SOUTHLAND SEPARATE ACCOUNT L1, S-6EL24/A, 1996-05-10

SOUTHLAND SEPARATE ACCOUNT L1
S-6EL24/A, 1996-05-10

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<PAGE>

As Filed with the Securities and Exchange Commission on May 10, 1996

Registration No. 33-97852

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Pre-Effective Amendment No. 2 to

FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2

SOUTHLAND SEPARATE ACCOUNT L1
(Exact name of trust)

SOUTHLAND LIFE INSURANCE COMPANY
(Name of depositor)

5780 Powers Ferry Road, N.W.
Atlanta, GA 30340
(Complete address of depositor's principal executive offices)

(Name and complete address
of agent for service) Copy to:
B. Scott Burton, Esq. Stephen E. Roth, Esq.
Associate General Counsel Sutherland, Asbill & Brennan
Southland Life Insurance Company 1275 Pennsylvania Avenue, N.W.
5780 Powers Ferry Road, N.W. Washington, DC 20004-2404
Atlanta, GA 30340

Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration Statement

Securities Being Offered: Individual Variable Life Insurance Contracts
Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the
Registrant has elected to register an indefinite amount of the securities being
offered. The $500 registration fee pursuant to Rule 24f-2 was paid with the
initial filing on October 6, 1995.

The Registrant hereby amends this Registration Statement on such dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

SOUTHLAND SEPARATE ACCOUNT L1
SOUTHLAND LIFE INSURANCE COMPANY

Cross Reference to Items Required by form N-8B-2

N-8B-2 Item Caption in Prospectus
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1 Cover Page
2 Cover Page
3 Not applicable
4 Distribution of the Policies
5 The Variable Account
6 The Variable Account
7 Not applicable
8 The Variable Account
9 Legal Proceedings
10 Summary and Diagram; Facts About the Policy; Withdrawals;
Surrenders; Your Right to Transfer; Right to Convert Policy;
Premiums and Allocations; Reinstatement; Voting Privileges;
Authority to Change Policy Terms
11 The Portfolios
12 The Portfolios
13 Policy Charges and Fees
14 Facts About the Policy
15 Premiums and Allocations -- Crediting Premiums
16 The Portfolios
17 Withdrawals; Surrenders; When We Make Payments
18 The Variable Account
19 Reports to Owners
20 Authority to Change Policy Terms; Other Policy Provisions
21 Policy Loans
22 Not applicable
23 Southland's Directors and Officers
24 Not applicable
25 Facts About Southland and the Variable Account
26 Policy Charges and Fees
27 Facts About Southland and the Variable Account
28 Southland's Directors and Officers
29 Facts About Southland and the Variable Account
30 Not applicable
31 Not applicable
32 Not applicable
33 Not applicable
34 Not applicable
35 Facts About Southland and the Variable Account
<PAGE>

36 Not applicable
37 Not applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
42 Not applicable
43 Not applicable
44 Subaccount Accumulation Value; Facts About the Policy
45 Not applicable
46 Subaccount Accumulation Value; Facts About the Policy
47 The Variable Account; The Portfolios
48 Facts About Southland and the Variable Account
49 Not applicable
50 Not applicable
51 Facts About the Policy; Distribution of the Policies
52 Changes Relating to the Variable Account
53 Federal Tax Considerations
54 Not applicable
55 Hypothetical Illustrations
56 Not applicable
57 Not applicable
58 Not applicable
59 Financial Statements
<PAGE>

A FLEXIBLE PREMIUM ADJUSTABLE COMBINATION FIXED AND
VARIABLE LIFE INSURANCE POLICY
issued by
Southland Life Insurance Company and
Southland Separate Account L1

5780 Powers Ferry Road, N.W., Atlanta, GA 30340
(770) 980-5100

This prospectus describes a flexible premium adjustable combination fixed and
variable life insurance policy (the "Policy") offered by Southland Life
Insurance Company ("Southland," "we," "us," or the "Company"). The Policy is
designed to provide lifetime insurance protection on the Insured named in the
Policy and at the same time provide flexibility to vary the amount and timing of
premiums and to change the amount of death benefits payable under the Policy.
This flexibility allows the purchaser ("you," "your," or the "Owner") to provide
for changing insurance needs under a single insurance policy.

The Owner may allocate net premiums and Policy values to one or more of the
Subaccounts of Southland Separate Account L1 (the "Variable Account") or to the
Guaranteed Interest Account, or to both within certain limits. Twenty-one (21)
Subaccounts are currently available under the Policy. The Subaccounts invest in
shares of corresponding Portfolios of The Alger American Fund, Fidelity Variable
Insurance Products Fund, Fidelity Variable Insurance Products Fund II, Janus
Aspen Series, and INVESCO Variable Investment Funds, Inc. The Guaranteed
Interest Account guarantees a minimum fixed rate of interest.

The Accumulation Value will vary daily with the investment results of the
Subaccounts and interest credited to any Guaranteed Interest Account
allocations. We do not guarantee any minimum Cash Surrender Value for amounts
allocated to the Subaccounts.

You can select from two death benefit options available under the Policy: a
level death benefit ("Stated Death Benefit or death benefit type A") and an
increasing death benefit ("Stated Death Benefit Plus Accumulation Value or death
benefit type B"). See "DEATH BENEFIT AND CHANGES IN DEATH BENEFIT TYPE,"
page 41. Southland guarantees that the death benefit will never be less than the
Stated Death Benefit (less any unrepaid policy loans and past due charges) so
long as the Policy is in force.

The Policy provides for a Cash Surrender Value that can be obtained by
surrendering the Policy. Because this value is based on the performance of the
Portfolios, to the extent of allocations to the Variable Account, there is no
guaranteed Cash Surrender Value. If the Cash Surrender Value is insufficient to
cover the charges due under the Policy, the Policy will lapse without value.
The Policy also provides for Policy loans and permits Withdrawals within
limits.

It may not be advantageous to replace existing insurance with the Policy.
Within certain limits, you may return the Policy or convert it to a life
insurance policy with benefits that do not vary with the investment results of a
separate account.
<PAGE>

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

This prospectus sets forth concisely the information you should know before
deciding to purchase a Policy. It should be retained for future reference.

This prospectus must be accompanied or preceded by current prospectuses for the
Portfolios. The Portfolio prospectuses should be read in conjunction with this
prospectus.
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page
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<S> <C>
DEFINITIONS............................................. 1

SUMMARY AND DIAGRAM..................................... 5

HISTORICAL PERFORMANCE INFORMATION...................... 10

HYPOTHETICAL ILLUSTRATIONS.............................. 18

FACTS ABOUT SOUTHLAND AND THE VARIABLE ACCOUNT.......... 22
THE VARIABLE ACCOUNT................................. 22
THE PORTFOLIOS....................................... 23
CHANGES RELATING TO THE VARIABLE ACCOUNT............. 26

FACTS ABOUT THE POLICY.................................. 27
PREMIUMS AND ALLOCATIONS............................. 27
YOUR ACCUMULATION VALUE.............................. 31
YOUR RIGHT TO TRANSFER............................... 34
DOLLAR COST AVERAGING FACILITY....................... 35
AUTOMATIC REBALANCING................................ 36
WITHDRAWALS.......................................... 37
SURRENDERS........................................... 39
POLICY LOANS......................................... 39
TELEPHONE PRIVILEGES................................. 41
DEATH BENEFIT AND CHANGES IN DEATH BENEFIT TYPE...... 41
MATURITY BENEFIT..................................... 44
PAYMENT OPTIONS...................................... 45
WHEN WE MAKE PAYMENTS................................ 45

THE GUARANTEED INTEREST ACCOUNT......................... 45

POLICY CHARGES AND FEES................................. 46
CHARGES DEDUCTED FROM PREMIUMS....................... 46
SURRENDER CHARGE..................................... 47
MONTHLY DEDUCTIONS FROM YOUR NET ACCUMULATION VALUE.. 50
OTHER ADMINISTRATIVE CHARGES......................... 52
CHARGES DEDUCTED FROM THE SUBACCOUNTS................ 53
PORTFOLIO EXPENSES................................... 53
PERSISTENCY REFUND................................... 54
GROUP OR SPONSORED ARRANGEMENTS...................... 55
</TABLE>

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<PAGE>

<TABLE>
<S> <C>
ADDITIONAL POLICY INFORMATION........................... 55
THE OWNER............................................ 55
THE BENEFICIARY...................................... 55
CHANGE OF OWNER OR BENEFICIARY....................... 56
RIGHT TO CONVERT POLICY.............................. 56
REINSTATEMENT........................................ 57
OTHER POLICY PROVISIONS.............................. 57
AUTHORITY TO CHANGE POLICY TERMS..................... 57

ADDITIONAL BENEFITS..................................... 58
ACCIDENTAL DEATH BENEFIT RIDER....................... 58
ADJUSTABLE TERM INSURANCE RIDER...................... 58
ADDITIONAL INSURED RIDER............................. 59
CHILDREN'S INSURANCE RIDER........................... 60
EXCHANGE OF INSURED RIDER............................ 60
GUARANTEED INSURABILITY RIDER........................ 60
WAIVER OF THE COST OF INSURANCE RIDER................ 60
WAIVER OF SPECIFIED PREMIUM RIDER.................... 60

FEDERAL TAX CONSIDERATIONS.............................. 61

OTHER INFORMATION....................................... 65
REPORTS TO OWNERS.................................... 65
DISTRIBUTION OF THE POLICIES......................... 65
VOTING PRIVILEGES.................................... 66
LEGAL PROCEEDINGS.................................... 67
SOUTHLAND'S DIRECTORS AND OFFICERS................... 68
EXPERTS.............................................. 70
LEGAL MATTERS........................................ 71
FINANCIAL STATEMENTS................................. 71
</TABLE>

This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. No person is authorized to make any
representations in connection with this offering other than those contained in
this prospectus.

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<PAGE>

DEFINITIONS

Accumulation Value: The "Accumulation Value" is the combined value of your
Policy in all of the Subaccounts of the Variable Account, the Guaranteed
Interest Account and the values held in the General Account to secure Policy
loans.

Adjustable Term Insurance Rider: The "Adjustable Term Insurance Rider" is
available to add death benefit coverage to your Policy. The amount of death
benefit coverage provided under this rider is the difference between the Base
Death Benefit and the Target Death Benefit.

Age: The Insured's "Age" at any time is his or her age on the birthday nearest
the Policy Date increased by the number of full Policy Years elapsed since the
Policy Date.

Base Death Benefit: The "Base Death Benefit" depends on the death benefit type
you choose. Under type A, the Base Death Benefit is the greater of Stated Death
Benefit or a multiple of the Accumulation Value on the date of the Insured's
death. Under type B, the Base Death Benefit is the greater of the Stated Death
Benefit plus the Accumulation Value, or a multiple of the Accumulation Value, on
the date of the Insured's death. See "DEATH BENEFIT AND CHANGES IN DEATH BENEFIT
TYPE," page 41.

Beneficiary: The "Beneficiary" is the person to whom the death benefit (payable
on the death of an Insured) is paid.

Cash Surrender Value: The "Cash Surrender Value" of the Policy on any Valuation
Day is the Net Accumulation Value minus any Surrender Charge that would apply
that day.

Code: The "Code" is the Internal Revenue Code of 1986, as amended.

Customer Service Center: The Southland "Customer Service Center" is the
Company's offices at P.O. Box 173789, Denver, CO 80217-3789. For overnight
delivery, the address is 8515 East Orchard Road, 9T2, Denver, CO 80111.

Death Benefit: The "Death Benefit" is the Base Death Benefit plus any
additional life insurance proceeds provided by any riders. If the Adjustable
Term Insurance Rider is in effect, the Death Benefit is equal to the Target
Death Benefit plus any additional life insurance proceeds provided by any other
riders.

Death Proceeds: The "Death Proceeds" are the proceeds payable to the
Beneficiary by us upon due proof of death of the Insured while the Policy is in
force equal to: [1] the Base Death Benefit (or Target Death Benefit, if
applicable); plus [2] any additional life insurance proceeds provided by any
riders; minus [3] any outstanding Policy Debt; minus [4] any monthly deductions
due and not yet deducted.

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<PAGE>

Free Look Period: The "Free Look Period" is the period during which you may
return the Policy and receive a refund or cancel an increase in Stated Death
Benefit. See "Free Look Period," page 28.

General Account: The "General Account" represents our corporate assets other
than those segregated in any separate account established by us.

Gross Withdrawal: A "Gross Withdrawal" is the total of the amount of a
Withdrawal plus any applicable Withdrawal Transaction Charge and any applicable
Surrender Charge.

Guaranteed Interest Account: The "Guaranteed Interest Account" is a part of our
General Account, to which a portion of the Accumulation Value may be allocated
and which provides guarantees of principal and interest.

Guaranteed Interest Account Accumulation Value: The "Guaranteed Interest
Account Accumulation Value" is the value under the Policy in the Guaranteed
Interest Account.

Insured: The "Insured" means the person upon whose life the Policy is
issued.

Monthly Processing Date: The "Monthly Processing Date" is the date each month
on which the monthly deductions from the Accumulation Value are deducted. See
"Monthly Deductions," page 50. The first Monthly Processing Date will be the
Policy Date or the date on which the initial Net Premium is allocated to your
Policy, if later. Subsequent Monthly Processing Dates will be the same date as
the Policy Date each month thereafter unless this is not a Valuation Day, in
which case the Monthly Processing Date occurs on the next Valuation Day.

Net Accumulation Value: The "Net Accumulation Value" on any Valuation Day is
the Accumulation Value on that day less Policy loans (and interest thereon) and
if other than the Monthly Processing Date, the monthly deduction that would be
deducted on the next Monthly Processing Date.

Net Premium: The "Net Premium" is the premium amount paid less any sales and
tax charges. These charges are deducted from each premium before the premium is
applied to your Accumulation Value.

No-Lapse Premium: The "No-Lapse Premium" is a benchmark monthly premium
calculated for each Policy based on the Age, sex and rate class of the Insured,
the requested Stated Death Benefit and any supplemental benefits. It is used
for purposes of the No-Lapse Guarantee.

No-Lapse Guarantee: The "No-Lapse Guarantee" refers to our guarantee to keep
the Policy in force during the first three Policy Years, regardless of the
sufficiency of the Cash Surrender Value, so long as total premiums paid, less
Withdrawals, are at least equal to the cumulative amount of No-Lapse Premiums
for the Policy months the Policy has been in force.

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<PAGE>

Owner: The "Owner" is the person(s) who owns the Policy and who is entitled to
exercise all rights and privileges provided in the Policy.

Policy Anniversary: The "Policy Anniversary" is the first day of each Policy
Year.

Policy Date: The "Policy Date" is shown on the Schedule and is the date the
Policy becomes effective.

Policy Debt: The "Policy Debt" is equal to unrepaid Policy loans (including
unpaid interest added to the loan) plus accrued interest not yet due.

Policy Year: Each "Policy Year" starts on the same day and month as the Policy
Date.

Portfolio: A "Portfolio" refers to a series of a mutual fund in which assets of
a corresponding Subaccount are invested.

SEC: The "SEC" is the Securities and Exchange Commission.

Stated Death Benefit: The "Stated Death Benefit" is a dollar amount used to
determine the death benefit under the Policy. On any day, it is the initial
Stated Death Benefit, as adjusted for any subsequent increases or decreases that
have taken effect.

Subaccount: A "Subaccount" is a subdivision of the Variable Account, the assets
of which are invested in a corresponding Portfolio.

Subaccount Accumulation Value: The "Subaccount Accumulation Value" is the value
under a Policy in a particular Subaccount.

Surrender: A "Surrender" is a Written Request for the Cash Surrender Value that
terminates the Policy.

Target Death Benefit: The "Target Death Benefit" is the death benefit specified
by the Owner when an Adjustable Term Insurance Rider is added to the
Policy.

Target Premium: The "Target Premium" refers to an annualized premium amount we
use to calculate the sales load charge, the sales surrender charge and the cost
of insurance charge. A Target Premium is determined for the Initial Stated
Death Benefit, and an additional Target Premium is determined for each increase
in Stated Death Benefit. The Target Premium generally is less than planned
premiums for a Policy Year. It may be more or less than the No-Lapse Premium
for a Policy Year, depending on the supplemental benefits added to the
Policy.

Valuation Day: For each Subaccount, a "Valuation Day" is each day on which the
New York Stock Exchange and Southland's Customer Service Center are both open
for business except for a

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day that a Subaccount's corresponding Portfolio does not value its shares. The
New York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, July
Fourth, Labor Day, Thanksgiving Day and Christmas Day. Southland's Customer
Service Center is normally not open on the following days: the Monday before
New Year's Day, July Fourth or Christmas Day, if any of these holidays falls on
a Tuesday; the Friday after New Year's Day, July Fourth or Christmas Day, if any
of these holidays falls on a Thursday; and the Friday after Thanksgiving
Day.

Valuation Period: A "Valuation Period" begins at 4:00 p.m. Eastern time on a
Valuation Day and ends at 4:00 p.m. Eastern time on the next succeeding
Valuation Day.

We, us, our, Southland and the Company: "We," "us," "our," "Southland," and
"the Company" refer to Southland Life Insurance Company.

Withdrawal: A "Withdrawal" refers to the surrender of a portion of the Net
Accumulation Value.

Written Notice or Written Request: A "Written Notice" or "Written Request" is a
notice or request in a form satisfactory to the Company which is signed by the
Owner and received at the Customer Service Center.

You and your: "You" and "your" refer to the Owner of the Policy.

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<PAGE>

SUMMARY AND DIAGRAM

The following summary of prospectus information and diagram of the Policy should
be read in conjunction with the detailed information appearing elsewhere in this
prospectus. Unless otherwise indicated, the description of the Policy in this
prospectus assumes that the Policy is in force and there is no outstanding
Policy Debt.

The Policy is similar in many ways to fixed-benefit life insurance. As with
fixed-benefit life insurance, the Owner of a Policy pays premiums for insurance
coverage on the person insured. Also like fixed-benefit life insurance, the
Policy provides for accumulation of Net Premiums and a Cash Surrender Value that
is payable if the Policy is surrendered during the Insured's lifetime. As with
fixed-benefit life insurance, the Cash Surrender Value during the early Policy
Years may be substantially lower than the premiums paid.

However, the Policy differs from fixed-benefit life insurance in several
important respects. Unlike fixed-benefit life insurance, the Death Benefit of a
Policy may, and the Accumulation Value will, increase or decrease to reflect the
investment performance of the Subaccounts to which Accumulation Value is
allocated. Also, there is no guaranteed minimum Cash Surrender Value.
Nonetheless, Southland guarantees to keep the Policy in force during the first
three (3) Policy Years so long as the No-Lapse Premium requirement has been met
and Policy Debt is not excessive. See "THREE-YEAR GUARANTEE," page 29.
Otherwise, if the Cash Surrender Value is insufficient to pay charges due, the
Policy will lapse without value after a grace period. See "PREMIUMS TO PREVENT
LAPSE," page 30.

Purpose of the Policy

The Policy is designed to be a long-term investment providing significant
insurance benefits. The Policy should be considered in conjunction with other
insurance policies owned by the Owner. It may not be advantageous to replace
existing insurance policies with the Policy.

Tax Considerations

Southland intends for the Policy to satisfy the definition of a life insurance
contract under section 7702 of the Code. Under certain circumstances, a Policy
could be treated as a "modified endowment contract." Southland will monitor
Policies and will attempt to notify an Owner on a timely basis if his or her
Policy is in jeopardy of becoming a modified endowment contract. For further
discussion of the tax status of a Policy and the tax consequences of being
treated as a life insurance contract or a modified endowment contract, see
"FEDERAL TAX CONSIDERATIONS," page 61.

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<PAGE>

Free Look Period and Conversion Right

For a limited time after the Policy is issued, you have the right to cancel your
Policy and receive a refund equal to all premiums paid. See "FREE LOOK PERIOD,"
page 28. Until the end of this limited period, Net Premiums paid will be
invested in the Subaccount investing in the VIP Money Market Portfolio. See
"NET PREMIUM ALLOCATIONS," page 31. For a limited time after an increase in
Stated Death Benefit takes effect, you have the right to cancel the increase.
See "Changes in Stated Death Benefit," page 43. At any time within the first
24 Policy Months (or first 24 Policy Months after an increase in Stated Death
Benefit), you may convert your Policy to a flexible premium (non-variable)
adjustable life insurance policy. See "RIGHT TO CONVERT POLICY," page 56.

Owner Inquiries

If you have any questions, you may write to us at the Customer Service Center or
call us at (800) 224-3035.

Diagram

The following diagram illustrates how the Policy works.

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DIAGRAM OF POLICY

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PREMIUM PAYMENTS
* You select a payment plan but are not required to pay premiums according to
the plan. You can vary the amount and frequency and can skip planned
premiums. See "Planned Premiums" for rules and limits.

* Minimum initial premium and planned premium depend on the Insured's Age, sex,
underwriting class, Stated Death Benefit selected, and any supplemental
riders.

