 390,850
2008 $15.406 $9.050 394,574
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.303 148,467
2005 $11.303 $12.209 444,920
2006 $12.209 $13.782 658,435
2007 $13.782 $13.379 616,978
2008 $13.379 $8.165 662,016
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.363 72,884
2005 $10.363 $10.728 336,138
2006 $10.728 $10.793 524,188
2007 $10.793 $11.011 473,852
2008 $11.011 $10.582 431,280
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.941 306,156
2005 $9.941 $10.057 529,839
2006 $10.057 $10.359 727,162
2007 $10.359 $10.696 706,907
2008 $10.696 $10.767 859,497
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.577 266,929
2005 $10.577 $10.630 855,244
2006 $10.630 $10.540 1,126,346
2007 $10.540 $11.484 1,038,569
2008 $11.484 $10.510 1,164,877
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.264 326,918
2005 $10.264 $10.352 781,636
2006 $10.352 $10.585 1,399,499
2007 $10.585 $11.333 1,362,786
2008 $11.333 $11.695 1,498,179
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.790 49,506
2005 $10.790 $10.914 88,648
2006 $10.914 $11.906 102,842
2007 $11.906 $11.200 100,376
2008 $11.200 $7.589 91,560
118 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.208 99,659
2005 $11.208 $10.535 156,525
2006 $10.535 $11.552 181,544
2007 $11.552 $12.091 133,825
2008 $12.091 $10.924 0
- ------------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.579 9,293
2005 $10.579 $11.844 42,301
2006 $11.844 $12.989 96,320
2007 $12.989 $15.694 104,063
2008 $15.694 $9.157 117,641
- ------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.470 118,706
2005 $10.470 $10.890 568,834
2006 $10.890 $11.722 1,046,476
2007 $11.722 $12.980 921,017
2008 $12.980 $7.329 1,076,189
- ------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $11.086 386,880
2005 $11.086 $11.318 1,352,680
2006 $11.318 $13.221 1,710,177
2007 $13.221 $13.409 1,570,162
2008 $13.409 $8.413 1,608,523
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.899 17,544
2005 $9.899 $9.766 49,850
2006 $9.766 $10.447 69,904
2007 $10.447 $10.701 67,655
2008 $10.701 $9.156 83,819
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $12.083 16,416
2005 $12.083 $15.703 107,894
2006 $15.703 $21.566 197,437
2007 $21.566 $29.216 217,317
2008 $29.216 $10.130 178,770
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.432 30,408
2005 $12.432 $18.565 144,710
2006 $18.565 $22.754 196,815
2007 $22.754 $32.560 208,194
2008 $32.560 $17.269 189,943
119 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.45
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $11.091 21,341
2005 $11.091 $12.133 28,367
2006 $12.133 $12.534 38,306
2007 $12.534 $14.510 38,611
2008 $14.510 $7.594 49,182
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.169 196,904
2005 $10.169 $10.339 330,133
2006 $10.339 $10.496 394,113
2007 $10.496 $11.057 382,399
2008 $11.057 $11.051 541,227
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $11.063 187,532
2005 $11.063 $11.950 597,525
2006 $11.950 $13.645 965,056
2007 $13.645 $13.771 913,686
2008 $13.771 $9.191 900,825
- --------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.364 43,290
2005 $10.364 $11.783 100,577
2006 $11.783 $12.043 118,076
2007 $12.043 $14.424 101,174
2008 $14.424 $7.193 110,041
- --------------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.829 290,164
2005 $12.829 $14.747 680,199
2006 $14.747 $19.988 844,038
2007 $19.988 $16.278 713,922
2008 $16.278 $9.926 725,507
- --------------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $7.003 153,801
* The LBL Consultant Solutions Plus Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
120 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.636 0
2005 $10.636 $10.939 0
2006 $10.939 $12.053 0
2007 $12.053 $11.917 0
2008 $11.917 $5.591 0
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.198 0
2005 $10.198 $10.803 0
2006 $10.803 $11.177 0
2007 $11.177 $12.181 0
2008 $12.181 $6.817 0
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.719 0
2007 $10.719 $11.279 0
2008 $11.279 $7.666 0
- ---------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.877 0
2005 $10.877 $11.383 0
2006 $11.383 $12.324 0
2007 $12.324 $13.137 0
2008 $13.137 $9.139 0
- ---------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.000 0
