Merrill Corp - PLC Protective Dimensions N-4 06-07-2011 ED | cmashak | 21-Nov-11 15:14 | 11-14517-1.bc | Sequence: 1 CHKSUM Content: 60341 Layout: 59341 Graphics: 45971 CLEAN Protective Life Insurance Company Protective Variable Annuity Separate Account P.O. Box 10648 Birmingham, Alabama 35202-0648 Telephone: 1-800-456-6330 www.protective.com This Prospectus describes the Protective Dimensions Variable Annuity Contract, an individual flexible premium deferred variable and fixed annuity contract offered by Protective Life Insurance Company. The Contract is designed for investors who desire to accumulate capital on a tax deferred basis for retirement or other long term investment purposes. It may be purchased on a non-qualified basis or for use with certain qualified retirement plans. You generally may allocate your investment in the Contract to the Guaranteed Account (if it is available when you purchase your Contract) and the Sub-Accounts of the Protective Variable Annuity Separate Account. If you purchase a SecurePay rider, your options for allocating Purchase Payments and Contract Value will be restricted. (See “Protected Lifetime Income Benefits (“SecurePay”) With RightTime® Option.”) The Sub-Accounts invest in the following Funds: American Funds Insurance Series Franklin Small-Mid Cap Growth Securities MFS® Variable Insurance TrustSM Asset Allocation Fund-SC Fund, Class 2 Growth Series-SS Franklin Small Cap Value Securities Fund, Investors Growth Stock Series-SS AIM Variable Insurance Funds (Invesco Class 2 Investors Trust Series-SS Variable Insurance Funds) Franklin U.S. Government Fund, Class 2 New Discovery Series-SS Mutual Shares Securities Fund, Class 2 Invesco Van Kampen V.I. Balanced Risk Research Bond Series-SS Templeton Foreign Securities Fund, Class 2 Allocation Fund, Class II Research Series-SS Templeton Global Bond Securities Fund, Invesco Van Kampen V.I. Comstock Fund, Total Return Series-SS Class 2 Class II Utilities Series-SS Templeton Growth Securities Fund, Class 2 Invesco Van Kampen V.I. Equity and Income Value Series-SS Fund, Class II Invesco V.I. Government Securities Fund, Goldman Sachs Variable Insurance Trust Strategic Growth Fund, Service Class Oppenheimer Variable Account Funds Class II Large Cap Value Fund, Service Class Capital Appreciation Fund/VA-SS Invesco Van Kampen V.I. Growth and Growth Opportunities Fund, Service Class Global Securities Fund/VA-SS Income Fund, Class II MidCap Value Fund, Service Class Main Street Fund/VA-SS Invesco Van Kampen V.I. Mid Cap Growth Strategic International Equity Fund, Money Fund/VA Fund, Class II Service Class Global Strategic Income Fund/VA SS Invesco Van Kampen V.I. Mid Cap Value Fund, Class II Legg Mason Partners Variable Equity PIMCO Variable Insurance Trust Trust Long-Term US Government Fund, Fidelity® Variable Insurance Products ClearBridge Mid Cap Core Fund, Class II Advisor Class VIP Contrafund® Portfolio-SC`2 ClearBridge Small Cap Growth Fund, Low Duration Fund, Advisor Class VIP Index 500-SC2 Class II Real Return Fund, Advisor Class VIP Investment Grade Bond Portfolio-SC2 Short-Term Fund, Advisor Class VIP MidCap Portfolio-SC2 Lord Abbett Series Fund, Inc. Total Return Fund, Advisor Class Fundamental Equity Portfolio Franklin Templeton Variable Insurance Capital Structure Portfolio Royce Capital Fund Products Trust Bond-Debenture Portfolio Micro-Cap Fund, Service Class Franklin Flex Cap Growth Securities Fund, Growth and Income Portfolio Small-Cap Fund, Service Class Class 2 Growth Opportunities Portfolio Franklin Income Securities Fund, Class 2 International Opportunities Portfolio The Universal Institutional Funds, Inc. Franklin Rising Dividends Securities Fund, Classic Stock Portfolio Global Real Estate Portfolio Class II Class 2 Mid-Cap Value Portfolio The value of your Contract that is allocated to the Sub-Accounts will vary according to the investment performance of the Funds in which the selected Sub-Accounts are invested. You bear the investment risk on amounts you allocate to the Sub-Accounts. This Prospectus sets forth basic information about the Contract and the Variable Account that you should know before investing. The Statement of Additional Information, which has been filed with the Securities and Exchange Commission, contains additional information about the Contract and the Variable Account. The Statement of Additional Information has the same date