* Unplanned premiums may be made, within limits. See "Premiums."

* Under certain circumstances, extra premiums may be required to prevent lapse.
See "Premiums to Prevent Lapse."
- --------------------------------------------------------------------------------

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DEDUCTIONS FROM PREMIUMS
* For sales load (4% of premiums up to an amount equal to 10 Target Premiums
and, after an increase in Stated Death Benefit, 4% of premiums up to 10
Target Premiums for that increase).
* For state premium tax (2.5% of premiums).
* For DAC tax (1.5% of premiums). See "Policy Charges and Fees."
- --------------------------------------------------------------------------------

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NET PREMIUMS
* You direct the allocation of Net Premiums among 21 Subaccounts of the
Variable Account and the Guaranteed Interest Account. See "Net Premium
Allocations" for rules and limits and applicable charges.

* The Subaccounts invest in corresponding portfolios ("Funds") of The Alger
American Fund ("Alger"), Fidelity Variable Insurance Products Fund ("VIP
Fund"), Fidelity Variable Insurance Products Fund II ("VIP Fund II"), Janus
Aspen Series ("Janus"), and INVESCO Variable Investment Funds ("INVESCO").
See "The Portfolios." Funds available are:
<TABLE>
<S> <C>
Alger - American Small Capitalization Portfolio Fidelity - VIP Fund II -Asset Manager Portfolio
Alger - American MidCap Growth Portfolio Fidelity - VIP Fund II - Index 500 Portfolio
Alger - American Growth Portfolio Janus - Growth Portfolio
Alger - American Leveraged AllCap Portfolio Janus - Aggressive Growth Portfolio
Fidelity - VIP Fund - High Income Portfolio Janus - Worldwide Growth Portfolio
Fidelity - VIP Fund - Money Market Portfolio Janus - International Growth Portfolio
Fidelity - VIP Fund - Equity-Income Portfolio Janus - Balanced Portfolio
Fidelity - VIP Fund - Growth Portfolio Janus - Short-term Bond Portfolio
Fidelity - VIP Fund - Contrafund Portfolio INVESCO - Industrial Income Portfolio
Fidelity - VIP Fund - Overseas Portfolio INVESCO - Utilities Portfolio
Fidelity - VIP Fund - Investment Grade Bond Portfolio
</TABLE>

* Interest is credited on amounts allocated to the Guaranteed Interest Account
at a minimum guaranteed rate of 3.5%. See "The Guaranteed Interest Account"
and "Your Right to Transfer" for rules and limits on Guaranteed Interest
Account allocations.
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DEDUCTIONS FROM ASSETS

* Monthly deduction for cost of insurance, $20 initial monthly charge during
the first Policy Year, $6 monthly charge for administrative expenses, and
supplemental benefit charges. See "Policy Charges and Fees."

* Daily charge at an annual rate of 0.90% from assets in the Subaccounts for
mortality and expense risks. See "Charges Deducted From the Subaccounts."
This charge is not deducted from Guaranteed Interest Account Accumulation
Value.

* Investment advisory fees and fund expenses are deducted from the assets
of each Fund. See "Portfolio Expenses."
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ACCUMULATION VALUE
* Is the amount in the Subaccounts and in the Guaranteed Interest Account
credited to your Policy plus the values held in the General Account to secure
Policy Debt. It is equal to Net Premiums, as adjusted each Valuation Day to
reflect Subaccount investment experience, interest credited on any Guaranteed
Interest Account allocations, charges deducted and other Policy transactions
(such as Policy loans, transfers and withdrawals). See "Your Accumulation
Value," "Guaranteed Interest Account Accumulation Value," and "Subaccount
Accumulation Value."

* Varies from day to day. There is no minimum guaranteed Accumulation Value.
The Policy may lapse if the Cash Surrender Value is insufficient to cover the
monthly deduction then due.

* Accumulation Value can be transferred among the Subaccounts and the
Guaranteed Interest Account. See "Your Right to Transfer" for rules and
limits. Policy loans reduce the amount available for allocations and
transfers.

* Dollar cost averaging and automatic rebalancing programs are available. See
"Dollar Cost Averaging Facility" and "Automatic Rebalancing."

* Accumulation Value is the starting point for calculating certain values under
a Policy, such as the Cash Surrender Value, Net Accumulation Value, and the
Death Benefit used to determine Death Proceeds.

* A persistency refund may be credited each month the Policy or a coverage
segment of Stated Death Benefit remains in force after the tenth Policy
Anniversary. The persistency refund is equivalent to 0.35% on an annualized
basis (0.02917% monthly) of the Net Accumulation Value for that segment.
- -----------------------------------------------------------------------------

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- ------------------------------ --------------------------------
CASH BENEFITS DEATH BENEFITS
* Loans may be taken for * Death benefit should
amounts up to 90% of Cash be excludable from the
Surrender Value, at a gross income of the
maximum net interest rate Beneficiary. See "Tax
of 6%. See "Policy Treatment of Policy
Loans" and "Tax Treatment Benefits."
of Policy Benefits."
* Available as lump sum
* Withdrawals generally or under a variety of
can be made up to 12 payment options. See
times a Policy Year "Payment Options."
provided there is
sufficient remaining Cash * Minimum Death Benefit
Surrender Value. A available is $100,000.
Withdrawal transaction
charge equal to the * Death Benefit is
lesser of $25 or 2% of equal to Base Death
the amount requested for Benefit plus any
Withdrawal will apply to additional insurance
each Withdrawal after the provided by rider. If the
first in a Policy Year. Adjustable Term Insurance
See "Withdrawals" and Rider is in effect, the
"Withdrawal Transaction Death Benefit is equal to
Charge" for rules and the Target Death Benefit
limits. If a Withdrawal plus any additional life
results in a decrease in insurance proceeds provided
Stated Death Benefit by any other riders. See
during the first 14 "Additional Benefits."
Policy Years or first 14
years following an * Base Death Benefit
increase in Stated Death available in two death
Benefit, a portion of the benefit types: type A
Sales Surrender Charge (larger of Stated Death
may be deducted from Net Benefit or a multiple of
Accumulation Value. See Accumulation Value); or
"Surrender Charge." type B (larger of Stated
Death Benefit plus
* Payment options are Accumulation Value or a
available. See "Payment multiple of Accumula tion
Options." Value). See "Death
Benefit and Changes in
* The Policy can be Death Benefit Type."
surrendered at any time
for its Cash Surrender * Flexibility to change
Value (Accumulation Value Stated Death Benefit and
minus Policy Debt, any to change Death Benefit
applicable Surrender type. See "Death Benefit
Charge and the next and Changes in Death
monthly deduction). Benefit Type" for rules
and limits.
* The surrender charge
consists of an * A surrender charge
administrative surrender will apply if Stated
charge and a sales Death Benefit is
surrender charge. The decreased upon a
administrative surrender requested decrease or
charge is $4.00 per withdrawal or on
$1,000 of Stated Death surrender of the Policy,
Benefit (or increase in if, in any case, it
Stated Death Benefit) for occurs within 14 Policy
the first nine Policy Years after the Policy
Years (or first nine was issued or 14 years
years following an after an increase in
increase in Stated Death Stated Death Benefit.
Benefit), and decreases See "Surrender Charge."
annually during the
following five years to
$0. The sales surrender
charge is equal to 50% of
actual premiums paid up
to one Target Premium
plus 40% of any
additional premiums paid
up to two additional
Target Premiums for the
Stated Death Benefit (or
increase) during the
first nine Policy Years
(or the first nine years
following an increase in
Stated Death Benefit),
and decreases annually
during the following five
years to 0%. In any
case, the maximum sales
surrender charge for each
death benefit segment is
equal to 130% of one
Target Premium (50% of
one Target Premium plus
40% of each of two
additional Target
Premiums) for the death
benefit segment.
However, during the first
two Policy Years (or two
years following an
increase in Stated Death
Benefit), the sales
surrender charge is
limited to 26% of
premiums paid up to one
Target Premium, plus 6%
of premi ums paid between
one and two Target
Premiums, and 5% of any
other premiums paid. The
sales surrender charge
deducted on a Surrender
of a Policy takes into
account any portion of
the sales surrender
charge deducted on a
prior decrease in Stated
Death Benefit.
- --------------------------- ----------------------------

-9-
<PAGE>

HISTORICAL PERFORMANCE INFORMATION

The following information demonstrates how the historical investment experience
of the Portfolio underlying each Subaccount of the Variable Account would have
affected the Cash Surrender Value, Accumulation Value and Death Benefit of a
hypothetical Policy if issued on the date the Portfolio commenced operations.
The historical illustrations should be distinguished from the hypothetical
illustrations, which follow, which are based on assumed rates of return for the
30 years illustrated, rather than historical returns of the Portfolios. The
"average annual total return" of a Portfolio shown below refers to the income
generated by the Portfolio, net of Portfolio operating expenses, plus capital
gains or losses, realized or unrealized, expressed on an annual basis, and has
been calculated in accordance with SEC standardized rules. "Annual total
return" is the actual year-by-year results of the Portfolio's performance and is
calculated in the same manner as average annual total return except that it is
limited to the return for the one year period ended on the date shown. Average
annual total return reflects the hypothetical annually compounded return that
would have produced the same cumulative return as the Portfolio achieved if the
Portfolio's performance had been constant over the entire period. The
calculation of average annual total return and annual total return assumes the
investment of all dividends and other distributions in additional shares of the
Portfolio. Because average annual total returns tend to smooth out variations in
the return of a Portfolio, they are not the same as actual year-by-year results.
Average annual total return and annual total return figures are based on
historical earnings and are not intended to indicate future performance.

The following illustrations are based on the payment of a $4,500 annual premium,
paid at the beginning of each year, for a hypothetical Policy with a $250,000
Stated Death Benefit, death benefit type A, issued to a standard, non-tobacco
male, Age 45. In each case, it is assumed that all premiums are and remain
allocated to the Subaccount illustrated for the periods shown and that no Policy
loans or Withdrawals are made during the periods shown. The amounts shown for
the Cash Surrender Value, Accumulation Value and Death Benefit take into account
the charges against premiums and monthly deductions (based on current cost of
insurance charges) for the hypothetical Policy, the daily charge against the
Variable Account for mortality and expense risks, and the Portfolio's charges
and expenses during the years shown. See "POLICY CHARGES AND FEES," page 46.
They are calculated as of the end of each yearly period shown.

Non-Tobacco Male, Age 45 Guideline Premium Test
Preferred Risk Class Death Benefit Option 1
Stated Death Benefit $250,000 Annual Premium $4,500

- -----------------------------------------------
Alger American Small Capitalization Portfolio
- -----------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 44.31%
5 years ended 12/31/95: 20.59%
Since inception (9/21/88): 22.60%
</TABLE>

-10-
<PAGE>

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- --------
<S> <C> <C> <C> <C>
12/31/89 64.48% $ 5,266 $ 3,296 $250,000
12/31/90 8.71% 9,158 6,938 250,000
12/31/91 57.54% 19,553 15,403 250,000
12/31/92 3.55% 23,389 19,239 250,000
12/31/93 13.28% 29,953 25,803 250,000
12/31/94 -4.38% 31,454 27,304 250,000
12/31/95 44.31% 49,872 45,722 250,000
</TABLE>
- ----------------------------------------
Alger American MidCap Growth Portfolio
- ----------------------------------------

Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 44.45%
Since inception (5/3/93): 29.02%
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/94 5.30% $ 7,891 $ 5,671 $250,000
12/31/95 44.45% 16,064 11,914 250,000
</TABLE>

- ----------------------------------------
Alger American Growth Portfolio
- ----------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 36.37%
5 years ended 12/31/95: 21.73%
Since inception (9/21/88): 19.44%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/89 1.30% $ 3,024 $ 1,054 $250,000
12/31/90 1.69% 6,270 4,050 250,000
12/31/91 0.52% 9,409 5,259 250,000
12/31/92 0.33% 12,523 8,373 250,000
12/31/93 22.47% 19,185 15,035 250,000
12/31/94 1.45% 22,533 18,383 250,000
12/31/95 36.37% 34,998 30,848 250,000

</TABLE>

-11-
<PAGE>

- -------------------------------------------
Alger American Leveraged AllCap Portfolio
- -------------------------------------------

Portfolio Cumulative Total Return:
Since inception (1/25/95) through 12/31/95: 74.30%

- -------------------------------------------
Fidelity - VIP Fund - Money Market
Portfolio
- -------------------------------------------

Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 5.87%
5 years ended 12/31/95: 4.66%
10 years ended 12/31/95: 6.09%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/85 8.11% $ 3,263 $ 1,293 $250,000
12/31/86 6.70% 6,855 4,635 250,000
12/31/87 6.44% 10,610 6,460 250,000
12/31/88 7.39% 14,719 10,569 250,000
12/31/89 9.12% 19,425 15,275 250,000
12/31/90 8.04% 24,285 20,135 250,000
12/31/91 6.09% 28,967 24,817 250,000
12/31/92 3.90% 33,240 29,090 250,000
12/31/93 3.23% 37,554 33,404 250,000
12/31/94 4.25% 42,404 38,946 250,000
12/31/95 5.87% 48,520 45,752 250,000
</TABLE>

- ---------------------------------------------
Fidelity - VIP Fund - High Income Portfolio
- ---------------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 20.72%
5 years ended 12/31/95: 18.92%
Since inception (9/10/85): 11.47%
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/86 17.68% $ 3,600 $ 1,630 $250,000
12/31/87 1.22% 6,819 4,599 250,000
12/31/88 11.64% 11,111 6,961 250,000
12/31/89 -4.17% 13,564 9,414 250,000
12/31/90 -2.23% 16,232 12,082 250,000

</TABLE>

-12-
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
12/31/91 35.08% 26,196 22,046 250,000
12/31/92 23.17% 36,050 31,900 250,000
12/31/93 20.40% 47,077 42,927 250,000
12/31/94 -1.64% 49,299 45,149 250,000
12/31/95 20.72% 63,282 59,824 250,000

</TABLE>
- ------------------------------------------
Fidelity - VIP Fund - Equity-Income
Portfolio
- ------------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 35.09%
5 years ended 12/31/95: 21.32%
Since inception (10/9/86): 13.33%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/87 -1.13% $ 2,939 $ 969 $250,000
12/31/88 22.71% 7,558 5,338 250,000
12/31/89 17.34% 12,565 8,415 250,000
12/31/90 -15.29% 13,164 9,014 250,000
12/31/91 31.44% 21,464 17,314 250,000
12/31/92 16.89% 28,685 24,535 250,000
12/31/93 18.29% 37,530 33,380 250,000
12/31/94 7.07% 43,389 39,239 250,000
12/31/95 35.09% 62,932 58,782 250,000

</TABLE>

- ------------------------------------------
Fidelity - VIP Fund - Growth Portfolio
- ------------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 35.36%
5 years ended 12/31/95: 20.78%
Since inception (10/9/86): 14.83%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/87 3.66% $ 3,107 $ 1,137 $250,000
12/31/88 15.58% 7,284 5,064 250,000
12/31/89 31.51% 13,785 9,635 250,000
12/31/90 -11.73% 14,806 10,656 250,000
12/31/91 45.51% 26,194 22,044 250,000
12/31/92 9.32% 31,939 27,789 250,000

</TABLE>

-13-
<PAGE>

- -------------------------------------
Fidelity - VIP Fund - Overseas
Portfolio
- -------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 9.74%
5 years ended 12/31/95: 8.13%
Since inception (1/28/87): 7.31%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ----- --------- -------
<S> <C> <C> <C> <C>
12/31/88 8.13% $ 3,263 $ 1,293 $250,000
12/31/89 26.28% 8,200 5,980 250,000
12/31/90 -1.67% 11,081 6,931 250,000
12/31/91 8.00% 15,312 11,162 250,000
12/31/92 -10.72% 16,337 12,187 250,000
12/31/93 37.35% 26,788 22,638 250,000
12/31/94 1.72% 30,287 26,137 250,000
12/31/95 9.68% 36,556 32,406 250,000
</TABLE>

- --------------------------------------------------
Fidelity - VIP II Fund - Investment Grade Bond
Portfolio
- --------------------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 17.32%
5 years ended 12/31/95: 9.23%
Since inception (12/5/88): 8.29%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ------------ --------- -------
<S> <C> <C> <C> <C>
12/31/89 10.26% $ 3,338 $ 1,368 $250,000
12/31/90 6.21% 6,901 4,681 250,000
12/31/91 16.38% 11,699 7,549 250,000
12/31/92 6.65% 15,770 11,620 250,000
12/31/93 10.96% 20,920 16,770 250,000
12/31/94 -3.76% 23,014 18,864 250,000
12/31/95 17.32% 30,600 26,450 250,000
</TABLE>

-14-
<PAGE>

- -----------------------------------------
Fidelity - VIP II Fund - Asset Manager
Portfolio
- -----------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 16.96%
5 years ended 12/31/95: 12.76%
Since inception (9/6/89): 11.24%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ------------ ------ ------------ --------- -------
<S> <C> <C> <C> <C>
12/31/90 6.72% $ 3,214 $ 1,244 $250,000
12/31/91 22.56% 7,884 5,664 250,000
12/31/92 11.71% 12,301 8,151 250,000
12/31/93 21.23% 18,718 14,568 250,000
12/31/94 -6.09% 20,389 16,239 250,000
12/31/95 16.96% 27,451 23,301 250,000
</TABLE>

- -----------------------------------------------
Fidelity - VIP II Fund - Index 500 Portfolio
- -----------------------------------------------

Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 37.19%
Since inception (8/27/92): 15.54%

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
----------- ------ ------------ --------- -------
<S> <C> <C> <C> <C>
12/31/93 9.74% $ 3,320 $1,350 $250,000
12/31/94 1.04% 6,525 4,305 250,000
12/31/95 37.19% 13,366 9,216 250,000
</TABLE>
- ----------------------------------------------------------
Fidelity - VIP II Fund - Contrafund
- ----------------------------------------------------------

Portfolio Cumulative Total Return:
Since inception (1/3/95) through 12/31/95: 39.72%

- ----------------------------------------------------------
INVESCO Utilities Portfolio
- ----------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
Portfolio Average Annual Total Return for:
1 year ended 12/31/95: 9.08%
Since inception (1/1/95): 9.08%
</TABLE>

-15-
<PAGE>

- --------------------------------------
INVESCO Industrial Income Portfolio
- --------------------------------------
<TABLE>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 29.25%
Since inception (8/10/94): 20.89%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ------------ --------- -------
<S> <C> <C> <C> <C>
12/31/95 29.25% $4,009 $2,039 $250,000
</TABLE>

- --------------------------------
Janus Growth Portfolio
- --------------------------------
<TABLE>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 30.17%
Since inception (9/14/93): 15.25%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ------------ -------- -------
<S> <C> <C> <C> <C>
12/31/94 2.76% $3,075 $1,105 $250,000
12/31/95 30.17% 8,223 6,003 250,000
</TABLE>

- --------------------------------------
Janus Aggressive Growth Portfolio
- --------------------------------------
<TABLE>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 27.48%
Since inception (9/14/93): 27.68%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ----------- --------- -------
<S> <C> <C> <C> <C>
12/31/94 16.33% $3,552 $1,582 $250,000
12/31/95 27.48% 8,648 6,428 250,000
</TABLE>

- -------------------------------------
Janus Worldwide Growth Portfolio
- -------------------------------------
<TABLE>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 27.37%
Since inception (9/14/93): 20.74%
</TABLE>

-16-
<PAGE>

<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/94 1.53% $3,032 $1,062 $250,000
12/31/95 27.37% 7,981 5,761 250,000
</TABLE>

- -----------------------------------------
Janus International Growth Portfolio
- -----------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 23.15%
Since inception (5/2/94): 11.39%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/95 23.15% $3,793 $1,823 $250,000
</TABLE>

- --------------------------------
Janus Balanced Portfolio
- --------------------------------
<TABLE>
<CAPTION>
<S> <C>
Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 24.79%
Since inception (9/14/93): 13.96%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/94 0.84% $3,008 $1,038 $250,000
12/31/95 24.79% 7,780 5,560 250,000
</TABLE>

- ---------------------------------
Janus Short-Term Bond Portfolio
- ---------------------------------
<TABLE>
<CAPTION>
<S> <C>

Portfolio Average Annual Total
Return for:
1 year ended 12/31/95: 9.54%
Since inception (9/14/93): 4.61%
</TABLE>
<TABLE>
<CAPTION>
Cash
Annual Total Accumulation Surrender Death
Year Ended: Return Value Value Benefit
- ----------- ------ ----- ----- -------
<S> <C> <C> <C> <C>
12/31/94 0.92% $3,010 $1,040 $250,000
12/31/95 9.54% 6,775 4,555 250,000
</TABLE>

-17-
<PAGE>

HYPOTHETICAL ILLUSTRATIONS

The following illustrations have been prepared to show how certain values under
a hypothetical Policy would change with varying levels of investment performance
over an extended period of time. In particular, the illustrations show how
Policy Values, Cash Surrender Values and Death Benefits under a Policy covering
an Insured of the male sex, non-tobacco and Age 45 on the Policy Date, would
vary over time if planned premiums were paid annually and the return on the
assets in the Funds were a uniform gross annual rate (before any expenses) of
0%, 6% or 12%. The illustrations also show values if planned premiums were
instead accumulated at 5% interest. The hypothetical investment rates of return
are for purposes of illustration only and should not be deemed a representation
of past or future investment rates of return. Actual rates of return for a
particular Policy may be more or less than the hypothetical investment rates of
return and will depend on a number of factors including the investment
allocations made by an Owner, prevailing rates and rates of inflation. Also,
values would be different from those shown if the gross annual investment
returns averaged 0%, 6%, and 12% over a period of years but fluctuated above and
below those averages for individual Policy Years.