2005 $10.000 $10.899 0
2006 $10.899 $11.154 0
2007 $11.154 $13.015 0
2008 $13.015 $6.818 626
- ---------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.115 0
2005 $10.115 $11.265 0
2006 $11.265 $13.074 0
2007 $13.074 $16.985 0
2008 $16.985 $9.069 0
- ---------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.520 0
2005 $10.520 $11.242 0
2006 $11.242 $12.051 0
2007 $12.051 $15.431 0
2008 $15.431 $6.251 0
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.113 0
2005 $10.113 $10.239 0
2006 $10.239 $10.702 0
2007 $10.702 $12.022 0
2008 $12.022 $8.337 1,129
121 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.274 0
2005 $11.274 $12.829 0
2006 $12.829 $13.947 0
2007 $13.947 $15.957 0
2008 $15.957 $8.920 0
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.730 0
2005 $10.730 $11.051 0
2006 $11.051 $12.930 0
2007 $12.930 $12.772 0
2008 $12.772 $7.125 1,122
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.709 0
2005 $9.709 $9.993 0
2006 $9.993 $10.390 0
2007 $10.390 $12.836 0
2008 $12.836 $6.597 0
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.560 0
2005 $10.560 $10.771 0
2006 $10.771 $12.130 0
2007 $12.130 $12.444 0
2008 $12.444 $7.628 0
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.112 0
2005 $10.112 $10.051 0
2006 $10.051 $10.211 0
2007 $10.211 $10.367 0
2008 $10.367 $9.763 0
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.864 0
2005 $9.864 $9.890 0
2006 $9.890 $10.095 0
2007 $10.095 $10.334 0
2008 $10.334 $10.360 408
- ---------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.820 0
2005 $10.820 $12.539 0
2006 $12.539 $14.406 0
2007 $14.406 $16.448 0
2008 $16.448 $8.991 925
122 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.517 0
2005 $10.517 $11.046 0
2006 $11.046 $11.899 0
2007 $11.899 $12.799 0
2008 $12.799 $10.481 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.202 0
2005 $11.202 $11.610 0
2006 $11.610 $13.372 0
2007 $13.372 $15.423 0
2008 $15.423 $14.462 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.374 0
2005 $11.374 $12.490 0
2006 $12.490 $13.295 0
2007 $13.295 $17.719 0
2008 $17.719 $9.625 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.188 0
2005 $11.188 $12.007 0
2006 $12.007 $13.478 0
2007 $13.478 $14.089 0
2008 $14.089 $9.909 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.224 0
2005 $11.224 $12.144 0
2006 $12.144 $13.124 0
2007 $13.124 $13.585 0
2008 $13.585 $8.449 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.891 0
2006 $10.891 $12.949 0
2007 $12.949 $11.858 0
2008 $11.858 $7.412 0
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.436 0
2008 $9.436 $5.838 0
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.761 0
2005 $10.761 $10.870 0
2006 $10.870 $11.701 0
2007 $11.701 $11.376 0
2008 $11.376 $7.669 0
123 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.675 0
2008 $9.675 $6.075 0
- -----------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.544 0
2005 $10.544 $10.497 0
2006 $10.497 $11.264 0
2007 $11.264 $11.156 0
2008 $11.156 $7.763 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.365 0
2005 $10.365 $10.539 0
2006 $10.539 $11.033 0
2007 $12.053 $11.917 0
2008 $11.917 $7.344 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.700 0
2005 $10.700 $11.172 0
2006 $11.172 $12.282 0
2007 $11.033 $11.947 0
2008 $11.947 $8.582 0
- -----------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.844 0
2005 $9.844 $10.086 0
2006 $10.086 $11.112 0
2007 $11.112 $11.082 0
2008 $11.082 $6.538 0
- -----------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.674 0
2005 $10.674 $10.684 0
2006 $10.684 $11.634 0
2007 $11.634 $11.794 0
2008 $11.794 $8.937 2,314
- -----------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.061 0
2005 $11.061 $11.489 0
2006 $11.489 $13.507 0
2007 $13.507 $14.175 0
2008 $14.175 $9.299 0
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.635 0
2006 $11.635 $11.657 0
2007 $11.657 $12.056 0
2008 $12.056 $5.973 0
124 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.275 0
2005 $11.275 $12.546 0
2006 $12.546 $14.365 0
2007 $14.365 $14.863 0
2008 $14.863 $8.651 0
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.209 0
2005 $11.209 $11.997 0
2006 $11.997 $13.420 0