as this Prospectus and is incorporated herein by reference. The Table of Contents for the Statement of Additional Information is on the last page of this Prospectus. You may obtain a copy of the Statement of Additional Information free of charge by writing or calling Protective Life at the address or telephone number shown above. You may also obtain an electronic copy of the Statement of Additional Information, as well as other material that we file electronically and certain material incorporated by reference, at the SEC web site (http://www.sec.gov). Please read this prospectus carefully. You should keep a copy for future reference. The Protective Dimensions Variable Annuity Contract is not a deposit or obligation of, or guaranteed by, any bank or financial institution. It is not insured by the Federal Deposit Insurance Corporation or any other government agency, and it is subject to investment risk, including the possible loss of principal. The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. The date of this Prospectus is December 1, 2011 PRO.DIMENSIONS.111 1 JOB: 11-14517-1 CYCLE#;BL#: 18; 0 TRIM: 8.25" x 10.75" COMPOSITE COLORS: Black, ~note-color 2 GRAPHICS: prot_dim_var_aty_logo.eps V1.5 Merrill Corp - PLC Protective Dimensions N-4 06-07-2011 ED | cmashak | 21-Nov-11 15:14 | 11-14517-1.bc | Sequence: 2 CHKSUM Content: 37866 Layout: 19486 Graphics: No Graphics CLEAN TABLE OF CONTENTS Page Annuity Income Payments . 70 Annuity Options . 72 DEFINITIONS . 3 Minimum Amounts. 72 FEES AND EXPENSES . 4 Death of Annuitant or Owner After Annuity Date . 72 SUMMARY . 8 YIELDS AND TOTAL RETURNS . 73 The Contract. 8 Yields . 73 Federal Tax Status. 12 Total Returns . 73 THE COMPANY, VARIABLE ACCOUNT AND FUNDS . 13 Standardized Average Annual Total Returns . 73 Protective Life Insurance Company . 13 Non-Standard Average Annual Total Returns. 74 Protective Variable Annuity Separate Account. 13 Performance Comparisons . 74 Administration . 14 Other Matters . 74 The Funds. 14 FEDERAL TAX MATTERS . 75 American Funds Insurance Series . 15 Introduction . 75 AIM Variable Insurance Funds (Invesco Variable The Company’s Tax Status. 75 Insurance Funds) . 15 TAXATION OF ANNUITIES IN GENERAL . 75 Fidelity® Variable Insurance Products . 16 Tax Deferral During Accumulation Period. 75 Franklin Templeton Variable Insurance Products Trust . 16 Taxation of Withdrawals and Surrenders . 76 Goldman Sachs Variable Insurance Trust . 17 Taxation of Annuity Payments . 77 Legg Mason Partners Variable Equity Trust. 18 Tax Consequences of SecurePay Riders. 77 Lord Abbett Series Fund, Inc.. 18 Taxation of Death Benefit Proceeds. 78 MFS® Variable Insurance Trust . 18 Oppenheimer Variable Account Funds . 19 Assignments, Pledges, and Gratuitous Transfers . 78 PIMCO Variable Insurance Trust . 20 Penalty Tax on Premature Distributions . 79 Royce Capital Fund . 20 Aggregation of Contracts . 79 The Universal Institutional Funds, Inc. 20 Exchanges of Annuity Contracts . 79 Selection of Funds . 21 Loss of Interest Deduction Where Contract Is Held Asset Allocation Model Portfolios . 21 by or for the Benefit of Certain Nonnatural Other Information about the Funds . 22 Persons . 80 Certain Payments We Receive with Regard to the Funds. 22 QUALIFIED RETIREMENT PLANS . 80 Certain Payments We Make with Regard to the Funds . 23 In General. 80 Other Investors in the Funds. 23 SecurePay . 82 Addition, Deletion or Substitution of Investments. 24 Direct Rollovers . 83 DESCRIPTION OF THE CONTRACT. 24 FEDERAL INCOME TAX WITHHOLDING . 83 The Contract. 24 GENERAL MATTERS . 83 Parties to the Contract . 25 Error in Age or Gender. 83 Issuance of a Contract . 26 Incontestability . 83 Purchase Payments . 26 Non-Participation . 84 Right to Cancel. 27 Assignment or Transfer of a Contract. 84 Allocation of Purchase Payments . 27 Notice . 84 Variable Account Value. 28 Modification. 84 Transfers . 29 Reports . 84 Surrenders and Withdrawals. 33 Settlement. 84 THE GUARANTEED ACCOUNT . 35 Receipt of Payment. 84 DEATH BENEFIT . 37 Protection of Proceeds . 84 PROTECTED LIFETIME INCOME BENEFITS Minimum Values. 84 (“SecurePay”) with RightTime® OPTION . 40 Application of Law. 85 SUSPENSION OR DELAY IN PAYMENTS . 63 No Default . 85 SUSPENSION OF CONTRACTS . 64 DISTRIBUTION OF THE CONTRACTS. 85 CHARGES AND DEDUCTIONS . 64 Selling Broker-Dealers . 85 Premium Based Charge . 64 Inquiries . 87 Surrender Charge . 65 CEFLI. ..