The illustrations assume that the assets in the Funds are subject to an annual
expense ratio of 0.9033% of the average daily net assets. This annual expense
ratio is based on the average of the expense ratios of each of the Portfolios
available under the Policies for the last fiscal year and take into account
current expense reimbursement arrangements. For information on Portfolio
expenses, see the prospectuses for the Portfolios accompanying this prospectus.

The illustrations also reflect the deduction of sales load, premium tax and DAC
tax charges from premiums and the monthly administrative and cost of insurance
charges from Accumulation Value for the hypothetical Insured. Our current cost
of insurance charges and the higher guaranteed maximum cost of insurance charges
we have the contractual right to charge are reflected in separate illustrations
on each of the following pages. All the illustrations reflect the fact that no
other charges for federal or state income taxes are currently made against the
Variable Account and assume no Policy Debt or charges for supplemental benefits.
In particular, the illustrations assume that no Adjustable Term Insurance Rider
is in effect.

In addition, the illustrations reflect the daily charge to the Variable Account
for Southland's assumption of mortality and expense risks, which is equivalent
to an effective annual charge of 0.90%. The current assumption illustrations
also reflect monthly application of the persistency refund that is equal to
0.35% (on an annualized basis) of the Variable Accumulation Value for Policies
held for more than 10 years. After deduction of Portfolio expenses and the
mortality and expense risk charge, the illustrated gross annual investment rates
of return of 0%, 6% and 12% would correspond to approximate net annual rates
of -1.79%, 4.16% and 10.10%, respectively for years one through ten and
thereafter, -1.44%, 4.51%, and 10.45%, respectively. The guaranteed assumption
illustrations do not reflect the application of the persistency refund and
therefore the approximate net annual rates for the Variable Account do not
change after year 10. Net annual rates of return for the Variable Account are
not equal to net annual rates of return for the Policy because the Variable
Account rates do not reflect all changes to the Policy.

The illustrations are based on our sex distinct rates for non-tobacco users.
Upon request, we will furnish a comparable illustration based upon the proposed
Insured's individual circumstances. Such illustrations may assume different
hypothetical rates of return than those illustrated in the following
illustrations.
-18-
<PAGE>

FUTURE DIMENSIONS VUL

Male Age 45, Preferred Non-Tobacco, Band 2, Death Benefit Type A
Assuming Current Charges
<TABLE>
<CAPTION>
--- End of Policy Year ---
- ------------------------------------------------------------------------------------------------------------------------------------
Duration Attained Age Premium Paid Accumulation Value Cash Surrender Value Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 2,947 $ 977 $250,000
2 46 4,500 6,023 3,803 250,000
3 47 4,500 9,026 4,876 250,000
4 48 4,500 11,985 7,835 250,000
5 49 4,500 14,903 10,753 250,000
6 50 4,500 17,779 13,629 250,000
7 51 4,500 20,614 16,464 250,000
8 52 4,500 23,448 19,298 250,000
9 53 4,500 26,380 22,230 250,000
10 54 4,500 29,269 25,812 250,000
11 55 4,500 32,421 29,653 250,000
12 56 4,500 35,446 33,371 250,000
13 57 4,500 38,329 36,946 250,000
14 58 4,500 41,069 40,376 250,000
15 59 4,500 43,665 43,665 250,000
16 60 4,500 46,103 46,103 250,000
17 61 4,500 48,370 48,370 250,000
18 62 4,500 50,452 50,452 250,000
19 63 4,500 52,330 52,330 250,000
20 64 4,500 53,984 53,984 250,000
21 65 4,500 55,391 55,391 250,000
22 66 4,500 56,577 56,577 250,000
23 67 4,500 57,521 57,521 250,000
24 68 4,500 58,200 58,200 250,000
25 69 4,500 58,590 58,590 250,000
26 70 4,500 58,661 58,661 250,000
27 71 4,500 58,388 58,388 250,000
28 72 4,500 57,738 57,738 250,000
29 73 4,500 56,674 56,674 250,000
30 74 4,500 55,142 55,142 250,000

Age 65 4,500 53,984 53,984 250,000

Gross Investment Rate: 0.00%

</TABLE>

The hypothetical investment rates of return shown above are illustrative only
and should not be deemed a representation of past or future investment rates of
return. Actual rates of return may be more or less than those shown and will
depend on a number of factors, including the investment allocations made by an
Owner and the investment experience of the Portfolios. The Death Benefit,
investment value and Cash Surrender Value for a Policy would be different from
those shown if the actual gross annual rates of return averaged 0%, 6% or 12%
over a period of years, but also fluctuated above or below those averages for
individual Policy Years. They would also be different if any Policy loans or
Withdrawals were made. No representations can be made by Southland Life
Insurance Company or the Variable Account or the Portfolios that these
hypothetical rates of return can be achieved for any one year or sustained over
a period of time.

-19-
<PAGE>

FUTURE DIMENSIONS VUL

Male Age 45, Preferred Non-Tobacco, Band 2, Death Benefit TYPE A
Assuming Current Charges
<TABLE>
<CAPTION>
--- End of Policy Year ---
- ------------------------------------------------------------------------------------------------------------------------------------
Duration Attained Age Premium Paid Accumulation Value Cash Surrender Value Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 3,157 $ 1,187 $250,000
2 46 4,500 6,635 4,415 250,000
3 47 4,500 10,239 6,089 250,000
4 48 4,500 14,008 9,858 250,000
5 49 4,500 17,948 13,798 250,000
6 50 4,500 22,066 17,916 250,000
7 51 4,500 26,372 22,222 250,000
8 52 4,500 30,915 26,765 250,000
9 53 4,500 35,811 31,661 250,000
10 54 4,500 40,390 37,472 250,000
11 55 4,500 46,619 43,851 250,000
12 56 4,500 52,496 50,421 250,000
13 57 4,500 58,555 57,173 250,000
14 58 4,500 64,809 64,116 250,000
15 59 4,500 71,267 71,267 250,000
16 60 4,500 77,931 77,931 250,000
17 61 4,500 84,807 84,807 250,000
18 62 4,500 91,900 91,900 250,000
19 63 4,500 99,214 99,214 250,000
20 64 4,500 106,757 106,757 250,000
21 65 4,500 114,538 114,538 250,000
22 66 4,500 122,604 122,604 250,000
23 67 4,500 130,975 130,975 250,000
24 68 4,500 139,676 139,676 250,000
25 69 4,500 148,734 148,734 250,000
26 70 4,500 158,186 158,186 250,000
27 71 4,500 168,078 168,078 250,000
28 72 4,500 178,463 178,463 250,000
29 73 4,500 189,406 189,406 250,000
30 74 4,500 200,981 200,981 250,000

Age 65 4,500 106,757 106,757 250,000

Gross Investment Rate: 6.00%
</TABLE>

-20-
<PAGE>

FUTURE DIMENSIONS VUL

MALE AGE 45, PREFERRED NON-TOBACCO, BAND 2, DEATH BENEFIT TYPE A
ASSUMING CURRENT CHARGES
<TABLE>
<CAPTION>

--- End of Policy Year ---
- ------------------------------------------------------------------------------------------------------------------------------------
Cash
Duration Attained Age Premium Paid Accumulation Value Surrender Value Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 3,368 $ 1,398 $250,000
2 46 4,500 7,272 5,052 250,000
3 47 4,500 11,556 7,406 250,000
4 48 4,500 16,289 12,139 250,000
5 49 4,500 21,520 17,370 250,000
6 50 4,500 27,301 23,151 250,000
7 51 4,500 33,690 29,540 250,000
8 52 4,500 40,794 36,644 250,000
9 53 4,500 48,800 44,650 250,000
10 54 4,500 57,647 54,190 250,000
11 55 4,500 67,810 65,043 250,000
12 56 4,500 78,990 76,915 250,000
13 57 4,500 91,288 89,906 250,000
14 58 4,500 104,838 104,146 250,000
15 59 4,500 119,787 119,787 250,000
16 60 4,500 136,296 136,296 250,000
17 61 4,500 154,550 154,550 250,000
18 62 4,500 174,764 174,764 250,000
19 63 4,500 197,187 197,187 250,000
20 64 4,500 222,037 222,037 250,000
21 65 4,500 249,418 249,418 250,000
22 66 4,500 279,567 279,567 250,000
23 67 4,500 312,760 312,760 250,000
24 68 4,500 349,301 349,301 250,000
25 69 4,500 389,523 389,523 250,000
26 70 4,500 433,796 433,796 250,000
27 71 4,500 482,622 482,622 250,000
28 72 4,500 536,507 536,507 250,000
29 73 4,500 596,023 596,023 250,000
30 74 4,500 661,821 661,821 250,000

Age 65 4,500 222,037 222,037 250,000

Gross Investment Rate: 12.00%
</TABLE>

FUTURE DIMENSIONS VUL

MALE AGE 45, PREFERRED NON-TOBACCO, BAND 2, DEATH
BENEFIT TYPE A
ASSUMING GUARANTEED CHARGES

--- End of Policy Year ---
- -------------------------------------------------------------------------------------------------
Accumulation Cash
Duration Attained Age Premium Paid Value Surrender Value Death Benefit
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 2,945 $ 975 $250,000
2 46 4,500 6,020 3,800 250,000
3 47 4,500 8,982 4,832 250,000
4 48 4,500 11,828 7,678 250,000
5 49 4,500 14,554 10,404 250,000
6 50 4,500 17,157 13,007 250,000
7 51 4,500 19,625 15,475 250,000
8 52 4,500 21,986 17,836 250,000
9 53 4,500 24,329 20,179 250,000
10 54 4,500 26,499 23,041 250,000
11 55 4,500 28,484 25,716 250,000
12 56 4,500 30,271 28,196 250,000
13 57 4,500 31,855 30,473 250,000
14 58 4,500 33,225 32,532 250,000
15 59 4,500 34,358 34,358 250,000
16 60 4,500 35,233 35,233 250,000
17 61 4,500 35,826 35,826 250,000
18 62 4,500 36,099 36,099 250,000
19 63 4,500 36,010 36,010 250,000
20 64 4,500 35,510 35,510 250,000
21 65 4,500 34,553 34,558 250,000
22 66 4,500 33,098 33,098 250,000
23 67 4,500 31,091 31,091 250,000
24 68 4,500 28,478 28,478 250,000
25 69 4,500 25,180 25,180 250,000
26 70 4,500 21,081 21,081 250,000
27 71 4,500 15,891 15,891 250,000
28 72 4,500 9,692 9,692 250,000
29 73 4,500 2,093 2,093 250,000
30 74 LAPSE LAPSE LAPSE LAPSE

Age 65 4,500 35,510 35,510 250,000

Gross Investment Rate: 0.00%
</TABLE>

THE EXPENSE CHARGES AND COST OF INSURANCE RATES WILL NEVER BE GREATER THAN THOSE
USED TO CALCULATE THE ABOVE VALUES. THE HYPOTHETICAL INVESTMENT RATES OF RETURN
SHOWN ABOVE ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER AND THE INVESTMENT EXPERIENCE OF THE
PORTFOLIOS. THE DEATH BENEFIT, INVESTMENT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF
RETURN AVERAGED 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE
OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE
DIFFERENT IF ANY POLICY LOANS OR WITHDRAWALS WERE MADE. NO REPRESENTATIONS CAN
BE MADE BY SOUTHLAND LIFE INSURANCE COMPANY OR THE VARIABLE ACCOUNT OR THE
PORTFOLIOS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER A PERIOD OF TIME.

FUTURE DIMENSIONS VUL

MALE AGE 45, PREFERRED NON-TOBACCO, BAND 2, DEATH
BENEFIT TYPE A
ASSUMING GUARANTEED CHARGES
<TABLE>
<CAPTION>

--- End of Policy Year ---
- ------------------------------------------------------------------------------------------
Accumulation Cash
Duration Attained Age Premium Paid Value Surrender Value Death Benefit
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 3,156 $ 1,186 $250,000
2 46 4,500 6,632 4,412 250,000
3 47 4,500 10,194 6,044 250,000
4 48 4,500 13,844 9,694 250,000
5 49 4,500 17,577 13,427 250,000
6 50 4,500 21,397 17,247 250,000
7 51 4,500 25,293 21,143 250,000
8 52 4,500 29,299 25,149 250,000
9 53 4,500 33,515 29,365 250,000
10 54 4,500 37,790 34,333 250,000
11 55 4,500 42,118 39,351 250,000
12 56 4,500 46,491 44,416 250,000
13 57 4,500 50,908 49,526 250,000
14 58 4,500 55,365 54,673 250,000
15 59 4,500 59,849 59,849 250,000
16 60 4,500 64,347 64,347 250,000
17 61 4,500 68,847 68,847 250,000
18 62 4,500 73,327 73,327 250,000
19 63 4,500 77,762 77,762 250,000
20 64 4,500 82,125 82,125 250,000
21 65 4,500 86,395 86,395 250,000
22 66 4,500 90,556 90,556 250,000
23 67 4,500 94,591 94,591 250,000
24 68 4,500 98,480 98,480 250,000
25 69 4,500 102,197 102,197 250,000
26 70 4,500 105,694 105,694 250,000
27 71 4,500 108,819 108,819 250,000
28 72 4,500 111,662 111,662 250,000
29 73 4,500 114,039 114,039 250,000
30 74 4,500 115,839 115,839 250,000

Age 65 4,500 82,125 82,125 250,000

Gross Investment Rate: 6.00%
</TABLE>

FUTURE DIMENSIONS VUL

MALE AGE 45, PREFERRED NON-TOBACCO, BAND 2, DEATH
BENEFIT TYPE A
ASSUMING GUARANTEED CHARGES

<TABLE>
<CAPTION>
--- End of Policy Year ---
- ------------------------------------------------------------------------------------------
Accumulation Cash
Duration Attained Age Premium Paid Value Surrender Value Death Benefit
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 45 $4,500 $ 3,367 $ 1,397 $250,000
2 46 4,500 7,270 5,050 250,000
3 47 4,500 11,509 7,359 250,000
4 48 4,500 16,118 11,968 250,000
5 49 4,500 21,129 16,979 250,000
6 50 4,500 26,583 22,433 250,000
7 51 4,500 32,515 28,365 250,000
8 52 4,500 39,012 34,862 250,000
9 53 4,500 46,237 42,087 250,000
10 54 4,500 54,105 50,647 250,000
11 55 4,500 62,682 59,914 250,000
12 56 4,500 72,043 69,968 250,000
13 57 4,500 82,283 80,901 250,000
14 58 4,500 93,506 92,814 250,000
15 59 4,500 105,826 105,826 250,000
16 60 4,500 119,377 119,377 250,000
17 61 4,500 134,319 134,319 250,000
18 62 4,500 150,833 150,833 250,000
19 63 4,500 169,138 169,138 250,000
20 64 4,500 189,499 189,499 250,000
21 65 4,500 212,235 212,235 250,000
22 66 4,500 237,285 237,285 250,000
23 67 4,500 264,685 264,685 250,000
24 68 4,500 294,652 294,652 250,000
25 69 4,500 327,425 327,425 250,000
26 70 4,500 363,257 363,257 250,000
27 71 4,500 402,553 402,553 250,000
28 72 4,500 445,763 445,763 250,000
29 73 4,500 493,314 493,314 250,000
30 74 4,500 545,751 545,751 250,000

Age 65 4,500 189,499 189,499 250,000

Gross Investment Rate: 12.00%
</TABLE>

-21-
<PAGE>

FACTS ABOUT SOUTHLAND AND THE VARIABLE ACCOUNT

Southland Life Insurance Company is a stock life insurance company organized
under the laws of the State of Texas in 1908. Our headquarters are located at
5780 Powers Ferry Road, N. W., Atlanta, Georgia 30327-4390. We are admitted
to do business in the District of Columbia and all states except New York and
Vermont. Southland intends to sell the Policy in all states except Alabama, New
York and Vermont. Our total assets exceeded $1.8 billion, and our shareholder's
equity exceeded $386 million on a generally accepted accounting principles basis
as of December 31, 1995. (See Financial Statements.) We offer a complete line
of life insurance and retirement products, including annuities, individual and
group life, and pension products.

Southland may from time to time publish in advertisements, sales literature, and
reports to Owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's, Moody's, and Duff & Phelps. The purpose of the ratings is to reflect
the financial strength and/or claims-paying ability of Southland and should not
be considered as bearing on the investment performance of assets held in the
Variable Account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings.
These ratings reflect their current opinion of the relative financial strength
and operating performance of an insurance company in comparison to the norms of
the life/health insurance industry. In addition, the claims-paying ability of
Southland as measured by Standard & Poor's Insurance Ratings Services, Moody's,
or Duff & Phelps may be referred to in advertisements or sales literature or in
reports to Owners. These ratings are opinions of an operating insurance
company's financial capacity to meet the obligations of its insurance and
annuity policies in accordance with their terms, including its obligations under
the Guaranteed Interest Account provisions of this Contract. Such ratings do
not reflect the investment in the Variable Account.

Southland is a wholly-owned indirect subsidiary of Internationale Nederlanden
Group, N.V. ("ING"), one of the world's five largest diversified financial
services organizations. ING is headquartered in The Hague, Netherlands and has
consolidated assets exceeding $247.2 billion as of December 31, 1995.

THE VARIABLE ACCOUNT

All obligations under the Policy are general obligations of Southland. The
Variable Account is a separate investment account used to support our variable
life policies and for other purposes as permitted by applicable laws and
regulations. The assets of the Variable Account are our property, but are kept
separate from our General Account and our other variable accounts. We may offer
other variable life insurance policies supported by the Variable Account that
are not discussed in this prospectus. The Variable Account may also invest in
other portfolios that are not available to the Policy described in this
Prospectus.

-22-
<PAGE>

Income, gains and losses, realized or unrealized, from assets in the Variable
Account are credited to or charged against the Variable Account without regard
to other income, gains or losses of the Company. That portion of the assets of
the Variable Account which is equal to the reserves and other Policy liabilities
with respect to the Variable Account is not chargeable with liabilities arising
out of any other business Southland may conduct. It may, however, be subject to
liabilities arising from Subaccounts whose assets are attributable to other
variable life insurance policies offered by the Variable Account. If the assets
exceed the required reserves and other Policy liabilities, we may transfer the
excess to our General Account. The assets in the Variable Account will at all
times, equal or exceed the sum of the Subaccount Accumulation Values of all
Policies supported by the Variable Account.

The Variable Account was established on February 25, 1994, and may invest in
mutual funds or other investment portfolios which we determine to be suitable
for the Policy's purposes. The Variable Account meets the definition of a
separate account under federal securities laws. It is registered with the SEC
under the Investment Company Act of 1940 (the "1940 Act") as a unit investment
trust. Such registration does not involve any supervision by the SEC of the
management of the Variable Account or Southland. It is governed by the laws of
Texas, our state of domicile, and may also be governed by laws of other states
in which we do business. We have established other separate accounts, of which
Southland Separate Account A1 is registered with the SEC under the 1940 Act.

The Variable Account has twenty-one (21) Subaccounts, each of which invests in
shares of a corresponding Portfolio. Therefore, the investment experience of
your Policy depends on the experience of the Subaccounts you select. These
Portfolios are available only to serve as the underlying investment for variable
life insurance policies and variable annuity contracts issued through separate
accounts of Southland as well as other life insurance companies, and in some
cases, directly to certain qualified plans. They are not available directly to
investors.

THE PORTFOLIOS

Each Subaccount invests in a corresponding Portfolio. See the Prospectus for
each of the Portfolios being considered for details.

Shares of these Portfolios are sold to separate accounts of insurance companies,
which may or may not be affiliated with Southland or each other, a practice
known as "shared funding." They are also sold to separate accounts to serve as
the underlying investment for both variable life insurance policies and variable
annuity contracts, a practice known as "mixed funding." Shares also may be sold
directly to qualified pension and retirement plans. There is a possibility that
a material conflict may arise between the interests of Owners of our Policies,
whose Accumulation Values are allocated to a Subaccount investing in a
Portfolio, and of owners of other policies whose accumulation values are also
allocated to a separate account investing in that Portfolio, between the
interests of policyowners generally, or between certain classes of policyowners,
and retirement plans or participants in such retirement plans. In the event of
any such material

-23-
<PAGE>

conflict, Southland will consider what action may be appropriate, including
removing the Portfolio from the Variable Account or replacing the Portfolio with
another portfolio. There are certain risks associated with mixed and shared
funding and with the sale of shares to qualified pension and retirement plans,
as disclosed in the prospectuses for those Portfolios who sell to such plans.