2007 $13.420 $12.907 0
2008 $12.907 $7.805 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.276 0
2005 $10.276 $10.541 0
2006 $10.541 $10.509 0
2007 $10.509 $10.623 0
2008 $10.623 $10.116 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.858 0
2005 $9.858 $9.883 0
2006 $9.883 $10.087 0
2007 $10.087 $10.318 0
2008 $10.318 $10.292 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.489 0
2005 $10.489 $10.446 0
2006 $10.446 $10.263 0
2007 $10.263 $11.079 0
2008 $11.079 $10.047 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.178 0
2005 $10.178 $10.172 0
2006 $10.172 $10.306 0
2007 $10.306 $10.934 0
2008 $10.934 $11.180 1,432
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.724 0
2005 $10.724 $10.749 0
2006 $10.749 $11.618 0
2007 $11.618 $10.829 0
2008 $10.829 $7.270 0
125 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ---------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.115 0
2005 $11.115 $10.352 0
2006 $10.352 $11.248 0
2007 $11.248 $11.665 0
2008 $11.665 $10.534 0
- ---------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.491 0
2005 $10.491 $11.638 0
2006 $11.638 $12.647 0
2007 $12.647 $15.141 0
2008 $15.141 $8.753 0
- ---------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.383 0
2005 $10.383 $10.701 0
2006 $10.701 $11.413 0
2007 $11.413 $12.523 0
2008 $12.523 $7.005 0
- ---------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $10.993 0
2005 $10.993 $11.121 0
2006 $11.121 $12.873 0
2007 $12.873 $12.936 0
2008 $12.936 $8.042 1,333
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.817 0
2005 $9.817 $9.596 0
2006 $9.596 $10.172 0
2007 $10.172 $10.324 0
2008 $10.324 $8.752 0
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $11.983 0
2005 $11.983 $15.431 0
2006 $15.431 $20.999 0
2007 $20.999 $28.186 0
2008 $28.186 $9.683 0
- ---------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.329 0
2005 $12.329 $18.243 0
2006 $18.243 $22.156 0
2007 $22.156 $31.412 0
2008 $31.412 $16.508 0
126 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Plus
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.35
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $10.999 0
2005 $10.999 $11.923 0
2006 $11.923 $12.204 0
2007 $12.204 $13.998 0
2008 $13.998 $7.259 0
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.084 0
2005 $10.084 $10.160 0
2006 $10.160 $10.220 0
2007 $10.220 $10.667 0
2008 $10.667 $10.563 0
- -----------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $10.971 0
2005 $10.971 $11.743 0
2006 $11.743 $13.286 0
2007 $13.286 $13.286 0
2008 $13.286 $8.785 0
- -----------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.278 0
2005 $10.278 $11.579 0
2006 $11.579 $11.726 0
2007 $11.726 $13.915 0
2008 $13.915 $6.875 0
- -----------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.722 0
2005 $12.722 $14.491 0
2006 $14.491 $19.462 0
2007 $19.462 $15.704 0
2008 $15.704 $9.488 0
- -----------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.694 0
* The LBL Consultant Solutions Plus Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
127 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.701 11,482
2005 $10.701 $11.079 24,729
2006 $11.079 $12.288 8,519
2007 $12.288 $12.230 26,372
2008 $12.230 $5.776 28,022
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.260 15,284
2005 $10.260 $10.940 18,497
2006 $10.940 $11.395 4,420
2007 $11.395 $12.501 9,752
2008 $12.501 $7.043 14,356
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.767 3,608
2007 $10.767 $11.405 16,749
2008 $11.405 $7.804 23,452
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.943 2,665
2005 $10.943 $11.528 3,174
2006 $11.528 $12.564 10,458
2007 $12.564 $13.482 12,802
2008 $13.482 $9.442 35,385
- ----------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $10.061 13,364
2005 $10.061 $11.038 13,863
2006 $11.038 $11.371 10,863
2007 $11.371 $13.357 10,486
2008 $13.357 $7.044 20,165
- ----------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.177 2,386
2005 $10.177 $11.409 39,056
2006 $11.409 $13.328 4,489
2007 $13.328 $17.432 18,890
2008 $17.432 $9.369 12,250
- ----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.584 27,739
2005 $10.584 $11.385 54,020
2006 $11.385 $12.286 5,659
2007 $12.286 $15.837 32,351
