Protective Adds Variable Annuity Death Benefit to Fund Tax Burden; Earnings Enhancement Death Benefit.

Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--March 5, 2001

Protective Life Insurance Company (NYSE:PL) announces the addition of the Earnings Enhancement Death Benefit (EEDB) option to its line of variable annuities. This benefit is designed to partially fund taxes that may be owed by a beneficiary upon the annuity owner's death.

"Adding this benefit is part of our continuing strategy to provide excellent value to purchasers of our annuities. Investors have been concerned that on the death of an annuity owner, the beneficiary is likely to owe income taxes on any earnings in the annuity. Now, with the EEDB, we have addressed this issue," said Larry Merrill, National Marketing Director of Protective's Investment Products Division.

"By electing the optional EEDB before age 70, investors assure that their beneficiaries will receive an additional amount equal to 40% of gains earned in their Protective variable annuity contract since the election date, including gains paid as part of other death benefits in the contract. For investors who have reached age 70 prior to electing the EEDB, the amount will be 25% of gains. To keep the benefit affordable, the EEDB payment does have a ceiling, but this will not be reached until the contract has earned substantial gains," added Merrill. Election of the EEDB will increase the annuity's mortality and expense risk charge by 0.25%. The EEDB is not available to investors who are older than age 75 and is currently available only at the time an annuity contract is purchased.

With an annuity, income taxes are owed on earnings including amounts earned as a death benefit and EEDB. The Protective EEDB measures earnings up to the full amount of the underlying death benefit whereas many companies offering similar benefits only measure earnings based on an annuity's account value. With its design, Protective has more closely aligned its EEDB with the amounts that a beneficiary is likely to pay as income tax.

Other recent innovations from Protective include the Predetermined Death Benefit Payout option that allows an owner to determine how the beneficiary will receive the annuity's proceeds. With this option, owners can take comfort in knowing that a beneficiary may not have immediate access to the full amount of the death proceeds. Also, Protective now allows a surviving spousal beneficiary who continues a contract as a new owner to do so at the amount that would have been the death benefit, with the death benefit continuing in effect until the surviving spouse's death.

Protective's line of variable annuities includes the Protective Variable Annuity II, Elements(R) Plus, Elements(R) Access and Protective Advantage(SM). Variable annuities are issued by Protective Life Insurance Company (Protective) and are offered by the principal underwriter, Investment Distributors, Inc.(IDI). Protective and IDI are both subsidiaries of Protective Life Corporation (NYSE:PL) and are located at 2801 Highway 280 South, Birmingham, Alabama 35223. For more information about Protective or its variable annuities, including charges and expenses, obtain a prospectus by calling 800/628-6390. Read it carefully before you invest or send money.