Each of the Portfolios is a separate series of an open-end diversified
management investment company (mutual fund) which receives investment advice
from one or more registered investment advisers. The Portfolios as well as
their investment objectives are described below. There is no guarantee that any
Portfolio will meet its investment objectives. Meeting objectives depends on
various factors, including, in certain cases, how well the portfolio manager
anticipates changing economic and market conditions.

Southland may receive compensation from an affiliate(s) of certain of the
Portfolios based upon an annual percentage of the average assets held in that
Portfolio by Southland. These amounts are intended to compensate Southland for
administrative and other services provided by Southland to the Portfolios and/or
the affiliate(s).

Please refer to the prospectus for each of the Portfolios you are considering
for more information. A description of the objectives and investments of each
Portfolio follows:

The Alger American Fund

Alger American Small Capitalization Portfolio--seeks long-term capital
appreciation by investing at least 65% of its total assets in equity securities
of companies that, at the time of purchase of the securities, have total market
capitalization within the range of companies included in the Russell 2000 Growth
Index, updated quarterly.

Alger American Growth Portfolio--seeks long-term capital appreciation by
investing in a diversified, actively managed portfolio of equity securities,
primarily of companies with total market capitalization of $1 billion or
greater.

Alger American MidCap Growth Portfolio--seeks long-term capital appreciation by
investing at least 65% of its total assets in equity securities of companies
that, at the time of purchase of the securities, have total market
capitalization within the range of companies included in the S&P MidCap 400
Index, updated quarterly.

Alger American Leveraged AllCap Portfolio--seeks long-term capital appreciation
by investing in a diversified, actively managed portfolio of equity securities.
The Portfolio may engage in leveraging (up to 33-1/3% of its assets) and options
and futures transactions, which are deemed to be speculative and which may cause
the Portfolio's net asset value to be more volatile than the net asset value of
a fund that does not engage in these activities.

-24-
<PAGE>

Variable Insurance Products Fund ("VIP") &
Variable Insurance Products Fund II ("VIP II")

VIP Money Market Portfolio--seeks as high a level of current income as is
consistent with preserving capital and providing liquidity. The Portfolio will
invest only in high quality U.S. dollar-denominated money market securities of
domestic and foreign issuers.

VIP High Income Portfolio--seeks high income by investing primarily in high-
yielding, lower-rated, fixed-income securities. Growth of capital is also
considered in security selection.

VIP Equity-Income Portfolio--seeks reasonable income by investing primarily in
income-producing equity securities. In selecting investments, the Portfolio
also considers potential for capital appreciation.

VIP Growth Portfolio--seeks capital appreciation by investing primarily in
common stocks, although the Portfolio is not limited to any one type of
security.

VIP Overseas Portfolio--seeks long-term growth of capital primarily through
investments in foreign securities. It provides a means for investors to
diversify their own portfolios by participating in companies and economies
outside of the United States.

VIP II Investment Grade Bond Portfolio--seeks to obtain as high a level of
current income as is consistent with the preservation of capital by investing
primarily in a broad range of investment-grade fixed income securities.

VIP II Asset Manager Portfolio--seeks high total return with reduced risk over
the long term by allocating its assets among domestic and foreign stocks, bonds,
and short-term fixed-income instruments.

VIP II Index 500 Portfolio--seeks to provide investment results that correspond
to the total return (i.e., the combination of capital changes and income) of
common stocks publicly traded in the United States. In seeking this objective,
the Portfolio attempts to duplicate the composition and total return of the
Standard & Poor's Composite Index of 500 Stocks while keeping transaction costs
and other expenses low. The Portfolio is designed as a long-term investment
option.

VIP II Contrafund Portfolio--seeks capital appreciation by investing mainly in
equity securities of companies that are considered undervalued or out-of-favor
by the Portfolio's manager.

-25-
<PAGE>

INVESCO Variable Investment Funds, Inc.

Industrial Income Portfolio--seeks the best possible current income while
following sound investment practices. Capital growth potential is an
additional, but secondary, consideration in the selection of portfolio
securities. The Portfolio seeks to achieve its investment objective by
investing in securities which will provide a relatively high yield and stable
return and which, over a period of years, also may provide capital appreciation.

Utilities Portfolio--seeks capital appreciation and income through investments
primarily in equity securities of corporations principally engaged in the public
utilities business.

Janus Aspen Series

Growth Portfolio--is a diversified fund that seeks long-term growth of capital
by investing primarily in common stocks, with an emphasis on companies with
larger market capitalizations.

Aggressive Growth Portfolio--is a non-diversified Portfolio that seeks long-term
growth of capital by investing primarily in common stocks, with an emphasis on
securities issued by medium-sized companies.

Worldwide Growth Portfolio--a diversified Portfolio that seeks long-term growth
of capital by investing primarily in common stocks of foreign and domestic
issuers.

International Growth Portfolio--a diversified Portfolio that seeks long-term
growth of capital by investing primarily in common stocks of foreign issuers.

Balanced Portfolio--is a diversified Portfolio that seeks a long-term growth of
capital balanced by current income. The Portfolio normally invests 40-60% of its
assets in securities selected primarily for their growth potential and 40-60% of
its assets in securities selected primarily for their income potential.

Short-Term Bond Portfolio--a diversified Portfolio that seeks a high level of
current income while minimizing interest rate risk while investing in shorter
term fixed-income securities. Its average weighted maturity is normally less
than three years.

CHANGES RELATING TO THE VARIABLE ACCOUNT

We may, from time to time, make the following changes, subject to obtaining any
required approvals from the SEC and any insurance regulatory authorities:

(1) create new separate accounts for the Policy;

(2) combine separate accounts, including the Variable Account;

-26-
<PAGE>

(3) add new Subaccounts to or remove existing Subaccounts from the Variable
Account or combine Subaccounts;

(4) make new Subaccounts or other Subaccounts available to such classes of
policies or contracts as we may determine;

(5) add new Portfolios or remove existing Portfolios;

(6) if shares of a Portfolio are no longer available for investment or if we
determine that investment in a Portfolio is no longer appropriate in light
of the purposes of the Variable Account, substitute a different Portfolio
for any existing Portfolio;

(7) deregister the Variable Account under the 1940 Act if such registration is
no longer required;

(8) operate the Variable Account as a management investment company under the
1940 Act or as any other form permitted by law; and

(9) make any changes to the Variable Account or its operations as may be
required by the 1940 Act or other applicable law or regulations.

Owners will be notified of any changes.

FACTS ABOUT THE POLICY

PREMIUMS AND ALLOCATIONS

Applying for a Policy

If you want to purchase a Policy, you must complete an application and submit it
to one of our authorized agents. You also must pay an initial premium at least
equal to the minimum required. See "Premiums," below. Your initial premium can
be submitted with the application or at a later date, but Policy coverage will
not become effective until the Policy is delivered to you and the initial
premium in good order is received at our Customer Service Center while the
Insured is alive and prior to any change in health as shown in the application.

We require satisfactory evidence of the Insured's insurability, which may
include a medical examination of the Insured. Generally, we will issue a Policy
covering an Insured up to age 75 if evidence of insurability satisfies our
underwriting rules. We may, in our sole discretion, issue a Policy covering an
Insured over age 75. Acceptance of an application depends on our underwriting
rules, and we reserve the right to reject an application for any reason.

-27-
<PAGE>

When you complete an application, you select a premium payment plan (see
"Planned Premiums," below), designate Net Premium allocation percentages (see
"Net Premium Alloca tions," below), and select the Initial Stated Death Benefit
(subject to a minimum of $100,000) and Death Benefit type (see "DEATH BENEFIT
AND CHANGES IN DEATH BENEFIT TYPE," page 41). You also may apply for
supplemental benefits (see "ADDITIONAL BENEFITS," page 58), dollar cost
averaging (see "DOLLAR COST AVERAGING FACILITY," page 35), and telephone
transfer privileges (see "TELEPHONE PRIVILEGES," page 41).

Free Look Period

You may cancel your Policy during your "free-look" period. This period expires
20 days after you receive your Policy, 45 days after your application is signed,
or 10 days after we mail or deliver a notice of withdrawal right, whichever is
latest. The Policy will be deemed to be received by you 15 days after it is
mailed from the Customer Service Center. If you decide to cancel the Policy, you
must return it by mail or other delivery to our Customer Service Center or to
our authorized agent who sold it. Immediately after mailing or delivering it to
our Customer Service Center or authorized agent, the Policy will be deemed void
from the beginning. The amount of the refund will equal the premiums paid. This
refund will be paid within seven days after our Customer Service Center receives
your cancellation request and Policy.

You also may cancel an increase in Stated Death Benefit during your "free-look"
period for the increase. The period will expire 20 days after you receive a new
schedule for your Policy reflecting the increase, 45 days after your application
for the increase is signed, or 10 days after we mail or deliver a notice of
withdrawal right for the increase, whichever is latest. If you cancel an
increase, we will refund to your Accumulation Value any charges deducted that
are attributable to the increase (e.g., sales load and cost of insurance
----
charges) and adjust the Stated Death Benefit.

Premiums

The minimum initial premium required depends on a number of factors, such as the
Age, sex and risk class of the proposed Insured, the desired Stated Death
Benefit, any supplemental benefits and the planned premiums you propose to make.
In any event, the initial premium must be at least equal to two No-Lapse
Premiums. See "Planned Premiums" and "Premiums to Prevent Lapse," below.
Sample minimum initial premiums are shown in Appendix A.

Additional premiums may be paid in any amount and at any time, subject to the
following limits. First, a premium must be at least $100 and must be sent to
our Customer Service Center. We may require satisfactory evidence of
insurability before accepting any premium which would result in an increase in
the difference between the Accumulation Value and the Death Benefit.

Second, we reserve the right to limit total premiums paid in a Policy Year to
the planned premiums selected (see "Planned Premiums," below). In addition,
total premiums paid in a Policy Year may not exceed guideline premium
limitations for life insurance set forth in Section

-28-
<PAGE>

7702 of the Code or any successor provision thereto. We will refund any portion
of any premium that is determined to be in excess of the premium limit
established by law to qualify a Policy as life insurance. (The amount refunded
will be the excess premium plus any gain attributable to the excess premium.)
In addition, we will monitor Policies and will attempt to notify the Owner on a
timely basis if his or her Policy is in jeopardy of becoming a modified
endowment contract under the Code. See "FEDERAL TAX CONSIDERATIONS," page 61.

Lastly, no premium will be accepted after the Maturity Date.

If you have a Policy loan outstanding, any payment submitted other than a
planned premium will be treated as a loan repayment unless you indicate
otherwise when submitting the payment. (See "POLICY LOANS," page 39). If no
Policy loan is outstanding, any payment submitted by you is treated as a premium
payment.

Planned Premiums

When applying for a Policy, you select a plan for paying level premiums at
specified intervals, e.g., monthly, quarterly, semi-annually or annually, until
the Maturity Date. You are not required to pay premiums in accordance with this
plan; rather, you can pay more or less than planned or skip a planned premium
entirely. You can change the amount and frequency of planned premiums whenever
you want by sending a Written Request specifying the requested change to our
Customer Service Center. However, we reserve the right to limit the amount of a
premium or the total premiums paid, as discussed above. We will send you
reminder notices for planned premiums, unless you have arranged to pay planned
premiums by pre-authorized checking account deductions.

Three-Year Guarantee

We guarantee that a Policy will remain in force during the first three Policy
Years, regardless of the sufficiency of the Cash Surrender Value, if the total
premiums paid less any Withdrawals and Policy Debt are greater than the No-Lapse
Premium multiplied by the number of months the Policy has been in force. The No-
Lapse Premium for your Policy generally will be less than the monthly amount of
planned premiums you select to pay. The above is tested on each Monthly
Processing Date. If the Net Accumulation Value is less than or equal to zero,
the charges will be temporarily deferred until the Net Accumulation Value is
positive. Whenever the Net Accumulation Value becomes positive, a portion or all
of the charges deferred will be deducted from the Accumulation Value. This
process will continue until the end of the Three-Year Guarantee period. If there
is a balance of deferred charges at the end of this period and there is not
sufficient Accumulation Value to pay such charges, a grace period will begin.
The Three-Year Guarantee will not prevent the termination of the Policy if the
Cash Surrender Value becomes insufficient because of excessive Policy Debt. See
"POLICY LOANS," page 39.

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<PAGE>

Premiums upon Increase in Stated Death Benefit

Depending on the Accumulation Value at the time of an increase in the Stated
Death Benefit and the amount of the increase requested, an additional premium or
change in the amount of planned premiums may be advisable. See "CHANGES IN
STATED DEATH BENEFIT," page 43. We will notify you if an additional premium is
necessary or a change appropriate.

If you increase your Policy's Stated Death Benefit during the first three Policy
Years, we will extend the Three-Year Guarantee (see above) to three years after
the effective date of the increase.

Premiums to Prevent Lapse

Failure to pay planned premiums will not necessarily cause a Policy to lapse.
Conversely, paying all planned premiums will not necessarily guarantee that a
Policy will not lapse (except when the Three-Year Guarantee is in effect).
Rather, whether a Policy lapses depends on whether its Cash Surrender Value is
insufficient to cover the monthly deduction when due.

If the Cash Surrender Value on a Monthly Processing Date is less than the amount
of the monthly deduction to be deducted on that date (See "MONTHLY DEDUCTIONS
FROM NET ACCUMULATION VALUE") and the Three-Year Guarantee is not in effect, the
Policy will be in default and a grace period will begin. This could happen if
investment experience has been sufficiently unfavorable that it has resulted in
a decrease in the Cash Surrender Value or the Cash Surrender Value has decreased
because insufficient premiums have been paid to offset the monthly deductions.

Grace Period

If your Policy goes into default, you will be allowed a 61-day grace period to
pay a premium sufficient to cover past due charges plus an amount sufficient to
keep the Policy and any riders in force for two (2) months following receipt.
We will send notice of the amount required to be paid during the grace period
("grace period premium") to your last known address and to any assignee of
record. The grace period will begin when the notice is sent. Your Policy will
remain in effect during the grace period. If the Insured should die during the
grace period before the grace period premium is paid, the Death Benefit will
still be payable to the Beneficiary, although the amount paid will reflect a
reduction for the monthly deductions due on or before the date of the Insured's
death. See "Amount of Death Proceeds," page 41. If the grace period premium
is not paid before the grace period ends, your Policy will lapse. It will have
no value and no benefits will be payable, although for a limited period you will
have the right to reinstate your Policy. See "REINSTATEMENT," page 57.

A grace period also may begin if Policy Debt becomes excessive. See "POLICY
LOANS," page 39.

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Net Premium Allocations

In the application, you specify the percentage of Net Premium to be allocated to
each Subaccount or the Guaranteed Interest Account. The sum of your allocations
must equal 100%, and each allocation percentage must be a whole number of at
least 5%. Net Premiums received that are directed to be invested in the
Guaranteed Interest Account are allocated to that Account. However, until the
Free Look Period expires, all Net Premiums allocated to a Subaccount are
invested in the Subaccount investing in the VIP Money Market Portfolio (the
"Money Market Subaccount"). At the end of this period, the Accumulation Value
in the Money Market Subaccount is transferred to and allocated to the
Subaccounts based on the net premium allocation percentages in the application.
See "Free Look Period," page 28.

The Net Premium allocation percentages specified in the application will apply
to subsequent premiums until you change them. You can change the allocation
percentages at any time provided they total 100% and each is a whole number, by
sending a Written Notice specifying the new allocation percentage to our
Customer Service Center. The change will apply to all premiums received with or
after our receipt of your Written Notice. If you change your Net Premium
allocation percentages more than five times during a Policy Year, we have the
right to deduct a $25 charge proportionally from your Subaccount Accumulation
Values and Guaranteed Interest Account Accumulation Value as of the Valuation
Day the allocation change is effective. See "OTHER ADMINISTRATIVE CHARGES."

Crediting Premiums

The initial Net Premium will be credited to the Policy as of the Policy Date or
the date it is received at our Customer Service Center, if later. Planned
premiums and unplanned premiums not requiring additional underwriting will be
credited to the Policy and the resulting Net Premiums will be allocated on the
Valuation Day the premium is received by our Customer Service Center in
accordance with the Net Premium allocation percentages then in effect. However,
any premium requiring additional underwriting will be allocated to the Money
Market Subaccount until underwriting has been completed and the premium has been
accepted. When accepted, the Accumulation Value in the Money Market Subaccount
attributable to the resulting Net Premium will be credited to the Policy and
allocated to the Subaccounts and Guaranteed Interest Account in accordance with
the Net Premium allocation percentages then in effect. If an additional premium
is rejected, we will return the premium, without any adjustment for investment
experience.

YOUR ACCUMULATION VALUE

The Accumulation Value of your Policy is the sum of Variable Accumulation Value
and the Guaranteed Interest Account Accumulation Value and any values held in
the General Account to secure policy loans. The Variable Accumulation Value is
the sum of all the Subaccount Accumulation Values.

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Subaccount Accumulation Value

The Subaccount Accumulation Value for any Subaccount as of the Policy Date is
equal to the amount of the initial Net Premium allocated to that Subaccount.

On subsequent Valuation Days, the amount of the Subaccount Accumulation Value is
calculated as:

2. Any additional Net Premiums allocated to that Subaccount during the current
Valuation Period; plus

3. Any Accumulation Value transferred to the Subaccount during the current
Valuation Period (including any amounts released from the Policy Loan
Account and allocated to that Subaccount during the current Valuation
Period); minus

4. Any Accumulation Value transferred from the Subaccount during the current
Valuation Period (including any amounts transferred to the Policy Loan
Account and the portion of any Excess Transfer Charge allocated to the
Subaccount during the current Valuation Period); minus

5. The portion of any Gross Withdrawals allocated to that Subaccount during the
current Valuation Period (including the portion of the Surrender Charge
resulting from a decrease in Stated Death Benefit allocated to the
Subaccount during the current Valuation Period); minus

6. The portion of the monthly deduction allocated to such Subaccount, if a
Monthly Processing Date occurs during the current Valuation Period.

Accumulation Unit Value. Net Premiums allocated to a Subaccount or amounts
transferred to a Subaccount are converted into Accumulation Units. For any
Subaccount, the number of Accumulation Units credited is determined by dividing
the dollar amount directed to the Subaccount by the value of the Accumulation
Unit for that Subaccount for the Valuation Period on which the Net Premium is
received or the transfer is effective. In this manner, an increase in
Subaccount Accumulation Value under a Policy occurs by the addition of
Accumulation Units of that Subaccount.

The Accumulation Unit Value for each Subaccount was arbitrarily set initially at
$10 when the Subaccount began investing in the underlying Portfolio.
Thereafter, for any Subaccount, the Accumulation Unit Value for a

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Valuation Period equals the Accumulation Unit Value for the preceding Valuation
Period multiplied by the Accumulation Experience Factor (described below) for
the Valuation Period.

Decreases in Subaccount Accumulation Value under a Policy are effected by the
cancellation of Accumulation Units of a Subaccount. Therefore, Surrenders,
Withdrawals, loans, transfers out of a Subaccount, payment of a Death Benefit,
and the monthly deduction all result in the cancellation of an appropriate
number of Accumulation Units of one or more Subaccounts. Accumulation Units
generally are canceled as of the end of the Valuation Period in which the
Company received notice of or instructions regarding the event or the deduction
is made.

The Accumulation Experience Factor. For each Subaccount, the Accumulation
Experience Factor reflects the investment experience of the Portfolio in which
that Subaccount invests and the charges assessed against that Subaccount for a
Valuation Period. The Accumulation Experience Factor is calculated by dividing
(1) by (2) and subtracting (3) from the result, where:

(1) is the result of:

a. the net asset value per share of the Portfolio held in the Subaccount,
determined at the end of the current Valuation Period; plus

b. the per share amount of any dividend or capital gains distributions made by
the Portfolio held in the Subaccount, if the "ex-dividend" date occurs
during the current Valuation Period; plus or minus

c. a per share charge or credit for any taxes reserved for, which is
determined by the Company to have resulted from the operations of the
Subaccount.

(2) is the net asset value per share of the Portfolio held in the Subaccount,
determined at the end of the last prior Valuation Period.

(3) is a daily factor representing the mortality and expense risk charge
deducted from the Subaccount, adjusted for the number of days in the
Valuation Period.