2008 $15.837 $6.458 30,915
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.174 20,705
2005 $10.174 $10.369 26,325
2006 $10.369 $10.910 19,985
2007 $10.910 $12.338 10,303
2008 $12.338 $8.614 15,530
128 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.342 45,341
2005 $11.342 $12.993 144,919
2006 $12.993 $14.218 32,667
2007 $14.218 $16.377 80,603
2008 $16.377 $9.216 102,855
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.795 46,651
2005 $10.795 $11.192 93,792
2006 $11.192 $13.182 19,478
2007 $13.182 $13.108 98,411
2008 $13.108 $7.361 102,049
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.768 28,770
2005 $9.768 $10.120 55,605
2006 $10.120 $10.592 11,849
2007 $10.592 $13.173 75,363
2008 $13.173 $6.816 71,379
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.624 125,438
2005 $10.624 $10.908 263,983
2006 $10.908 $12.366 43,696
2007 $12.366 $12.772 211,816
2008 $12.772 $7.881 225,131
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.173 48,708
2005 $10.173 $10.180 101,437
2006 $10.180 $10.410 31,813
2007 $10.410 $10.639 90,643
2008 $10.639 $10.086 138,607
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.924 168,709
2005 $9.924 $10.016 228,196
2006 $10.016 $10.291 33,135
2007 $10.291 $10.606 258,815
2008 $10.606 $10.703 280,115
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.886 28,247
2005 $10.886 $12.698 49,873
2006 $12.698 $14.687 16,491
2007 $14.687 $16.880 84,356
2008 $16.880 $9.289 71,734
129 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.581 10,013
2005 $10.581 $11.187 17,505
2006 $11.187 $12.130 1,999
2007 $12.130 $13.136 14,877
2008 $13.136 $10.828 22,471
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.270 27,022
2005 $11.270 $11.758 6,336
2006 $11.758 $13.632 2,516
2007 $13.632 $15.829 6,797
2008 $15.829 $14.875 0
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.443 1,269
2005 $11.443 $12.649 11,195
2006 $12.649 $13.554 2,354
2007 $13.554 $18.185 13,531
2008 $18.185 $9.944 14,716
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.256 11,610
2005 $11.256 $12.159 21,644
2006 $12.159 $13.740 10,246
2007 $13.740 $14.459 34,280
2008 $14.459 $10.238 42,657
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.292 4,773
2005 $11.292 $12.299 28,781
2006 $12.299 $13.379 901
2007 $13.379 $13.943 13,792
2008 $13.943 $8.729 10,922
- -------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.940 3,239
2006 $10.940 $13.093 2,462
2007 $13.093 $12.071 12,418
2008 $12.071 $7.596 19,904
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.479 553
2008 $9.479 $5.904 8,461
- -------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.286 17,645
2005 $10.826 $11.008 46,676
2006 $11.008 $11.929 15,302
2007 $11.929 $11.675 47,449
2008 $11.675 $7.924 53,932
130 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.718 10,050
2008 $9.718 $6.144 8,585
- -----------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.608 23,363
2005 $10.608 $10.631 20,622
2006 $10.631 $11.483 6,286
2007 $11.483 $11.449 23,290
2008 $11.449 $8.020 27,280
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.428 1,297
2005 $10.428 $10.673 14,429
2006 $10.673 $11.248 7,739
2007 $11.248 $12.262 18,306
2008 $12.262 $7.588 22,364
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.765 1,311
2005 $10.765 $11.314 5,472
2006 $11.314 $12.521 1,693
2007 $12.521 $13.528 3,450
2008 $13.528 $8.867 5,345
- -----------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.903 6,659
2005 $9.903 $10.215 7,704
2006 $10.215 $11.329 2,187
2007 $11.329 $11.374 10,252
2008 $11.374 $6.755 10,509
- -----------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.739 19,818
2005 $10.739 $10.820 51,781
2006 $10.820 $11.861 18,099
2007 $11.861 $12.104 20,247
2008 $12.104 $9.233 26,900
- -----------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.128 3,382
2005 $11.128 $11.635 5,222
2006 $11.635 $13.770 2,124
2007 $13.770 $14.547 8,826
2008 $14.547 $9.608 4,507
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.687 7,856
2006 $11.687 $11.787 7,348
2007 $11.787 $12.272 5,022
2008 $12.272 $6.120 7,593
131 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.343 62,080
2005 $11.343 $12.706 86,497
2006 $12.706 $14.644 10,134
2007 $14.644 $15.254 111,096