Guaranteed Interest Account Accumulation Value

The Guaranteed Interest Account Accumulation Value as of the Policy Date is
equal to the amount of the initial Net Premium allocated to the Guaranteed
Interest Account. On subsequent Valuation Days, the Guaranteed Interest Account
Accumulation Value is calculated as follows:

1. The Guaranteed Interest Account Accumulation Value as of the end of the
preceding Valuation Period plus any interest earned during the Valuation
Period; plus

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2. Any additional Net Premiums allocated to the Guaranteed Interest Account
plus interest credited to those premiums during the current Valuation
Period; plus

3. Any Accumulation Value transferred to the Guaranteed Interest Account during
the current Valuation Period (including any amounts released from the Policy
Loan Account and allocated to the Guaranteed Interest Account during the
current Valuation Period); minus

4. Any Accumulation Value transferred from the Guaranteed Interest Account
during the current Valuation Period (including any amounts transferred to
the Policy Loan Account and the portion of any Excess Transfer Charge
allocated to the Guaranteed Interest Account during the current Valuation
Period); minus

5. The portion of any Gross Withdrawals allocated to the Guaranteed Interest
Account during the current Valuation Period (including the portion of any
Surrender Charges resulting from a decrease in Stated Death Benefit
allocated to the Guaranteed Interest Account during the current Valuation
Period); minus

6. The portion of the monthly deduction allocated to the Guaranteed Interest
Account, if a Monthly Processing Date occurs during the current Valuation
Period.

YOUR RIGHT TO TRANSFER

After the initial Free Look Period, you may transfer your Net Accumulation Value
among the Subaccounts and, subject to the special rules described below, to and
from the Guaranteed Interest Account. The minimum amount that may be
transferred from each Subaccount or the Guaranteed Interest Account is $100 or
the balance in the Subaccount or the Guaranteed Interest Account, if less. The
minimum amount that can remain in a Subaccount or the Guaranteed Interest
Account following a transfer is $100. Percentages must be in whole numbers.
Transfer requests that do not comply with these requirements will not be
effected. Transfers due to the operation of Dollar Cost Averaging or Automatic
Rebalancing are not included in determining the limit on the number of transfers
allowed without a charge. (See "DOLLAR COST AVERAGING FACILITY, page 35" and
"AUTOMATIC REBALANCING," page 36.) All transfers effected during a single
Valuation Period will be counted as one transfer for purposes of determining the
excess transfer charge. We reserve the right to limit the number of transfers
per Policy Year to 12. The table below summarizes the number of transfers
permitted in any one Policy Year without an excess transfer charge, the total
number of transfers permitted in a Policy Year and the excess transfer charge
under current rules.
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<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Free Transfers 12
- --------------------------------------------------------------------------------
Total Number of Transfers Unlimited
Permitted
- --------------------------------------------------------------------------------
Excess Transfer Charge $25 for each transfer in excess of 12 during any
Policy Year
- --------------------------------------------------------------------------------
</TABLE>

Transfers may be made based upon instructions given by Written Notice or by
telephone.

Right to Restrict Transfers. The Company reserves the right to modify,
restrict, suspend or eliminate the transfer privileges (including the telephone
transfer facility) at any time, for any class of Policies, for any reason. In
particular, the Company reserves the right to not honor transfers requested by a
third party holding a power of attorney from an Owner where that third party
requests simultaneous transfers on behalf of the Owners of two or more Policies.

Special Rules for the Guaranteed Interest Account. Once during the first 30
days of each Policy Year, you may transfer amounts to or from the Guaranteed
Interest Account. Transfer requests received within 30 days prior to the Policy
Anniversary will be considered requests to transfer on the Policy Anniversary.
A request to transfer to or from the Guaranteed Interest Account that is
received on the Policy Anniversary or within the following 30 days will be
processed if it is the first such transfer request received during the 30 day
period. Requests for transfers to or from the Guaranteed Interest Account
received at any other time will not be processed.

The maximum transfer amount from the Guaranteed Interest Account to the
Subaccounts of the Variable Account in any Policy Year is the greatest of:

(a) 25% of the Guaranteed Interest Account Accumulation Value immediately prior
to the first transfer or Withdrawal in that Policy Year from the Guaranteed
Interest Account;

(b) $100; or

(c) the sum of the amounts that were transferred out of and withdrawn from the
Guaranteed Interest Account in the prior Policy Year.

DOLLAR COST AVERAGING FACILITY

If elected at the time of the application or at any time thereafter by Written
Notice, an Owner may systematically transfer on a monthly basis, specified
dollar amounts from the Money Market Subaccount to other Subaccounts. This is
known as the dollar-cost averaging ("Dollar Cost Averaging") method of
investment. The fixed dollar amount will purchase more Accumulation Units of a
Subaccount when their value is lower and fewer units when their value is higher.
Over time, the cost per unit averages out to be less than if all purchases of
units had been made at the highest value and greater than if all purchases had
been made at the lowest value. The Dollar Cost Averaging method of investment
reduces the risk of making purchases only when the price

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<PAGE>

of Accumulation Units is high. It does not assure a profit or protect against a
loss in declining markets.

Owners may elect Dollar Cost Averaging only if their Subaccount Accumulation
Value in the Money Market Subaccount is at least $10,000 at the time of the
election. The minimum transfer amount out of the Money Market Subaccount for
Dollar Cost Averaging is $100 per month. The maximum transfer amount out of the
Money Market Subaccount for Dollar Cost Averaging is the Subaccount Accumulation
Value in that Subaccount, at the time of election, divided by 12. If Dollar
Cost Averaging transfers are to be made to more than one Subaccount, allocations
of the transfer amount must be designated as whole number percentages. Dollar
allocations may not be made. If you elect to transfer to more than one
Subaccount, the minimum percentage that may be transferred to any Subaccount is
5% of the total amount transferred under the facility.

Transfers for Dollar Cost Averaging will be effected on the Monthly Processing
Dates. Once elected, Dollar Cost Averaging remains in effect for a Policy until
the Subaccount Accumulation Value in the Subaccount from which the transfers are
made is depleted, the Maturity Date occurs or until the Owner cancels the
election by Written Notice received at least seven days in advance of the next
transfer date. There is no additional charge for using Dollar Cost Averaging.
The Company reserves the right to discontinue offering the Dollar Cost Averaging
facility at any time and for any reason.

You may change the transfer amount or the Subaccounts to which transfers are to
be made once each Policy Year, subject to the above limitations. Any transfer
under this facility will not be included for the purposes of computing the
excess transfer charge.

AUTOMATIC REBALANCING

You may implement an automatic rebalancing program for your Variable
Accumulation Value. Accumulation Value allocated to the Subaccounts can be
expected to increase or decrease at different rates. An automatic rebalancing
program automatically reallocates your Accumulation Value among the Subaccounts
each quarter to return the allocation to the most recent Net Premium allocation
percentages you specify for the Subaccounts. Automatic Rebalancing is intended
to transfer Accumulation Value from those Subaccounts that have increased in
value to those that have declined, or not increased as much, in value. Over
time, this method of investing may help an Owner "buy low and sell high,"
although there can be no assurance that this objective will be achieved.
Automatic Rebalancing does not guarantee profits, nor does it assure that an
Owner will not have losses.

You may select an automatic rebalancing program when you apply for the Policy or
at a later date by completing the Automatic Rebalancing form and returning it to
our Customer Service Center. We require that you allocate no more than 35% of
your Premiums to any one Subaccount and that you allocate your Net Premiums to
at least five Subaccounts while this feature is in effect. If at any time
during the operation of the Automatic Rebalancing feature you

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<PAGE>

request a change in Net Premium allocation which does not meet these
requirements, we will notify you that your request must be changed. We will not
process such a request unless you also request that the Automatic Rebalancing
feature be discontinued. When you request a change in premium allocation that
meets these requirements, your Accumulation Value will be reallocated as of the
Valuation Day that we receive your written allocation instructions. Amounts
will be transferred among the Subaccounts to match the allocation for Net
Premiums. During the operation of Automatic Rebalancing, you may not change
your allocation percentage to the Guaranteed Interest Account by more than 25%
of the percentage previously allocated to the Guaranteed Interest Account. If
you change your Net Premium allocation more than five (5) times per Policy Year,
there will be a $25 charge taken from your Accumulation Value which will be
deducted proportionately from the Subaccount Accumulation Values and Guaranteed
Interest Account Accumulation Value as of the Valuation Day the allocation
change is effective.

As of the first Valuation Day of each calendar quarter, we will transfer
Accumulation Value among the Subaccounts to the extent necessary to return the
allocation to your specifications. Automatic Rebalancing may not begin until
the first Monthly Processing Date following the end of the Free Look Period.
Automatic Rebalancing will continue until we receive a Written Request or
telephone request at our Customer Service Center to terminate. Other transfers
may not be made during the operation of Automatic Rebalancing.

You may select either Dollar Cost Averaging or Automatic Rebalancing, but not
both.

WITHDRAWALS

You may make Withdrawals under your Policy after the first Policy Year under the
following rules. You must submit a Written Request for the Withdrawal (unless
you have elected telephone privileges). We must receive your request during the
Insured's lifetime. The maximum Withdrawal is the amount which will leave $500
as Cash Surrender Value for the Policy. The amount withdrawn from the
Guaranteed Interest Account may not be greater than the total Withdrawal times
the ratio of the Accumulation Value in the Guaranteed Interest Account to the
total unborrowed Accumulation Value immediately prior to the Withdrawal. A
Withdrawal cannot cause the Stated Death Benefit to be reduced below the minimum
Stated Death Benefit of $50,000. No more than 12 Withdrawals may be made during
a Policy Year, and each Withdrawal must be at least $500. An administrative
charge (the withdrawal transaction charge) will be assessed on any Withdrawal
made during a Policy Year after the first Withdrawal. See "WITHDRAWAL
TRANSACTION CHARGE," page 52. If death benefit type A is in effect and a
Withdrawal occurs during the first 14 Policy Years or first 14 years following
an increase in Stated Death Benefit, a surrender charge will apply. See
"SURRENDER CHARGE," page 47. Any withdrawal transaction charge and surrender
charge will be deducted along with the amount requested to be withdrawn and will
be considered part of the Gross Withdrawal. The following describes how Policy
values will be reduced by a Withdrawal and whether a surrender charge also may
apply.

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<PAGE>

When you request a Withdrawal, you can direct how the Gross Withdrawal will be
deducted from your Accumulation Value in the Subaccounts and the Guaranteed
Interest Account. If you provide no directions, the Gross Withdrawal will be
deducted from your Accumulation Value in the Subaccounts and the Guaranteed
Interest Account on a pro rata basis. See "THE GUARANTEED INTEREST ACCOUNT,"
page 33.

If death benefit type A is in effect, a Withdrawal will reduce the Accumulation
Value and may reduce the Stated Death Benefit. However, if the Withdrawal is the
first Withdrawal of that Policy Year, the Insured's attained Age is less than 81
at the time of the Withdrawal, the Withdrawal occurs less than 16 years
following the Policy Date, and the withdrawal is less than 5% of the Stated
Death Benefit, then the Withdrawal will not reduce the Stated Death Benefit. If
the above conditions are met and the amount of the Withdrawal exceeds the
greater of 10% of the Accumulation Value immediately prior to the Withdrawal and
5% of the Stated Death Benefit, the Stated Death Benefit will only be reduced by
the amount by which the Withdrawal exceeds the greater of 10% of the
Accumulation Value immediately prior to the Withdrawal and 5% of the Stated
Death Benefit. The Accumulation Value will be reduced, dollar for dollar, by the
Gross Withdrawal amount. The Stated Death Benefit will be reduced in proportion
to the reduction in Accumulation Value caused by the Withdrawal. The decrease in
Accumulation Value will occur on the day we process the Withdrawal; however, the
decrease in Stated Death Benefit will be effective as of the next Monthly
Processing Date. See "Changes in Stated Death Benefit," page 43 for a discussion
of how a decrease is effected if there has been a prior increase in Stated Death
Benefit. If the reduction occurs while the surrender charge is in effect
(generally, during the first 14 Policy Years and the first 14 years after an
increase in Stated Death Benefit), a portion of the sales surrender charge may
be assessed. See "SURRENDER CHARGE," page 47.

If death benefit type B is in effect, a withdrawal will reduce the Accumulation
Value dollar for dollar but the Stated Death Benefit will not be reduced as the
Accumulation Value reflects the decrease.

If the Stated Death Benefit is reduced by a Withdrawal, the Base Death Benefit
scheduled in the Adjustable Term Insurance Rider, if any, for the current year
and all future years will be reduced by an equal amount. No Withdrawal will be
allowed if the Stated Death Benefit remaining in force after the Withdrawal
would be reduced below $50,000 and the Base Death Benefit scheduled in the
Adjustable Term Insurance Rider would be below $100,000, or the Stated Death
Benefit is reduced below $100,000 for Policies without the Adjustable Term
Insurance Rider.

We generally will pay a Withdrawal request within seven days following the
Valuation Day we receive the request. See "WHEN WE MAKE PAYMENTS," page 45.
Withdrawals may have adverse tax consequences. See "FEDERAL TAX
CONSIDERATIONS," page 61.

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<PAGE>

SURRENDERS

You may surrender your Policy at any time for its Cash Surrender Value. We must
receive the Policy and Written Request for the surrender during the Insured's
lifetime. A surrender charge may apply. See "SURRENDER CHARGE," page 47. We
will pay the Cash Surrender Value within seven (7) days following our receipt of
the request. We will cancel the Policy as of the date of the Written Request.
Your Policy will terminate and cease to be in force if it is surrendered. It
cannot be reinstated later. A surrender may have tax consequences. See
"FEDERAL TAX CONSIDERATIONS," page 61.

POLICY LOANS

You may obtain a Policy loan from us at any time after the first Policy
Anniversary by submitting a Written Request for a Policy loan to our Customer
Service Center. The minimum amount you may borrow is $100. The maximum loan
amount is 90% of your Cash Surrender Value on the Valuation Day we receive your
Written Request. Outstanding Policy loans reduce the amount available for new
loans. Policy loans will be processed as of the Valuation Day your Written
Request is received and loan proceeds generally will be sent to you within seven
days. See "WHEN WE MAKE PAYMENTS," page 45. Loans under a Policy classified
as a modified endowment contract may be subject to adverse tax consequences,
including a 10% penalty. See "Distributions From Policies Classified as
Modified Endowment Contracts," page 64.

We will charge interest daily on any outstanding Policy loan at a maximum annual
rate of 6%. Interest is due and payable on each Policy Anniversary date while a
Policy loan is outstanding. If interest is not paid when due, the amount of the
interest is added to the loan and becomes part of the outstanding Policy loan.

You may repay all or part of your Policy Debt at any time while the Insured is
living prior to the Maturity Date and the Policy is in force. Policy Debt is
equal to all outstanding policy loans and any accrued and unpaid interest on
those loans. Loan repayments must be sent to our Customer Service Center and
will be credited as of the date received. Such repayments will be credited
first to interest then to principal. If there is an outstanding Policy loan,
any payment which is not a planned premium received before the Maturity Date
is considered a loan repayment unless otherwise indicated. If the Death Benefit
becomes payable while a Policy loan is outstanding, the Policy Debt will be
deducted in calculating the Death Benefit. If the Policy Debt exceeds the
Accumulation Value less any Surrender Charges on any Valuation Day, the Policy
will be in default. We will send you, and any assignee of record, notice of the
default. You will have a 61-day grace period to submit a sufficient payment to
avoid termination. The notice will specify the amount that must be repaid to
prevent termination. If your Policy terminates because of excessive Policy
Debt, it cannot be reinstated.

When a Policy loan is made (or when interest is not paid when due), an amount
equal to the loan proceeds (or due and unpaid interest) is transferred from the
Accumulation Value in the

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<PAGE>

Subaccounts or Guaranteed Interest Account. This withdrawal is made pro rata on
the basis of Accumulation Value in each Subaccount and the Guaranteed Interest
Account unless you direct a different allocation when requesting the loan and as
long as at least $100 remains in the Subaccount or Guaranteed Interest Account
after the deduction. The amount withdrawn is then transferred to the Policy
Loan Account in the General Account. Conversely, when a loan is repaid, an
amount equal to the repayment will be transferred from the Policy Loan Account
to the Subaccounts and the Guaranteed Interest Account and allocated as you
direct when submitting the repayment. If you provide no direction, the amount
will be allocated in accordance with your then effective Net Premium allocation
percentages. Thus, a loan or loan repayment will have no immediate effect on
the Accumulation Value, but other Policy values, such as the Net Accumulation
Value and Cash Surrender Value, will be reduced or increased immediately by the
amount transferred to or from the Policy Loan Account.

The amount in the Policy Loan Account will be credited with interest at a
minimum guaranteed annual rate of 4%. The interest earned is transferred to the
Subaccounts of the Variable Account and the Guaranteed Interest Account on each
Policy Anniversary in the same proportion that Net Premiums are being allocated.

Certain loan amounts taken after the earlier of:

1. the tenth Policy Anniversary, or
2. the fifth Policy Anniversary if the Insured's Age is 60 or greater,

will be considered preferred loan amounts as described below. During each
Policy Year of preferred loan eligibility, the first loan made during that year
will be considered a preferred loan amount up to a maximum of 10% of the Net
Accumulation Value. Any amount loaned later in that Policy Year will not be
considered a preferred loan amount. If the preferred loan amount made during
any Policy Year is less than the maximum allowed, the balance may not be carried
over to increase the eligible preferred loan amount of any subsequent Policy
Year. Beginning with the 21st Policy Year, all loan balances will be considered
to be preferred loan amounts. The amount of any Accumulation Value in the
Guaranteed Interest Account equal to any preferred loan amount on the Policy
will be credited with interest at the rate of 4%.

A Policy loan, whether or not repaid, will have a permanent effect on the Death
Benefit and Accumulation Values because the investment results of the
Subaccounts of the Variable Account and current interest rates credited on
Accumulation Value in the Guaranteed Interest Account will apply only to the
non-loaned portion of the Accumulation Value. The longer the loan is
outstanding, the greater the effect is likely to be. Depending on the
investment results of the Subaccounts or credited interest rates for the
Guaranteed Interest Account while the Policy loan is outstanding, the effect
could be favorable or unfavorable. Policy loans may increase the potential for
lapse if investment results of the Subaccounts are less than anticipated. Also,
Policy loans could, particularly if not repaid, make it more likely than
otherwise for a Policy to

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<PAGE>

terminate. See "FEDERAL TAX CONSIDERATIONS," page 61, for a discussion of
adverse tax consequences if a Policy lapses with Policy loans outstanding.

TELEPHONE PRIVILEGES

If you have elected this privilege in a form required by us, you may make
transfers or request Withdrawals and Policy loans by telephoning our Customer
Service Center. Any telephone request for Withdrawals or Policy loans must be
for an amount less than $25,000.

Our Customer Service Center will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Such procedures may
include, among others, requiring some form of personal identification prior to
acting upon instructions received by telephone, providing written confirmation
of such transactions, and/or tape recording of telephone instructions. Your
request for telephone privileges authorizes us to record telephone calls. If
reasonable procedures are not used in confirming instructions, we may be liable
for any losses due to unauthorized or fraudulent instructions. We reserve the
right to discontinue this privilege at any time.

DEATH BENEFIT AND CHANGES IN DEATH BENEFIT TYPE

Payment of Death Proceeds

As long as the Policy remains in force, we will pay the Death Proceeds after we
receive at our Customer Service Center satisfactory proof of the Insured's
death. We may require return of the Policy. The Death Proceeds will be paid in
a lump sum to the Beneficiary generally within seven days after receipt of such
proof (see "WHEN WE MAKE PAYMENTS," page 45) or, if a payment option is
elected, at different dates determined by the payment option elected (see
"PAYMENT OPTIONS," page 45.) See "Selecting and Changing the Beneficiary,"
page 44.

Amount of Death Proceeds

The Death Proceeds are equal to the sum of the Base Death Benefit on the date of
the Insured's death, plus any life insurance proceeds provided by rider, minus
any Policy Debt on that date and, if the date of death occurred during a grace
period, minus the past due monthly deductions. See "Grace Period," page 30.
If the Adjustable Term Insurance Rider is in effect, the Death Proceeds are
calculated as described above using the Target Death Benefit instead of the Base
Death Benefit. See "Selecting a Level of Death Benefits," page 44. Under
certain circum stances, the amount of the Death Proceeds may be further
adjusted. See "OTHER POLICY PROVISIONS," page 57.

If part or all of the Death Proceeds are paid in one sum, Southland will pay
interest on this sum from the date we determine the Death Proceeds to the date
of payment, or until a payment option is selected. Interest will be at the rate
we declare, or at any higher rate required by law.

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<PAGE>

Base Death Benefit and Death Benefit Types

The Owner may choose one of two death benefit types, which will determine the
Base Death Benefit. Under death benefit type A, the Base Death Benefit is the
greater of the Stated Death Benefit or a multiple of the Accumulation Value on
the date of the Insured's death. Under death benefit type B, the Base Death
Benefit is the greater of the Stated Death Benefit plus the Accumulation Value,
or a multiple of the Accumulation Value, on the date of the Insured's death.

If investment performance is favorable, the amount of the Base Death Benefit may
increase. However, under type A, the Base Death Benefit ordinarily will not
change for several years as a result of any favorable investment performance and
may not change at all, whereas under type B, the Base Death Benefit will vary
directly with the investment performance of the Accumulation Value. To see how
and when investment performance may begin to affect the Base Death Benefit,
please see the illustrations beginning on page 18.

In both cases, the multiple of the Accumulation Value depends on the Insured's
attained Age at death. The table of multiples in effect as of the issue date is
shown below. If the table becomes inconsistent with any federal income tax laws
and/or regulations, we reserve the right to change it.

- --------------------------------------------------------------------------------
Death Benefit Multiples
- --------------------------------------------------------------------------------
Multiple of Multiple of Multiple of
Attained Accumulation Attained Accumulation Attained Accumulation
Age Value Age Value Age Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 - 40 2.50 54 1.57 68 1.17
41 2.43 55 1.50 69 1.16
42 2.36 56 1.46 70 1.15
43 2.29 57 1.42 71 1.13
44 2.22 58 1.38 72 1.11
45 2.15 59 1.34 73 1.09
46 2.09 60 1.30 74 1.07
47 2.03 61 1.28 75 - 90 1.05
48 1.97 62 1.26 91 1.04
49 1.91 63 1.24 92 1.03
50 1.85 64 1.22 93 1.02
51 1.78 65 1.20 94 1.01
52 1.71 66 1.19 90 - 100 1.00
53 1.64 67 1.18
- ---------------------------------------------------------------------------
</TABLE>

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<PAGE>

Initial Stated Death Benefit and Death Benefit Type

The initial Stated Death Benefit is set at the time the Policy is issued. The
minimum initial Stated Death Benefit is $100,000. You may change the initial
Stated Death Benefit from time to time, as discussed below. You select the
death benefit type when you apply for the Policy. You also may change the death
benefit type, as discussed below.

Changes in Death Benefit Type

After the first Policy Year, you may change the death benefit type on your
Policy on any Policy Anniversary subject to the following rules. You must
submit a Written Request. After any change, the Stated Death Benefit must be at
least $50,000. The effective date of the change will be the Monthly Processing
Date that coincides with or next follows the Valuation Day after we approve the
Written Request for the change.

When a change from type A to type B is made, the Stated Death Benefit after the
change is effected will be equal to the Stated Death Benefit before the change
less the Accumulation Value on the effective date of the change. When a change
from type B to type A is made, the Stated Death Benefit after the change will be
equal to the Stated Death Benefit before the change is effected plus the
Accumulation Value on the effective date of the change.

Changes in Stated Death Benefit

After the first Policy Year, you may request an increase in the Stated Death
Benefit, and after the second Policy Year, you may request a decrease in the
Stated Death Benefit, subject to the following conditions. No change will be
permitted that would result in your Policy not satisfying the requirements of
section 7702 of the Code.

An increase or decrease can be requested by Written Request only during the 30-
day period preceding a Policy Anniversary. Any increase in the Stated Death
Benefit must be at least $10,000 and an application must be submitted, along
with evidence of insurability satisfactory to Southland. A change in planned
premiums may be advisable. See "Premiums upon Increase in Stated Death
Benefit," page 30. The increase in Stated Death Benefit will become effective
as of the Policy Anniversary on or following the date the increase is approved.
You must return your Policy so we can amend the Policy to reflect the increase.
If the increase becomes effective during the first three Policy Years, the
Three-Year Guarantee will be extended for three years from the effective date of
the increase. See "Three-Year Guarantee," page 29. A Target Premium will be
established for the increase, and the portion of premiums paid thereafter
allocated to the increase will be subject to a 4% sales charge until an amount
equal to 10 Target Premiums for the increase has been paid. See "Sales Charge."

Any decrease in the Stated Death Benefit must be at least $10,000, and the
Stated Death Benefit after the decrease must be at least $50,000. In addition,
no decrease may be made until at least

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<PAGE>

two years following the effective date of an increase in Stated Death Benefit.
A decrease in Stated Death Benefit will become effective as of the Policy
Anniversary on or following our receipt of Written Request.

If increases in the initial Stated Death Benefit are in effect, a decrease in
Stated Death Benefit will be allocated to each segment of the Stated Death
Benefit in the same proportion as the Target Premium for each segment bears to
the total Target Premiums for the Policy.

If a decrease in Stated Death Benefit occurs during the first 14 Policy Years,
or during the first 14 years following an increase in Stated Death Benefit, a
Surrender Charge may apply. See "SURRENDER CHARGE," page 47.

Selecting a Level of Death Benefits

When you apply for a Policy, you may select a level of death benefits in excess
of the Base Death Benefit for the Policy by adding to the Policy an Adjustable
Term Insurance Rider on the life of the Insured. The Adjustable Term Insurance
Rider specifies a fixed dollar amount of Death Benefit in excess of the initial
Base Death Benefit called the Target Death Benefit. The amount of the Target
Death Benefit may be set to vary as often as each Policy Year. The amount of
Death Benefit provided by the Adjustable Term Insurance Rider on any day is the
difference between the Target Death Benefit specified and the Base Death Benefit
then in effect. The amount provided therefore adjusts daily for variations in
the Base Death Benefit under the Policy.

Adding the Adjustable Term Insurance Rider will increase insurance coverage
without increasing the Base Death Benefit. There is no defined premium for the
amount of coverage provided by the Adjustable Term Insurance Rider, and,
therefore, no sales or Surrender Charges associated with such coverage.
However, a cost of insurance charge is deducted monthly from your Accumulation
Value for the Adjustable Term Insurance Rider amount in effect. See "Cost of
Insurance Charge," page 51 and "ADDITIONAL BENEFITS," page 58. Owners should
consult their sales representatives when deciding whether to add the Adjustable
Term Insurance Rider to their Policy.

Selecting and Changing the Beneficiary

You select a Beneficiary in your application. You may later change the
Beneficiary in accordance with the terms of the Policy. If the Insured dies and
there is no surviving Beneficiary, the Owner's estate will be the Beneficiary.

MATURITY BENEFIT

If the Insured is living at Age 100 and the Policy is in force, Southland will
pay you the Net Accumulation Value and the Policy will terminate unless you
exercise your right to continue the

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<PAGE>

Policy. The tax consequences associated with continuing a Policy beyond
attained Age 100 are unclear. A tax advisor should be consulted before
exercising this right.

PAYMENT OPTIONS

The Policy offers a wide variety of optional ways of receiving proceeds payable
under the Policy, such as on surrender, death or maturity, other than in a lump
sum. Any agent authorized to sell this Policy can explain these options upon
request. None of these options vary with the investment performance of a
separate account because they are all forms of fixed-benefit annuities.

WHEN WE MAKE PAYMENTS

Payments of Withdrawals, Surrenders or Death Proceeds from the Subaccounts will
usually be made within seven days of the Valuation Day the Company receives a
Written Request and all required information at our Customer Service Center.
However, we may postpone the processing of any such transactions for any of the
following reasons:

a) When the New York Stock Exchange ("NYSE") is closed for trading other than
for customary holiday or weekend closings, or trading on the NYSE is
otherwise restricted, as determined by the SEC;

b) When the SEC determines that an emergency exists that would make the
disposal of securities held in the Variable Account or the determination of
the value of the Variable Account's assets not reasonably practicable; or

c) When the SEC by order permits a delay for the protection of Policyowners.

We may defer up to six months the payment of any Withdrawal or proceeds from the
Guaranteed Interest Account. Interest will be credited at the currently
declared rate of interest for the Guaranteed Interest Account until payment is
made.

THE GUARANTEED INTEREST ACCOUNT

You may allocate all or a portion of your Net Premiums and transfer your Net
Accumulation Value to or from the Guaranteed Interest Account, which is part of
our General Account and which pays interest at a declared rate. The General
Account supports our non-variable insurance and annuity obligations. Because of
exemptive and exclusionary provisions, interests in the Guaranteed Interest
Account have not been registered under the Securities Act of 1933, and neither
the Guaranteed Interest Account nor the General Account has been registered as
an investment company under the 1940 Act. Accordingly, neither the General
Account, the Guaranteed Interest Account nor any interest therein are generally
subject to regulation under

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<PAGE>

these Acts. As a result, the staff of the SEC has not reviewed the disclosures
which are included in this prospectus which relate to the General Account and
the Guaranteed Interest Account. These disclosures, however, may be subject to
certain provisions of the federal securities laws relating to the accuracy and
completeness of statements made in this prospectus. For more details regarding
the General Account, see your Policy.

You may accumulate amounts in the Guaranteed Interest Account by (i) allocating
Net Premiums, (ii) transferring amounts from the Subaccounts, and (iii) earning
interest on amounts you already have in the Guaranteed Interest Account. (See
"PREMIUMS AND ALLOCATIONS," page 27.)

The amount you have in the Guaranteed Interest Account at any time is the sum of
all Net Premiums allocated to this Account, all transfers, and earned interest.
This amount is reduced by amounts transferred out of or withdrawn from the
Guaranteed Interest Account and deductions allocated to the Guaranteed Interest
Account. (See "GUARANTEED INTEREST ACCOUNT ACCUMULATION VALUE," page 33.)

We pay a declared interest rate on all amounts that you have in the Guaranteed
Interest Account. These interest rates will never be less than the minimum
guaranteed effective annual interest rate of 3.5%. When a Net Premium is
received or an amount is transferred into the Guaranteed Interest Account, an
interest rate will be credited to that amount. The rate will be guaranteed for
a twelve-month period. Thereafter, interest rates credited to that amount (and
amounts earned on that amount) will be similarly guaranteed for successive
periods of at least twelve-months at the then current interest rate. Therefore,
different interest rates may apply to different amounts in the Guaranteed
Interest Account, depending on when and how the amount was initially allocated.
For purposes of crediting interest, amounts deducted, transferred or withdrawn
from the Guaranteed Interest Account are accounted for on a first-in-first-out
basis. Interest at the guaranteed minimum rate or such higher rate as Southland
may determine will be paid regardless of the actual investment experience of the
General Account. We bear the full amount of the investment risk for the amount
allocated to the Guaranteed Interest Account while the Owner assumes the risk
that interest credited may not exceed the guaranteed minimum rate.

POLICY CHARGES AND FEES

CHARGES DEDUCTED FROM PREMIUMS

Certain expenses are deducted from your premium payments. The remainder of each
premium (the Net Premium) is then added to your Accumulation Value. The
expenses which are deducted from your premium include the tax charges and the
sales charge.

State Premium Tax Charge. All states levy taxes on life insurance premium
payments. The amount of these taxes vary from state to state, and may vary from
jurisdiction to jurisdiction within a state. We currently deduct an amount
equal to 2.5% of each premium to pay applicable

-46-
<PAGE>

premium taxes. The 2.5% rate approximates the average tax rate we expect to pay
on premiums from all states.

DAC Tax Charge. A charge currently equal to 1.5% of each premium payment is
deducted to cover our estimated cost for the federal income tax treatment of
deferred acquisition costs determined solely by the amount of life insurance
premiums we receive. This charge for deferred acquisition costs is reasonable
in relation to Southland's increased federal income tax burden under Section 848
of the Code resulting from the receipt of premium payments.

We reserve the right to increase or decrease the premium expense charge for
taxes due to any change in tax law. We further reserve the right to increase or
decrease the premium expense charge for the federal income tax treatment of
deferred acquisition costs due to any change in the cost to us.

Sales Charge. A charge equal to 4.0% of each premium paid up to an aggregate
amount equal to ten Target Premiums for your Policy, or to ten Target Premiums
for an increase after an increase in Stated Death Benefit, is deducted to
compensate us for a portion of the cost of selling the Policy. This deduction
from premiums is only a portion of the total sales charge that will be assessed
against your Accumulation Value in the event you surrender your Policy during
the 14 Policy Years following the Policy Date or 14 Policy Years following an
increase in the Stated Death Benefit. See "Sales Surrender Charge," page 48.

For a Policy with an increase in Stated Death Benefit, premiums paid are
allocated to the Initial Stated Death Benefit and each increase in the Stated
Death Benefit (each portion of the Death Benefit is referred to as a "segment")
in the same proportion that the Target Premium for each segment bears to the
total Target Premium for the Policy after the increase is taken into account.

The sales charge covers the cost of distribution, costs of preparing our sales
literature, other promotional expenses, and other direct and indirect expenses.
The amount of this charge cannot be specifically related to sales expenses in a
particular year since we recover these costs over the period the Policies remain
in effect. We pay the sales expenses from our own resources, including the
sales charge, any sales Surrender Charge we may collect and any profit we may
earn on the mortality and expense risk charge deducted under the Policy. The
sales charge may be reduced or waived for certain group or sponsored
arrangements or corporate purchasers.

SURRENDER CHARGE

We assess a surrender charge against your Accumulation Value upon a Surrender or
lapse of your Policy in the first 14 Policy Years, or the 14 years following an
increase in Stated Death Benefit. An increase in the Stated Death Benefit as a
result of a change in the death benefit option is not treated as an increase for
purposes of the surrender charge. The surrender charge consists of two charges:
an administrative surrender charge and a sales surrender charge.

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<PAGE>

If the Stated Death Benefit of your Policy is reduced due to a requested
decrease or a Withdrawal effected during the first 14 Policy Years or 14 years
following an increase in the Stated Death Benefit, we may deduct a portion of
the sales surrender charge (but no administrative surrender charge) from your
Net Accumulation Value. We also may recalculate the sales surrender charge in
effect after the reduction is taken into account. See "CHANGES IN STATED DEATH
BENEFIT," page 43. Decreases in the Stated Death Benefit as a result of a
change in your death benefit option do not result in a surrender charge
deduction from your Net Accumulation Value or in a recalculation of the
remaining sales surrender charge.

The surrender charge is designed to recover our expenses in issuing and
distributing the Policies.

Administrative Surrender Charge

The administrative surrender charge is calculated separately for the initial
Stated Death Benefit and for each increase in Stated Death Benefit (the initial
Stated Death Benefit and each increase in Stated Death Benefit is referred to as
a "death benefit segment"). The charge is equal to $4.00 per $1,000 of Stated
Death Benefit for each death benefit segment. The administrative surrender
charge in effect on any Valuation Day is taken into account when calculating the
Cash Surrender Value payable on a Surrender. The administrative surrender
charge is not deducted on a reduction in Stated Death Benefit. The
administrative surrender charge remains level for the first 9 Policy Years or 9
years after an increase in Stated Death Benefit, then decreases by one-sixth of
the amount in effect at the end of the 9th Policy Year until it reaches zero at
the beginning of the 15th year, or the year in which the Insured reaches Age 98,
whichever is earlier.

The administrative surrender charge is designed to partially cover the
administrative expenses associated with setting up your Policy (other than sales
expenses), such as application processing, establishment of Policy records and
insurance underwriting costs. It also includes costs associated with the
development and operation of our systems for administering the Policies. We do
not expect to profit from the administrative surrender charge.

Sales Surrender Charge

The sales surrender charge is calculated separately for the Target Premium for
the Policy as issued, and for the Target Premium for any increase in Stated
Death Benefit. Target Premiums are not based on the planned premiums you
determine when you purchase the Policy. Target Premiums are actuarially
determined based on the Age, sex and risk class of the Insured. See "PREMIUMS,"
page 28. The Target Premium for your Policy, as originally issued, and for any
increase in Stated Death Benefit made after the Policy Date will be listed in
the schedule attached to your Policy. The amount of the sales surrender charge
in a Policy Year is not necessarily related to our actual sales expenses in that
year. To the extent sales expenses are not covered by the sales surrender
charge, we will cover them from other funds.

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<PAGE>

In the case of each death benefit segment, the sales surrender charge is equal
to 50% of actual premiums paid up to one Target Premium, plus 40% of any
additional premiums paid up to the next two Target Premiums, for the death
benefit segment. In any case, the maximum sales surrender charge for each death
benefit segment is equal to 130% of one Target Premium (50% of one Target
Premium plus 40% of each of the next two Target Premiums) for the death benefit
segment. The maximum sales surrender charge for each death benefit segment will
be shown in the schedule attached to your Policy. Like the administrative
surrender charge, the maximum sales surrender charge for a death benefit segment
remains level for the first 9 years after the death benefit segment takes
effect, then decreases each year by one-sixth of the amount in effect at the end
of the 9th year after it takes effect until it reaches zero at the beginning of
the 15th year after it takes effect, or the year in which the Insured reaches
Age 98, whichever is earlier.

In the first two Policy Years or first two years after an increase in Stated
Death Benefit, the sales surrender charge is capped at 26% of premiums paid up
to one Target Premium, plus 6% of premiums paid between one and two Target
Premiums, plus 5% of all other premiums for the death benefit segment.

The entire amount of the sales surrender charge in effect on any Valuation Day
is taken into account when calculating the Cash Surrender Value payable on a
Surrender. A portion of the sales surrender charge may be deducted upon a
decrease in Stated Death Benefit resulting from a requested decrease in Stated
Death Benefit or a Withdrawal, depending in part on whether premiums paid and
allocated to a death benefit segment are more or less than the Target Premium
for the segment. The following rules explain when a sales surrender charge is
deducted on a decrease in Stated Death Benefit, how the amount deducted is
calculated, and how the remaining sales surrender charge is adjusted.

. When the Stated Death Benefit is decreased, each death benefit segment and
corresponding Target Premium is reduced in the same proportion that the
Stated Death Benefit is decreased. A new sales surrender charge will be
calculated based on the reduced Target Premiums for each death benefit
segment, as reduced, and giving credit for the time the death benefit segment
had been in effect before the reduction.

. If the reduced Target Premium for each reduced death benefit segment is
greater than or equal to the sum of premiums paid that were allocated to the
segment before the reduction, no sales surrender charge will be deducted from
your Accumulation Value.

. If the reduced Target Premium for each death benefit segment is less than the
sum of premiums paid that were allocated to the segment, a sales surrender
charge will be deducted from your Accumulation Value. The amount of this
charge is the difference between the sales surrender charge in effect
immediately before the decrease in Stated Death Benefit and the new sales
surrender charge calculated upon the decrease.

An example of the calculation of surrender charges follows:

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<PAGE>

If the Stated Death Benefit is $200,000 for an insured age 45 on the Policy Date
and the Target Premium on this Policy is $2,800, the surrender charge assuming
that a $2,500 premium is paid at the beginning of each Policy Year is shown in
the table below:

Policy Year Administrative Sales Surrender Charge Actual
Surrender Charge Surrender
Charge
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1 800 650 1450
2 800 860 1660
3 800 2250 3050
4 800 2250 3050
5 800 2250 3050
6 800 2250 3050
7 800 2250 3050
8 800 2250 3050
9 800 2250 3050
10 800 1875 2541
11 666 1500 2034
12 400 1125 1525
13 266 750 1016
14 134 375 509
15 0 0 0
</TABLE>

MONTHLY DEDUCTIONS FROM YOUR NET ACCUMULATION VALUE

The following charges are deducted from your Net Accumulation Value on each
Monthly Processing Date. These deductions are taken from the Subaccounts of the
Variable Account and the Guaranteed Interest Account in the same proportion that
your Net Accumulation Value in each Subaccount and the Guaranteed Interest
Account bears to the total Net Accumulation Value as of the Monthly Processing
Date.

Initial Policy Charge. The initial Policy charge is $20 per month for the first
Policy Year. This charge covers the costs of setting up your Policy, other than
sales expenses, such as application processing, medical examinations,
establishment of Policy records and insurance underwriting costs. This charge
is designed to reimburse us for expenses and we do not expect to gain from it.

Monthly Administrative Charge. The monthly administrative charge is $6 per
month and is guaranteed never to exceed $10 a month. This charge is designed to
cover the ongoing costs of maintaining your Policy, such as premium billing and
collections, claim processing, Policy

- -50-
<PAGE>

transactions, record keeping, reporting and other communications with Owners,
and other expenses and overhead. This charge is designed to reimburse us for
expenses and we do not expect to gain from it. The initial amount of this
charge is not more than the average expected cost of the services to be provided
this year.

Cost of Insurance Charge. The cost of insurance charge compensates us for the
anticipated cost of paying the amount of the Death Benefit that exceeds your
Accumulation Value upon the death of the Insured. The cost of insurance charges
are calculated monthly, and depend on a number of variables. The charge on a
Monthly Processing Date is equal to our current monthly cost of insurance rate
multiplied by the net amount at risk under the Policy for the Death Benefit.
Because the monthly rate and the net amount at risk vary, the charge varies from
month to month and from Policy to Policy.