2008 $15.254 $8.938 64,672
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.277 35,420
2005 $11.277 $12.150 81,846
2006 $12.150 $13.681 11,584
2007 $13.681 $13.246 44,402
2008 $13.246 $8.064 43,930
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.339 9,772
2005 $10.339 $10.676 47,366
2006 $10.676 $10.714 8,948
2007 $10.714 $10.902 33,647
2008 $10.902 $10.451 27,562
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.918 158,641
2005 $9.918 $10.009 150,481
2006 $10.009 $10.283 27,607
2007 $10.283 $10.590 32,822
2008 $10.590 $10.634 91,586
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.552 42,470
2005 $10.552 $10.579 122,346
2006 $10.579 $10.462 16,994
2007 $10.462 $11.371 42,156
2008 $11.371 $10.380 41,393
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.240 58,540
2005 $10.240 $10.302 76,949
2006 $10.302 $10.507 28,759
2007 $10.507 $11.221 79,939
2008 $11.221 $11.550 109,474
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.772 5,494
2005 $10.772 $10.868 6,958
2006 $10.868 $11.826 560
2007 $11.826 $11.096 7,098
2008 $11.096 $7.499 9,792
132 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.182 31,488
2005 $11.182 $10.484 23,563
2006 $10.484 $11.467 6,181
2007 $11.467 $11.971 12,010
2008 $11.971 $10.815 0
- ------------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.555 418
2005 $10.555 $11.787 4,603
2006 $11.787 $12.893 5,562
2007 $12.893 $15.539 6,080
2008 $15.539 $9.043 13,735
- ------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.446 6,370
2005 $10.446 $10.837 57,136
2006 $10.837 $11.636 16,451
2007 $11.636 $12.852 54,684
2008 $12.852 $7.238 68,814
- ------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $11.060 57,291
2005 $11.060 $11.263 110,586
2006 $11.263 $13.123 28,044
2007 $13.123 $13.276 72,693
2008 $13.276 $8.309 93,184
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.876 1,961
2005 $9.876 $9.719 2,232
2006 $9.719 $10.370 8,505
2007 $10.370 $10.595 5,710
2008 $10.595 $9.042 3,607
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $12.055 2,104
2005 $12.055 $15.627 18,780
2006 $15.627 $21.408 5,890
2007 $21.408 $28.927 22,998
2008 $28.927 $10.004 15,749
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.403 6,528
2005 $12.403 $18.475 31,637
2006 $18.475 $22.587 59,022
2007 $22.587 $32.238 35,164
2008 $32.238 $17.055 36,260
133 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
Low
Mortality & Expense = 1.7
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $11.066 1,962
2005 $11.066 $12.075 3,009
2006 $12.075 $12.441 3,261
2007 $12.441 $14.367 10,156
2008 $14.367 $7.500 5,141
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.145 28,946
2005 $10.145 $10.289 43,426
2006 $10.289 $10.419 5,556
2007 $10.419 $10.948 21,802
2008 $10.948 $10.914 24,600
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $11.037 16,781
2005 $11.037 $11.892 31,692
2006 $11.892 $13.544 12,839
2007 $13.544 $13.635 34,015
2008 $13.635 $9.076 41,700
- --------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.340 2,987
2005 $10.340 $11.726 7,296
2006 $11.726 $11.954 1,579
2007 $11.954 $14.281 1,834
2008 $14.281 $7.103 3,770
- --------------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.799 40,344
2005 $12.799 $14.675 59,925
2006 $14.675 $19.841 23,273
2007 $19.841 $16.117 49,639
2008 $16.117 $9.803 52,161
- --------------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.916 7,352
* The LBL Consultant Solutions Select Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
134 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Basic Value Fund--Series II
2004 $10.000 $10.611 0
2005 $10.611 $10.886 0
2006 $10.886 $11.964 0
2007 $11.964 $11.798 0
2008 $11.798 $5.521 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund--Series II
2004 $10.000 $10.175 0
2005 $10.175 $10.750 0
2006 $10.750 $11.094 0
2007 $11.094 $12.059 0
2008 $12.059 $6.732 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Core Equity Fund--Series II
2006 $10.000 $10.700 0
2007 $10.700 $11.230 0
2008 $11.230 $7.613 0
- ----------------------------------------------------------------------------------------------------------
AIM V.I. Mid Cap Core Equity Fund--Series II
2004 $10.000 $10.852 0
2005 $10.852 $11.327 0