- -- Net Amount At Risk. Generally, the net amount at risk is the difference
between the Accumulation Value and the Death Benefit. If the Adjustable Term
Insurance Rider is in effect, the net amount at risk is determined separately
for the Base Death Benefit and for the insurance provided by the rider. The net
amount at risk for the Base Death Benefit is equal to the difference between the
current Base Death Benefit and the amount of your Accumulation Value on the
Monthly Processing Date. For this purpose, the amount of your Accumulation
Value is determined after deduction of administrative charges and other
supplemental benefit charges due on that date, but before deduction of the cost
of insurance charges for the Base Death Benefit and for any Adjustable Term
Insurance Rider. The net amount at risk for the Adjustable Term Insurance Rider
is equal to the amount of the benefit provided. If the Base Death Benefit of
your Policy consists of more than one death benefit segment because there has
been an increase in Stated Death Benefit (see "DEATH BENEFIT AND CHANGES IN
DEATH BENEFIT TYPE," page 41), the net amount at risk is allocated to each death
benefit segment in the same proportion that the death benefit segment bears to
the sum of all death benefit segments as of the Monthly Processing Date.

If the Base Death Benefit at the beginning of the month is increased, for
example, due to the requirements of federal income tax law definition of life
insurance, the net amount at risk for the Base Death Benefit that month will
also increase, but the net amount at risk for any Adjustable Term Insurance
Rider may be reduced. Changes in the relative makeup of the death benefit may
affect the cost of insurance charge.

- -- Cost of Insurance Rate. The cost of insurance rate for your Policy (or for a
death benefit segment) is based on the Age, sex and risk class of the Insured.
Separate cost of insurance rates apply to the Base Death Benefit, the Adjustable
Term Insurance Rider (See, "ADDITIONAL BENEFITS," page 58.), and any additional
death benefit segments. We place the Insured in a risk class when we issue the
Policy, based on our underwriting of the application. This original risk class
applies to the initial Stated Death Benefit and any Adjustable Term Insurance
Rider then added to the Policy. When an increase in Stated Death Benefit is
requested, we conduct underwriting
-51-
<PAGE>

before approving the increase to determine whether a different risk class will
apply to the increase. If the risk class for the increase has lower cost of
insurance rates than the original risk class, the risk class for the increase
also will be applied to the initial Stated Death Benefit. If the risk class for
the increase has higher cost of insurance rates than the original risk class,
the risk class for the increase will apply only to the increase in Stated Death
Benefit, and the original risk class will continue to apply to the initial
Stated Death Benefit. We currently place Insureds in the following risk
classes, based on our underwriting: a smoker (tobacco) or nonsmoker (non-
tobacco) standard risk class or a risk class involving a higher mortality risk
(a "substandard class").

Cost of insurance rates may change from time to time, but they will never be
more than the guaranteed maximum rates set forth in your Policy. The guaranteed
rates for standard risk classes are based on the 1980 Commissioners' Standard
Ordinary Mortality Tables, Age Nearest Birthday ("1980 CSO Tables"), sex-
distinct. The guaranteed rates for substandard risk classes are based on
multiples or additives of the 1980 CSO Tables. Unisex rates are used where
appropriate under applicable law, currently including the state of Montana and
any Policies purchased by employers and employee organizations in connection
with employment-related insurance or benefit programs. Our current cost of
insurance rates may be less than the guaranteed rates. In addition, current
rates are less for Policies with a Stated Death Benefit (or Target Death
Benefit, if any) that is at least $250,000 on the Policy Date. Our current cost
of insurance rates will be determined based on our expectations as to future
mortality, investment, expense and persistency experience.

Cost of insurance rates (whether guaranteed or current) for an Insured in a
nonsmoker standard risk class are lower than guaranteed rates for an Insured of
the same Age and sex in a smoker standard risk class. Cost of insurance rates
(whether guaranteed or current) for an Insured in a nonsmoker or smoker standard
risk class are generally lower than guaranteed rates for an Insured of the same
Age and sex and smoking status in a substandard risk class. Cost of insurance
rates (whether guaranteed or current) generally increase as the Age of the
Insured increases.

Supplemental Benefit Charges. If any additional benefits are added to your
Policy, charges for these benefits will be deducted monthly as part of the
monthly deduction. See "ADDITIONAL BENEFITS," page 58.

OTHER ADMINISTRATIVE CHARGES

The following describes other administrative charges that may be imposed on
certain transactions or requests. We do not expect to earn a profit from these
charges.

Withdrawal Transaction Charge. Prior to the Maturity Date and after the Free
Look Period, you may take one Withdrawal each Policy Year without a withdrawal
transaction charge. We impose a withdrawal transaction charge equal to the
lesser of $25 or 2% of the amount requested

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<PAGE>

on each additional Withdrawal in that Policy Year. The withdrawal transaction
charge will be deducted from your Net Accumulation Value on the same basis as
the Withdrawal is taken.

Excess Transfer Charge. We allow you 12 free transfers among and between the
Subaccounts and the Guaranteed Interest Account each Policy Year. For each
additional transfer, we will charge you $25 at the time each such transfer is
processed. The charge will be deducted from your Subaccount Accumulation Value
and Guaranteed Interest Account Accumulation Value in the same proportion as
amounts transferred from those values. Any transfer(s) due to the election of
Dollar Cost Averaging will not be included in determining if the excess transfer
charge should apply.

Change in Net Premium Allocation Percentages. If you change your Net Premium
allocation percentages more than five times during a Policy Year, we may impose
an administrative charge of $25. If imposed, this charge will be deducted
proportionally from your Subaccount Accumulation Values and Guaranteed Interest
Account Accumulation Value as of the Valuation Day the allocation change is
effective.

Automatic Rebalancing Charge. If you change the Automatic Rebalancing
allocation more than five times in a Policy Year, a $25 charge is deducted from
your Accumulation Value in proportion to the Subaccount Accumulation Values and
the Guaranteed Interest Account Accumulation Value as of the Valuation Day the
allocation change is effective.

CHARGES DEDUCTED FROM THE SUBACCOUNTS

Mortality and Expense Risk Charge. We deduct a daily charge from the assets in
the Subaccounts to compensate Southland for mortality and expense risks that we
assume under the Policy. The daily charge is at the rate of 0.02466%
(equivalent to an annual rate of 0.90%) on the assets of the Variable Account.
The mortality and expense risk charge is not deducted from the Guaranteed
Interest Account. If the mortality and expense risk charge is insufficient to
cover the cost of mortality and expense risks undertaken by Southland, the
Company will bear the shortfall. Conversely, if the charge proves more than
sufficient, the excess will be profit to the Company and will be available for
any proper corporate purpose including, among other things, payment of sales
expenses.

The mortality risk assumed is the risk that Insureds, as a group, will live for
a shorter period of time than estimated and, therefore, the cost of insurance
charges specified in the Policy will be insufficient to meet our actual claims.
The expense risk assumed is the risk that it will cost us more to issue and
administer the Policy and the Variable Account than we expected in setting
certain of the charge levels guaranteed in the Policy.

PORTFOLIO EXPENSES

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<PAGE>

There are fees and charges deducted from the Portfolios. Please read the
prospectus for the Portfolios you are considering for complete details.

PERSISTENCY REFUND

Southland currently intends to provide a persistency refund to long-term Owners
of the Policy. Each month the Policy or a coverage segment of Stated Death
Benefit remains in force after the tenth Policy Anniversary, Southland will
credit the Net Accumulation Value with a refund equivalent to 0.35% on an
annualized basis (0.02917% monthly) of the Net Accumulation Value for that
segment. The Net Accumulation Value will be allocated to each coverage segment
based upon the number of completed Policy Years that segment has been in force
and the size of the guideline annual premium as defined by the Federal income
tax law definition of life insurance.

The persistency refund will be added to the Subaccounts of the Variable Account
in the same proportion that the Accumulation Value in each Subaccount bears to
the Net Accumulation Value in the Variable Account as of the Monthly Processing
Date.

The following are examples of how the persistency refund affects a $10,000 Net
Accumulation Value each month if: (a) there is no Policy loan outstanding; and
(b) there is an outstanding Policy loan:

Accumulation Value = $10,000 (all in the Variable Account)

Monthly persistency refund rate = .0002917

Persistency refund = 10,000 x .0002917 = $2.92

Variable Account
----------------
<S> <C>

Before Persistency Refund $10,000.00

After Persistency Refund $10,002.92
</TABLE>

The following is an example of how the persistency refund affects the
Accumulation Value each month if the Policy has a loan:

Accumulation Value = $10,000

Accumulation Value in the Variable Account = $5,000

Policy Loan Account Value = $5,000

Monthly persistency refund rate = .0002917

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Persistency refund = 5,000 x .0002917 = $1.46

<TABLE>
<CAPTION>
Variable Account Loan Division
---------------- -------------
<S> <C> <C>

Before Persistency Refund $5,000.00 $5,000.00

After Persistency Refund $5,001.46 $5,000.00
</TABLE>

GROUP OR SPONSORED ARRANGEMENTS

For certain group or sponsored arrangements, we may reduce any sales, surrender,
administrative, and mortality and expense risk charges. We may also change the
minimum initial and additional premium requirements, or accept a lower minimum
initial Stated Death Benefit. Group arrangements include those in which a
trustee or an employer, for example, purchases Policies covering a group of
individuals on a group basis. Sponsored arrangements include those in which an
employer allows us to sell Policies to its employees on an individual basis.

Our costs for sales, administration, and mortality generally vary with the size
and stability of the group among other factors. We take all these factors into
account when reducing charges. To qualify for reduced charges, a group or
sponsored arrangement must meet certain requirements, including our requirements
for size and number of years in existence. Group or sponsored arrangements that
have been set up solely to buy Policies or that have been in existence less than
six months will not qualify for reduced charges.

We will make these and any similar reductions according to our rules in effect
when an application or enrollment form for a Policy is approved. We may change
these rules from time to time. Any variation in the administrative charge will
reflect differences in costs or services and will not be unfairly
discriminatory.

ADDITIONAL POLICY INFORMATION

THE OWNER

The original Owner is the person named as the Owner in the application. You, as
Owner, can exercise all rights and receive the benefits during the Insured's
life before the Maturity Date. All rights of the Owner are subject to the
rights of any assignee and any irrevocable Beneficiary.

THE BENEFICIARY

The Beneficiary is the person to whom we pay the Death Proceeds upon the death
of the Insured prior to the Maturity Date.

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The original Beneficiary and any Contingent Beneficiaries are named in the
application. Contingent Beneficiaries are paid Death Proceeds only if no
Beneficiary survives. If more than one Beneficiary in a class survives, they
will share the Death Proceeds equally, unless the Owner's designation provides
otherwise. If there is no designated Beneficiary or Contingent Beneficiary
surviving, we will pay the Death Proceeds to the Owner's estate. We will pay
the Death Proceeds to the most recent Beneficiary designation on file with us.

CHANGE OF OWNER OR BENEFICIARY

Prior to the Maturity Date and after the Free Look Period, you may transfer
ownership of the Policy subject to our published rules at the time of the
change.

The Owner may name a new Beneficiary unless an irrevocable Beneficiary has
previously been named. When an irrevocable Beneficiary has been designated, the
Owner and the irrevocable Beneficiary must act together to make any Beneficiary
changes.

To make any of these changes, you must send us Written Notice. The change will
take effect as of the day the notice is signed. The change will not affect any
payment made or action taken by us before recording the change at our Customer
Service Center. For possible tax consequences, see "FEDERAL TAX
CONSIDERATIONS," page 61.

RIGHT TO CONVERT POLICY

At any time within the first 24 Policy Months after issuance of the Policy or
after an increase in Stated Death Benefit, while the Policy is in force during
the life of the Insured, the Owner may convert the Policy without evidence of
insurability to a new Policy on the life of the Insured providing benefits which
do not vary with the investment experience of the Variable Account. This
conversion is accomplished by the transfer of the entire amounts in the
Subaccounts of the Variable Account to the Guaranteed Interest Account and the
allocation of all future premium payments to the Guaranteed Interest Account.
This will, in effect, serve as a conversion of the Policy to the equivalent of a
flexible premium universal life insurance policy. No charge will be imposed on
the transfer in exercising this exchange privilege. The converted policy will
be on the flexible premium adjustable life insurance plan being issued by
Southland. The converted policy will provide the same amount of death benefit
or the same net amount at risk to Southland as the Policy and will have the same
issue Age and date of issue as the Policy. The cost of insurance rates for the
converted policy will be those applicable to flexible premium adjustable life
policies in the same risk classification as the Policy and issued on the same
date as the Policy. All Policy Debt must be paid. The contestable period,
suicide period, and surrender charge period of the converted policy will be
measured from the date of issue of the Policy. The effective date of the
conversion will be the date Southland received a Written Request to convert at
its Customer Service Center. When exercising your conversion right, you are
required to return the Policy to our Customer Service Center, and we will send
to you a new policy form which will not allow you to allocate future premiums to
Subaccounts of the Variable Account.

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REINSTATEMENT

If coverage ends because a sufficient premium is not paid during a grace period,
the Policy may be reinstated within five (5) years after the lapse, subject to
compliance with certain conditions, including the payment of a necessary premium
and submission of satisfactory evidence of insurability. See your Policy for
further information.

OTHER POLICY PROVISIONS

If an Age or sex given in the application is misstated, the amounts payable or
benefits provided by the Policy shall be those that the premium would have
bought at the correct Age or sex.

We cannot contest this Policy after is has been in force for two years from the
Policy Date during the Insured's lifetime except for non-payment of premium. No
benefits added to your Policy after the Policy Date can be contested after they
have been in force for two years from the effective date of such benefit, during
the Insured's lifetime except for non-payment of premium.

We must receive any election, designation, change, assignment, or any other
change request you make in writing. We may require a return of your Policy for
any Policy change or for paying Death Benefits. If your Policy has been lost,
we will require that you complete and return a "Policy Replacement Form." The
effective date of any change will be the date the request was signed. Any
change will not affect payments made or action taken by us before the change is
recorded at our Customer Service Center.

You may assign this Policy as collateral security upon Written Notice to us.
Once it is recorded with us, the rights of the Owner and Beneficiary are subject
to the assignment. It is your responsibility to make sure the assignment is
valid.

AUTHORITY TO CHANGE POLICY TERMS

Only the President, a Vice President, or the Secretary of the Company has
authority to agree on behalf of the Company to any alteration of the Policy or
to any waiver of the right or requirements of the Company.

This Policy is intended to qualify as a life insurance policy under the Code.
To that end, all terms and provisions of the Policy shall be interpreted or
implemented to ensure or maintain such qualification.

We reserve the right to amend this Policy, to reflect any clarifications or
changes that may be needed or are appropriate, or to conform it to any
applicable changes in the tax requirements, in order to qualify the Policy as a
life insurance policy under the Code. We will send you Written Notice of such
amendments.

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ADDITIONAL BENEFITS

Your Policy may include additional benefits, which are also attached to the
Policy by Rider. A charge will be deducted monthly from your Accumulation Value
for each additional benefit you choose. These benefits may be canceled at any
time. More details will be included in your Policy if you choose any of these
benefits. A Policy may not contain both the Waiver of Specified Premium Rider
and the Waiver of Cost of Insurance Rider at the same time.

From time to time we may make available Riders other than those listed below.
Contact your registered representative for a complete list of the Riders
available.

ACCIDENTAL DEATH BENEFIT RIDER

This Rider will pay the benefit amount selected by you if the Insured dies as a
result of an accident or if the Insured dies within 90 days of an injury
sustained in an accident and the death occurs prior to the Insured's Age 70.
The minimum amount of coverage is $5,000 and the maximum amount is the Stated
Death Benefit.

ADJUSTABLE TERM INSURANCE RIDER

The Death Proceeds may be increased by adding the Adjustable Term Insurance
Rider on the life of the Insured. As the name suggests, the Adjustable Term
Insurance Rider adjusts over time.

At issue, you determine a schedule of death benefits called the Target Death
Benefit which you establish at levels to meet your projected needs in the
future. You may set the Target Death Benefit to vary as often as each Policy
Year. The Target Death Benefit will be listed in the schedule attached to the
Policy.

Subject to our rules, the Target Death Benefit schedule may be changed after
issue. See "DEATH BENEFIT AND CHANGES IN DEATH BENEFIT TYPE," page 41.

The amount of Adjustable Term Insurance in force at any time is the amount
needed to fill the difference between the Target Death Benefit you have selected
and the Base Death Benefit then in effect. The Adjustable Term Insurance Rider
is dynamic in that it adjusts daily for variations in the Base Death Benefit
under the Policy (i.e., changes resulting from the federal income tax law
definition of life insurance test you have chosen under option 1 or 2).

For example, assume the Base Death Benefit varies according to the following
schedule. The Adjustable Term Insurance Rider will adjust to provide Death
Proceeds equal to the Target Death Benefit in each year:

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<PAGE>

Base Death Benefit Target Death Benefit Adjustable Term Insurance
Rider Amount
<S> <C> <C>
$201,500 $250,000 $48,500
$202,500 $250,000 $47,500
$202,250 $250,000 $47,750
</TABLE>

Since the Adjustable Term Insurance Rider is dynamic, it is possible that the
Term Rider amount may be eliminated entirely as a result of increases in the
Base Death Benefit under the Policy. Using the example outlined above, if the
Base Death Benefit under the Policy grew to $250,000, the Adjustable Term
Insurance Rider amount would be reduced to zero. (It can never be reduced below
zero.) Even though the Adjustable Term Insurance Rider amount is reduced to
zero, the Rider will remain in effect until you choose to remove it from your
Policy. Therefore, if the Base Death Benefit under the Policy is subsequently
reduced below the Target Death Benefit you have applied for, the Adjustable Term
Insurance Rider amount will reappear as needed to maintain the Target Death
Benefit at the requested level. Withdrawals may reduce the amount of the Target
Death Benefit. See "WITHDRAWALS," page 37.

We generally restrict the amount of the Target Death Benefit to an amount not
more than 500% of the Stated Death Benefit. For example, if the Stated Death
Benefit is $100,000 then the maximum amount of Target Death Benefit we will
allow will be $500,000.

Given the flexible nature of the Adjustable Term Insurance Rider, there is no
defined premium for the amount of coverage. Instead, a cost of insurance charge
is deducted monthly from your Accumulation Value for the Adjustable Term
Insurance Rider amount in effect. These cost of insurance charges may be lower
than the rates applicable to the Base Death Benefit in the early Policy Years,
and may be higher in the later Policy Years. See "Cost of Insurance Charge,"
page 51. Since there is no defined premium related to the Adjustable Term
Insurance Rider, there are no sales or Surrender Charges associated with this
coverage; therefore, any increase in the Target Death Benefit which does not
increase the Stated Death Benefit will not increase the total Surrender Charge
for your Policy; any decrease in the Adjustable Term Insurance Rider coverage
will not cause a Surrender Charge to be incurred. See "DEATH BENEFIT AND
CHANGES IN DEATH BENEFIT TYPE," page 41.

The Adjustable Term Insurance Rider provides life insurance coverage on the
Insured as long as the Cash Surrender Value is sufficient to pay all of the
deductions that are taken out of your Net Accumulation Value each month.

ADDITIONAL INSURED RIDER

This Rider allows you to provide for death benefits upon the death of immediate
family members of the Insured. A maximum of nine Additional Insured Riders may
be added to your Policy.

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The minimum amount of coverage for each Rider is $10,000 and the maximum
coverage for all Additional Insured Riders combined equals five times the Stated
Death Benefit of your Policy.

CHILDREN'S INSURANCE RIDER

This Rider will allow you to add death benefit coverage on your children. It
also provides that you may cover children upon birth or legal adoption without
presenting evidence of insurability to us. The minimum amount of coverage is
$1,000 per child and the maximum amount of coverage is $10,000 per child.

EXCHANGE OF INSURED RIDER

This Rider allows you to change the person insured under your Policy. If you do
so, the cost of insurance charge may change, but we will not change the Policy
values or the Surrender Charge. There is no charge for this Rider. The
exercise of this Rider may have adverse tax consequences. For federal tax
purposes, the exercise of this Rider is treated as a surrender of the Policy.
Consult your tax advisor. See "FEDERAL TAX CONSIDERATIONS," page 61.

GUARANTEED INSURABILITY RIDER

This Rider will allow you to increase your Stated Death Benefit without
providing us with evidence that the Insured remains insurable during the Policy.
Increases are limited in amount and timing.

WAIVER OF THE COST OF INSURANCE RIDER

This Rider provides that during the total disability of the Insured, while the
Policy remains in force, the monthly expense charges, cost of insurance charges
and Rider charges will be waived and therefore not deducted from your Net
Accumulation Value.

WAIVER OF SPECIFIED PREMIUM RIDER

This Rider provides that during the total disability of the Insured, while the
Policy remains in force, a specified premium will be credited monthly to the
Policy. In your application you select the amount of premium, within limits,
that will be waived.

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FEDERAL TAX CONSIDERATIONS

The Following Discussion is General and
Is Not Intended as Tax Advice

Introduction

The following summary provides a general description of the federal income tax
considerations associated with your purchase of the Policy and does not purport
to be complete or to cover all situations. Southland advises that counsel or
other competent tax advisors should be consulted for more complete information.
This discussion is based upon Southland's understanding of the present federal
income tax laws as they are currently interpreted by the Internal Revenue
Service (the "Service"). No representation is made as to the likelihood of
continuation of the present federal income tax laws or of the current
interpretations by the Service.