2006 $11.327 $12.233 0
2007 $12.233 $13.005 0
2008 $13.005 $9.025 0
- ----------------------------------------------------------------------------------------------------------
Alger American LargeCap Growth Portfolio--Class S
2004 $10.000 $9.977 0
2005 $9.977 $10.846 0
2006 $10.846 $11.071 0
2007 $11.071 $12.885 0
2008 $12.885 $6.733 0
- ----------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio--Class S
2004 $10.000 $10.092 0
2005 $10.092 $11.210 0
2006 $11.210 $12.977 0
2007 $12.977 $16.815 0
2008 $16.815 $8.955 0
- ----------------------------------------------------------------------------------------------------------
Alger American MidCap Growth Portfolio--Class S
2004 $10.000 $10.495 0
2005 $10.495 $11.187 0
2006 $11.187 $11.962 0
2007 $11.962 $15.277 0
2008 $15.277 $6.172 0
- ----------------------------------------------------------------------------------------------------------
Fidelity VIP Asset Manager Portfolio--Service Class 2
2004 $10.000 $10.089 0
2005 $10.089 $10.189 0
2006 $10.189 $10.622 0
2007 $10.622 $11.902 0
2008 $11.902 $8.233 0
135 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund Portfolio--Service Class 2
2004 $10.000 $11.247 0
2005 $11.247 $12.767 0
2006 $12.767 $13.843 0
2007 $13.843 $15.798 0
2008 $15.798 $8.809 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio--Service Class 2
2004 $10.000 $10.705 0
2005 $10.705 $10.997 0
2006 $10.997 $12.834 0
2007 $12.834 $12.644 0
2008 $12.644 $7.035 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio--Service Class 2
2004 $10.000 $9.686 0
2005 $9.686 $9.944 0
2006 $9.944 $10.313 0
2007 $10.313 $12.707 0
2008 $12.707 $6.514 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio--Service Class 2
2004 $10.000 $10.535 0
2005 $10.535 $10.719 0
2006 $10.719 $12.040 0
2007 $12.040 $12.320 0
2008 $12.320 $7.533 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Investment Grade Bond Portfolio--Service Class 2
2004 $10.000 $10.088 0
2005 $10.088 $10.002 0
2006 $10.002 $10.136 0
2007 $10.136 $10.263 0
2008 $10.263 $9.641 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Money Market Portfolio--Service Class 2
2004 $10.000 $9.841 0
2005 $9.841 $9.842 0
2006 $9.842 $10.020 0
2007 $10.020 $10.231 0
2008 $10.231 $10.230 0
- -----------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio--Service Class 2
2004 $10.000 $10.795 0
2005 $10.795 $12.477 0
2006 $12.477 $14.299 0
2007 $14.299 $16.284 0
2008 $16.284 $8.878 0
136 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Balanced Portfolio--Service Shares
2004 $10.000 $10.493 0
2005 $10.493 $10.992 0
2006 $10.992 $11.810 0
2007 $11.810 $12.672 0
2008 $12.672 $10.349 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Foreign Stock Portfolio--Service Shares
2004 $10.000 $11.176 0
2005 $11.176 $11.553 0
2006 $11.553 $13.273 0
2007 $13.273 $15.270 0
2008 $15.270 $14.306 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Forty Portfolio--Service Shares
2004 $10.000 $11.348 0
2005 $11.348 $12.429 0
2006 $12.429 $13.197 0
2007 $13.197 $17.542 0
2008 $17.542 $9.505 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Mid Cap Value Portfolio--Service Shares
2004 $10.000 $11.162 0
2005 $11.162 $11.948 0
2006 $11.948 $13.378 0
2007 $13.378 $13.948 0
2008 $13.948 $9.785 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series INTECH Risk-Managed Core Portfolio--
Service Shares
2004 $10.000 $11.198 0
2005 $11.198 $12.085 0
2006 $12.085 $13.026 0
2007 $13.026 $13.450 0
2008 $13.450 $8.343 0
- --------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Small Company Value Portfolio--Service Shares
2005 $10.000 $10.873 0
2006 $10.873 $12.894 0
2007 $12.894 $11.777 0
2008 $11.777 $7.343 0
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Fundamental Value Portfolio--Class I (1)
2007 $10.000 $9.420 0
2008 $9.420 $5.813 0
- --------------------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Global High Yield Bond Portfolio--
Class II
2004 $10.000 $10.735 0
2005 $10.735 $10.817 0
2006 $10.817 $11.614 0
2007 $11.614 $11.262 0
2008 $11.262 $7.573 0
137 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -----------------------------------------------------------------------------------------------------------------
Legg Mason Partners Variable Investors Portfolio--Class I (2)
2007 $10.000 $9.658 0
2008 $9.658 $6.049 0
- -----------------------------------------------------------------------------------------------------------------
MFS High Income Series--Service Class
2004 $10.000 $10.519 0
2005 $10.519 $10.446 0
2006 $10.446 $11.180 0
2007 $11.180 $11.044 0
2008 $11.044 $7.666 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Growth Stock Series--Service Class
2004 $10.000 $10.341 0
2005 $10.341 $10.488 0
2006 $10.488 $10.951 0
2007 $11.964 $11.798 0
2008 $11.798 $7.252 0
- -----------------------------------------------------------------------------------------------------------------
MFS Investors Trust Series--Service Class
2004 $10.000 $10.675 0
2005 $10.675 $11.117 0
2006 $11.117 $12.191 0
2007 $10.951 $11.828 0
2008 $11.828 $8.475 0
- -----------------------------------------------------------------------------------------------------------------
MFS New Discovery Series--Service Class
2004 $10.000 $9.821 0
2005 $9.821 $10.037 0
2006 $10.037 $11.030 0
2007 $11.030 $10.972 0
2008 $10.972 $6.456 0
- -----------------------------------------------------------------------------------------------------------------
MFS Total Return Series--Service Class
2004 $10.000 $10.649 0
2005 $10.649 $10.631 0
2006 $10.631 $11.548 0
2007 $11.548 $11.676 0
2008 $11.676 $8.825 0
- -----------------------------------------------------------------------------------------------------------------
MFS Value Series--Service Class
2004 $10.000 $11.036 0
2005 $11.036 $11.433 0
2006 $11.433 $13.407 0
2007 $13.407 $14.033 0
2008 $14.033 $9.183 0
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer MidCap Fund/VA--Service Shares (2)
2005 $10.000 $11.615 0
2006 $11.615 $11.607 0
2007 $11.607 $11.974 0
2008 $11.974 $5.917 0
138 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA--Service Shares
2004 $10.000 $11.249 0
2005 $11.249 $12.485 0
2006 $12.485 $14.258 0
2007 $14.258 $14.715 0
2008 $14.715 $8.542 0
- -------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund/VA--Service Shares
2004 $10.000 $11.183 0
2005 $11.183 $11.939 0
2006 $11.939 $13.320 0
2007 $13.320 $12.778 0
2008 $12.778 $7.708 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged)--
Administrative Shares
2004 $10.000 $10.252 0
2005 $10.252 $10.490 0
2006 $10.490 $10.431 0
2007 $10.431 $10.517 0
2008 $10.517 $9.989 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Money Market Portfolio--Administrative Shares
2004 $10.000 $9.835 0
2005 $9.835 $9.835 0
2006 $9.835 $10.012 0
2007 $10.012 $10.215 0
2008 $10.215 $10.164 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Real Return Portfolio--Administrative Shares
2004 $10.000 $10.464 0
2005 $10.464 $10.395 0
2006 $10.395 $10.186 0
2007 $10.186 $10.969 0
2008 $10.969 $9.921 0
- -------------------------------------------------------------------------------------------------------------
PIMCO VIT Total Return Portfolio--Administrative Shares
2004 $10.000 $10.155 0
2005 $10.155 $10.122 0
2006 $10.122 $10.230 0
2007 $10.230 $10.824 0
2008 $10.824 $11.040 0
- -------------------------------------------------------------------------------------------------------------
Premier VIT OpCap Balanced Portfolio
2004 $10.000 $10.706 0
2005 $10.706 $10.703 0
2006 $10.703 $11.539 0
2007 $11.539 $10.728 0
2008 $10.728 $7.183 0
139 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- ------------------------------------------------------------------------------------------------
Premier VIT OpCap Renaissance Portfolio
2004 $10.000 $11.089 0
2005 $11.089 $10.302 0
2006 $10.302 $11.164 0
2007 $11.164 $11.548 0
2008 $11.548 $10.428 0
- ------------------------------------------------------------------------------------------------
Rydex VT Sector Rotation Fund
2004 $10.000 $10.467 0
2005 $10.467 $11.582 0
2006 $11.582 $12.553 0
2007 $12.553 $14.990 0
2008 $14.990 $8.643 0
- ------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio--II
2004 $10.000 $10.359 0
2005 $10.359 $10.649 0
2006 $10.649 $11.329 0
2007 $11.329 $12.398 0
2008 $12.398 $6.918 0
- ------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio--II
2004 $10.000 $10.968 0
2005 $10.968 $11.067 0
2006 $11.067 $12.777 0
2007 $12.777 $12.807 0
2008 $12.807 $7.942 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Absolute Return Fund
2004 $10.000 $9.794 0
2005 $9.794 $9.549 0
2006 $9.549 $10.097 0
2007 $10.097 $10.221 0
2008 $10.221 $8.642 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Emerging Markets Fund
2004 $10.000 $11.955 0
2005 $11.955 $15.355 0
2006 $15.355 $20.843 0
2007 $20.843 $27.905 0
2008 $27.905 $9.562 0
- ------------------------------------------------------------------------------------------------
Van Eck Worldwide Hard Assets Fund
2004 $10.000 $12.300 0
2005 $12.300 $18.154 0
2006 $18.154 $21.992 0
2007 $21.992 $31.099 0
2008 $31.099 $16.301 0
140 PROSPECTUS
CONSULTANT SOLUTIONS VARIABLE ANNUITIES: LBL Consultant Solution Select
Contracts--PROSPECTUS
ACCUMULATION UNIT VALUE AND NUMBER OF ACCUMULATION UNITS OUTSTANDING FOR EACH
VARIABLE SUB-ACCOUNT*
High
Mortality & Expense = 2.6
Number
Accumulation Accumulation of Units
For the Year Unit Value Unit Value Outstanding
Ending at Beginning at End at End
Sub Accounts December 31 of Period of Period of Period
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Mid Cap Growth Portfolio, Class II
2004 $10.000 $10.973 0
2005 $10.973 $11.864 0
2006 $11.864 $12.113 0
2007 $12.113 $13.859 0
2008 $13.859 $7.169 0
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Government Portfolio, Class II
2004 $10.000 $10.061 0
2005 $10.061 $10.110 0
2006 $10.110 $10.144 0
2007 $10.144 $10.561 0
2008 $10.561 $10.431 0
- --------------------------------------------------------------------------------------------------------
Van Kampen LIT Growth and Income Portfolio, Class II
2004 $10.000 $10.945 0
2005 $10.945 $11.685 0
2006 $11.685 $13.187 0
2007 $13.187 $13.153 0
2008 $13.153 $8.675 0
- --------------------------------------------------------------------------------------------------------
UIF Capital Growth Portfolio, Class II (3)
2004 $10.000 $10.254 0
2005 $10.254 $11.522 0
2006 $11.522 $11.639 0
2007 $11.639 $13.776 0
2008 $13.776 $6.789 0
- --------------------------------------------------------------------------------------------------------
UIF U.S. Real Estate Portfolio, Class II (3)
2004 $10.000 $12.693 0
2005 $12.693 $14.420 0
2006 $14.420 $19.318 0
2007 $19.318 $15.547 0
2008 $15.547 $9.370 0
- --------------------------------------------------------------------------------------------------------
Janus Aspen International Growth--Service Shares
2008 $10.000 $6.611 0
* The LBL Consultant Solutions Select Contracts and all of the Variable
Sub-Accounts shown below were first offered under the Contracts on
February 2, 2004, except for the Premier VIT OpCap Balanced Sub-Account which
was first offered under the Contracts on April 30, 2004; and the Janus Aspen
Series Small Company Value--Service Shares Sub-Account and Oppenheimer
MidCap/VA--Service Shares Sub-Account which were first offered under the
Contracts on May 1, 2005; and the AIM V.I. Core Equity--Series II Sub-Account
which was first offered under the Contracts on May 1, 2006; and the Legg
Mason Partners Variable Fundamental Value Portfolio--Class I Sub-Account and
Legg Mason Partners Variable Investors--Class I Sub-Account which were first
offered under the Contracts on April 27, 2007.
(1)Effective April 27, 2007, the Legg Mason Partners Variable All Cap
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Fundamental Value Portfolio--Class I. Accordingly, on April 27, 2007, we
combined the Legg Mason Partners Variable All Cap--Class II Sub-Account into
the Legg Mason Partners Variable Fundamental Value Portfolio--Class I
Sub-Account.
(2)Effective April 27, 2007, the Legg Mason Partners Variable Investors
Portfolio--Class II was reorganized into the Legg Mason Partners Variable
Investors Portfolio--Class I. Accordingly, on April 27, 2007, we combined
the Legg Mason Partners Variable Investors--Class II Sub-Account into the
Legg Mason Partners Variable Investors--Class I Sub-Account.
(3)Morgan Stanley Investment Management Inc., the adviser to the UIF
Portfolios, does business in certain instances using the name Van Kampen.
141 PROSPECTUS
LBL6535-4
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