Tax Status of the Policy

Code section 7702 sets forth the definition of a life insurance contract for
federal tax purposes. The Secretary of the Treasury (the "Treasury") is
authorized to prescribe regulations implementing section 7702. While proposed
regulations and other interim guidance has been issued, final regulations have
not been adopted. In short, guidance as to how section 7702 is to be adopted is
limited. If a Policy were determined not to be a life insurance contract for
purposes of section 7702, such Policy would not qualify for the favorable tax
treatment normally provided to a life insurance policy.

With respect to a Policy issued on the basis of a standard rate class, Southland
believes (largely in reliance on IRS Notice 88-128 and the proposed regulations
under section 7702, issued on July 5, 1991) that such a Policy should meet the
section 7702 definition of a "life insurance contract."

With respect to a Policy that is issued on a substandard basis (i.e., a premium
class involving higher than standard mortality risk), there is less guidance, in
particular as to how the mortality and other expense requirements of section
7702 should be applied in determining whether such a Policy meets the section
7702 definition of a life insurance contract.

If it is subsequently determined that a Policy does not satisfy section 7702,
Southland may take whatever steps are appropriate and necessary to attempt to
cause such a Policy to comply with section 7702. For these reasons, Southland
reserves the right to restrict Policy transactions as necessary to attempt to
continue its qualification as a life insurance contract under section 7702.

In addition to the definitional test described above, section 817(h) mandates
that the investments of the Variable Account must be "adequately diversified" in
accordance with Treasury regulations in order for the Policy to qualify as a
life insurance contract under section 7702 of the

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Code. The Variable Account, through the Portfolios, intends to comply with the
diversification requirements prescribed in Treas. Reg. (S)1.817-5, which affect
how the Portfolio's assets are to be invested.

In certain circumstances, owners of variable life insurance contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable contract owner's gross income. The Service has stated in published
rulings that a variable contract owner will be considered the owner of separate
account assets if the contract owner possesses incidents of ownership in those
assets, such as the ability to exercise investment control over the assets. The
Treasury also announced, in connection with the issuance of temporary
regulations concerning diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
Policyowner), rather than the insurance company, to be treated as the owner of
the assets in the account." This announcement also stated that guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts without being treated as
owners of the underlying assets."

The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the Service in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating premium payments and
policy values. These differences could result in an Owner being treated as the
owner of a pro rata portion of the assets of the Variable Account. In addition,
Southland does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury has stated it expects to issue.
Southland therefore reserves the right to modify the Policy as necessary to
attempt to prevent an Owner from being considered the owner of a pro rata share
of the assets of the Variable Account or to otherwise qualify the Policy for
favorable tax treatment.

The Policies may be used in various arrangements, including nonqualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, retiree medical benefit plans and others. The tax
consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Southland does not guarantee the
tax treatment of any such arrangements. Therefore, if you are contemplating the
use of the Policies in any arrangement the value of which depends in part on its
tax consequences, you should be sure to consult a qualified tax advisor
regarding the tax attributes of the particular arrangement.

The following discussion assumes that the Policy will qualify as a life
insurance contract for federal income tax purposes.

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Tax Treatment of Policy Benefits

In General. Southland believes that the proceeds and cash value increases of a
Policy should be treated in a manner consistent with a flexible-benefit life
insurance policy for federal income tax purposes. Thus, the Death Benefit under
the Policy should be excludable from the gross income of the Beneficiary under
Code section 101(a)(1).

Depending on the circumstances, the exchange of a Policy, a change in the
Policy's Death Benefit Option (i.e., a change from Option A to Option B or vice
versa), a policy loan, a Withdrawal, a surrender, or an assignment of the Policy
may have federal income tax consequences. In addition, federal, state and local
transfer, and other tax consequences of ownership or receipt of Policy proceeds
depend on the circumstances of each Owner or Beneficiary.

Generally, the Owner will not be deemed to be in constructive receipt of the
Accumulation Value, including increments thereof, until there is a distribution.
The tax consequences of distributions from, and loans taken from or secured by a
Policy, depend on whether the Policy is classified as a "Modified Endowment
Contract." Whether a Policy is or is not a modified endowment contract, upon a
complete surrender or lapse of a Policy, or when benefits are paid at such a
Policy's maturity, if the amounts received plus the amount of indebtedness
exceeds the total investment in the Policy the excess will generally be treated
as ordinary income subject to tax.

Modified Endowment Contracts. Code section 7702A establishes a class of life
insurance contracts designated as "Modified Endowment Contracts," which applies
to Policies entered into or materially changed after June 20, 1988.

Due to the Policy's flexibility, classification as a Modified Endowment Contract
will depend on the individual circumstances of each Policy. In general, a
Policy will be a Modified Endowment Contract if the accumulated premiums paid at
any time during the first seven Policy Years exceeds the sum of the net level
premiums which would have been paid on or before such time if the Policy
provided for paid-up future benefits after the payment of seven level annual
premiums. The determination of whether a Policy will be a Modified Endowment
Contract after a material change generally depends upon the relationship of the
Death Benefit and Policy Value at the time of such change and the additional
premiums paid in the seven years following the material change.

The rules relating to whether a Policy will be treated as a Modified Endowment
Contract are extremely complex and cannot be adequately described in the limited
confines of this summary. Therefore, a current or prospective Owner should
consult with a competent advisor to determine whether a policy transaction will
cause the Policy to be treated as a Modified Endowment Contract. Southland
will, however, monitor Policies and will attempt to notify an Owner on a timely
basis if his or her Policy is in jeopardy of becoming a Modified Endowment
Contract.

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Distributions from Policies Classified as Modified Endowment Contracts.
Policies classified as Modified Endowment Contracts will be subject to the
following tax rules. First, all distributions, including distributions upon
surrender and partial surrenders from such a Policy, are treated as ordinary
income subject to tax up to the amount equal to the excess (if any) of the
Accumulation Value immediately before the distribution over the investment in
the Policy (described below) at such time. Second, loans taken from or secured
by, such a Policy are treated as distributions from such a Policy and taxed
accordingly. Past due loan interest that is added to the loan amount will be
treated as a loan. Third, a 10 percent additional income tax is included in
income except where the distribution or loan is made on or after the Owner
attains age 59 1/2, is attributable to the Owner's becoming disabled, or is part
of a series of substantially equal periodic payments for the life (or life
expectancy) of the Owner or the joint lives (or joint life expectancies) of the
Owner and the Owner's Beneficiary.

If a Policy becomes a modified endowment contract after it is issued,
distributions that occur during the policy year it becomes a modified endowment
contract and any subsequent policy year will be taxed as distributions from a
modified endowment contract. In addition, distributions from a Policy within
two years before it becomes a modified endowment contract will be taxed as
distributions from a modified endowment contract.

Distributions From Policies Not Classified as Modified Endowment Contracts.
Distributions from a Policy that is not a Modified Endowment Contract, are
generally treated as first recovering the investment in the Policy (described
below) and then, only after the return of all such investment in the Policy, as
distributing taxable income. An exception to this general rule occurs in the
case of a decrease in the Policy's Death Benefit or any other change that
reduces benefits under the Policy in the first fifteen years after the Policy is
issued and that results in a cash distribution to the Owner in order for the
Policy to continue complying with the section 7702 definitional limits. Such a
cash distribution will be taxed in whole or in part as ordinary income (to the
extent of any gain in the Policy) under rules prescribed in section 7702.

Loans from, or secured by, a Policy that is not a Modified Endowment Contract
are not treated as distributions. Instead, such loans generally are treated as
indebtedness of the Owner.

Finally, neither distributions (including distributions upon surrender) nor
loans from, or secured by, a Policy that is not Modified Endowment Contract are
subject to the 10 percent additional tax.

Policy Loans. Generally, consumer interest paid on any loan under a Policy
which is owned by an individual is not deductible. The deduction of interest on
Policy loans is further restricted by section 264 of the Code. Before taking a
Policy loan, an Owner should consult a tax adviser as to the tax consequences of
such a loan.

Investment in the Policy. Investment in the Policy means (i) the aggregate
amount of any premiums or other consideration paid for a Policy, minus (ii) the
aggregate amount received

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<PAGE>

under the Policy which is excluded from gross income of the Owner (except that
the amount of any loan from, or secured by, a Policy that is a Modified
Endowment Contract, to the extent such amount is excluded from gross income,
will be disregarded), plus (iii) the amount of any loan from, or secured by a
Policy that is a Modified Endowment Contract to the extent that such amount is
included in the gross income of the Owner.

Multiple Policies. All Modified Endowment Contracts that are issued by
Southland (and its affiliates) to the same Owner during any calendar year are
treated as one Modified Endowment Contract for purposes of determining the
amount includable in the gross income under Code section 72(e).

OTHER INFORMATION

REPORTS TO OWNERS

Southland maintains records and accounts of all transactions involving the
Policy, the Guaranteed Interest Account and the Variable Account.
Each year, we will send you a report that shows current information regarding
your Policy. This report will show for the last Policy Year the current
Accumulation Value, Cash Surrender Value and Premiums paid since the last
report. The report will also show the allocation of your Accumulation Value as
of the date of the report and the amounts added to or deducted from your
Subaccount Accumulation Values and Guaranteed Interest Account Accumulation
Value since the last report. The report will include any other information that
may be currently required by the insurance supervisory official of the
jurisdiction in which the Policy is delivered.

We will also send you copies of any shareholder reports of the Portfolios in
which the Subaccounts invest, as well as any other reports, notices or documents
required by law to be furnished to Policyowners.

DISTRIBUTION OF THE POLICIES

ING America Equities, Inc. is principal underwriter and distributor of the
Policies as well as of other contracts issued through the Variable Account and
other separate accounts of Southland. ING America Equities, Inc. is an
affiliate of Southland. It is a corporation organized under the laws of the
State of Colorado in 1993. Its officers are located at 1290 Broadway, Denver,
Colorado, 80203-1290. It is registered with the SEC as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc. ("NASD").

ING America Equities, Inc. serves as underwriter/distributor for other separate
accounts registered with the SEC. We pay ING America Equities, Inc. for acting
as principal underwriter under a distribution agreement. The Policy will be
offered on a continuous basis and Southland does not anticipate discontinuing
the offer.

ING America Equities, Inc. will enter into sales agreements with broker-dealers
to solicit for the sale of the Policies through registered representatives who
are licensed to sell securities and

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variable insurance products. Registered representatives who sell the Policy
will be paid a maximum sales commission of approximately 85% of all premiums
paid in the first Policy Year up to one Target Premium, and 3% of premiums paid
in the first Policy Year in excess of one Target Premium. An additional 3% is
paid on premiums received in Policy Years 2 through 10. In addition, certain
bonuses and managerial compensation may be paid.

VOTING PRIVILEGES

In accordance with its view of current applicable law, the Company will vote
Portfolio shares held in the Variable Account at regular and special shareholder
meetings of the Portfolios in accordance with instructions received from persons
having voting interests in the corresponding Subaccounts. If, however, the 1940
Act or any regulation thereunder should be amended, or if the present
interpretation thereof should change, or the Company otherwise determines that
it is allowed to vote the shares in its own right, it may elect to do so.

The number of votes that an Owner has the right to instruct will be calculated
separately for each Subaccount, and may include fractional votes. An Owner
holds a voting interest in each Subaccount to which the Variable Accumulation
Value is allocated.

For each Owner, the number of votes attributable to a Subaccount will be
determined by dividing the Accumulation Value attributable to that Owner's
Policy in that Subaccount by the net asset value per share of the Portfolio in
which that Subaccount invests.

The number of votes available to an Owner will be determined as of the date
coincident with the date established by the Portfolio for determining
shareholders eligible to vote at the relevant meeting of the Portfolio's
shareholders. Voting instructions will be solicited by written communication
prior to such meeting in accordance with procedures established for the
Portfolio. Each Owner having a voting interest in a Subaccount will receive
proxy materials and reports relating to any meeting of shareholders of the
Portfolio in which that Subaccount invests.

Portfolio shares as to which no timely instructions are received and shares held
by the Company in a Subaccount as to which no Owner has a beneficial interest
will be voted in proportion to the voting instructions which are received with
respect to all Policies participating in that Subaccount. Voting instructions
to abstain on any item to be voted upon will be applied to reduce the total
number of votes eligible to be cast on a matter. Under the 1940 Act, certain
actions affecting the Variable Account (such as some of those described under
"CHANGES RELATING TO THE VARIABLE ACCOUNT," page 26) may require Owner
approval. In that case, you will be entitled to vote in proportion to your
Variable Accumulation Value.

We may, if required by state insurance officials, disregard Owner voting
instructions if such instructions would require shares to be voted so as to
cause a change in sub-classification or investment objectives of one or more of
the Portfolios, or to approve or disapprove an investment advisory agreement.
In addition, we may under certain circumstances disregard voting

-66-
<PAGE>

instructions that would require changes in the investment policy or investment
adviser of one or more of the Portfolios, provided that we reasonably disapprove
of such changes in accordance with applicable federal regulations. If we ever
disregard voting instructions, we will advise Owners of that action and of our
reasons for such action in the next semiannual report. Finally, we reserve the
right to modify the manner in which we calculate the weight to be given to pass-
through voting instructions where such a change is necessary to comply with
current federal regulations or the current interpretation thereof.

LEGAL PROCEEDINGS

There are no legal or administrative proceedings to which the Variable Account
is a party or to which the assets of the Variable Account are subject.
Southland, as an insurance company, is ordinarily involved in litigation. We do
not believe that any current litigation or administrative proceeding is material
to Southland's ability to meet its obligations under the Policy or to the
Variable Account nor do we expect to incur significant losses from such actions.
ING America Equities, Inc. is not involved in any legal or administrative
proceedings that are material with respect to the Variable Account or the
Variable Account's assets.

-67-
<PAGE>

SOUTHLAND'S DIRECTORS AND OFFICERS

Southland Life Insurance Company is managed by a board of directors. The
following table sets forth the name, address and principal occupations during
the past five years of each of Southland's directors.

Position with Principal Occupation During the
Name and Address Southland Life Past Five Years
- --------------------------------------------------------------------------------
R. Glenn Hilliard Chairman Director, Life of Georgia (since
5780 Powers Ferry Road, N.W. 1994); President & Chief
Atlanta, GA 30327-4390 Executive Officer, ING North
America Insurance Corp. (since
1993); Chief Executive Officer &
Director, ING America Life Corp.
(since 1993); Chairman of the
Board and Chief Executive
Officer, Southland Life (since
1993); Chief Executive Officer,
ING America Life Corp. (1993);
Chief Executive Officer &
Director, Security Life and
Denver Insurance Company (since
1989).
- --------------------------------------------------------------------------------
Robert J. St. Jacques Vice Chief Executive Officer,
5780 Power Ferry Road, N.W. Chairman Southland Life Insurance Company
Atlanta, GA 30327-4390 (since 1995); President & Chief
Executive Officer, ING America
Life Corporation (since 1994);
President & Chief Executive
Officer, The Laurentian Group
(1990 - 1994); Chairman & Chief
Executive Officer, The Imperial
Life Insurance Co. of Canada
(1990-1994).
- --------------------------------------------------------------------------------
Michael W. Cunningham Director Executive Vice President, Chief
5780 Powers Ferry Road, N.W. Financial Officer, ING North
Atlanta, GA 30327-4390 America Insurance Corporation
(since June, 1991); Executive
Vice President, Chief Financial
Officer, American Income Life
(1991); Senior Vice President,
Chief Financial Officer, Integon
Corporation (1987-1991).
- --------------------------------------------------------------------------------

-68-
<PAGE>

Position with Principal Occupation During the
Name and Address Southland Life Past Five Years
- --------------------------------------------------------------------------------
Linda B. Emory Director Executive Vice President, ING
5780 Powers Ferry Road, N.W. North America Insurance
Atlanta, GA 30327-4390 Corporation (since 1994);
Director, Life of Georgia (since
1991); Senior Vice President,
Life of Georgia (1990-1994).
- --------------------------------------------------------------------------------
James D. Thompson Director President & Chief Operating
5780 Powers Ferry Road, N.W. Officer, Southland Life
Atlanta, GA 30327-4390 Insurance Company (since 1995);
Executive Vice President & Chief
Financial Officer, ING America
Life Corporation (1993-1995);
Vice President, ITT Corporation
(1992-1993); Executive Vice
President, ITT Corporation
(1990-1993).
- --------------------------------------------------------------------------------
P. Randall Lowery Director Senior Vice President &
5780 Powers Ferry Road, N.W. Corporate Actuary, ING America
Atlanta, GA 30327-4390 Life Corporation (since 1994);
Vice President & Actuary,
Southland Life Insurance Company
(1990-1994).
- --------------------------------------------------------------------------------
Francis J. Mulcahy Director Vice President, General Counsel
5780 Powers Ferry Road, N.W. & Secretary, Life of Georgia
Atlanta, GA 30327-4390 (since 1995); Vice President,
General Counsel & Secretary,
Southland Life Insurance Company
(since 1995); Vice President &
Secretary, Life Insurance
Company of Georgia (since 1994);
Vice President & Secretary,
Southland Life Insurance Company
(since 1994); General Counsel,
Southland Life Insurance Company
(1989-1994); Associate General
Counsel, Southland Life
Insurance Company (1989-1994);
Associate General Counsel, Life
Insurance Company of Georgia
(1983-1994).

-69-
<PAGE>

The following table sets forth the names, addresses and principal occupations
during the last five years of the senior officers of Southland (other than
officers who are members of Southland's board of directors).

Position with Principal Occupation During
Name and Address Southland Life the Past Five Years
- --------------------------------------------------------------------------------
John R. Barmeyer Senior Vice Director, Life of Georgia
5780 Powers Ferry Road, N.W. President, (since 1992); General Counsel,
Atlanta, GA 30327-4390 Chief Legal ING America Life Insurance
Officer Corporation, and Senior Vice
President, General Counsel &
Secretary, Life of Georgia
(since 1992); Vice President,
General Counsel & Secretary,
Life of Georgia (1990-1992).
- --------------------------------------------------------------------------------
P. Thomas Chester Senior Vice Senior Vice President,
5780 Powers Ferry Road, N.W. President & Marketing, (since 1994);
Atlanta, GA 30327-4390 Chief President, Diversified
Marketing (1991-1994); President & Senior
Officer Vice President, Marketing,
Surety Life Insurance Company
- --------------------------------------------------------------------------------

Alan Jeglinski Senior Vice Senior Vice President,
5780 Powers Ferry Road, N.W. President - Operations (since 1995); Vice
Atlanta, GA 30327-4320 Operations President -Administration
(1994-1995); Vice President,
Property and Casualty
(1993-1994); General Manager,
Orion Insurance, PLC
(1985-1993)
- --------------------------------------------------------------------------------

Pamela Crane Senior Vice Senior Vice President -
5780 Powers Ferry Road, N.W. President - Actuarial (since 1995); Vice
Atlanta, GA 30327-4390 Actuarial President - BIO (1994 - 1995);
Consultant, Tillinghast
(1988-1994)
- --------------------------------------------------------------------------------

A fidelity bond in the amount of $6 million in Guilders covering Southland's
officers and employees has been issued by NN Reinsurance Company, N.V.

EXPERTS

The financial statements of Southland Life Insurance Company at
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young, LLP independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in

-70-
<PAGE>

reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

Actuarial matters in this prospectus have been examined by Pamela M. Crane, who
is Senior Vice President - Finance/Actuarial of Southland Life Insurance
Company. Her opinion on actuarial matters is filed as an exhibit to the
Registration Statement we filed with the SEC.

LEGAL MATTERS

The legal matters in connection with the Policy described in this Prospectus
have been passed on by Francis J. Mulcahy, Vice President, Secretary and General
Counsel of Southland. Sutherland, Asbill & Brennan of Washington, D.C. has
provided advice on certain matters relating to the federal securities laws.

FINANCIAL STATEMENTS

The audited financial statements of Southland Life Insurance Company at
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, (as well as the auditors' report thereon) are included
beginning on the next page.

This prospectus does not contain financial statements for the Southland Separate
Account L1 because it has not yet commenced operations, has no assets or
liabilities and has received no income nor incurred any expenses as of the date
of this prospectus.

-71-
<PAGE>

Financial Statements

Southland Life Insurance Company

Years ended December 31, 1995, 1994 and 1993
--------------------------------------------
with Report of Independent Auditors
-----------------------------------
<PAGE>

Southland Life Insurance Company

Financial Statements

Years ended December 31, 1995, 1994 and 1993

CONTENTS

Report of Independent Auditors............................. l

Audited Financial Statements

Balance Sheets............................................. 2
Statements of Income....................................... 4
Statements of Stockholder's Equity......................... 5
Statements of Cash Flows................................... 6
Notes to Financial Statements.............................. 8

<PAGE>

[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]

Report of Independent Auditors

Board of Directors
Southland Life Insurance Company

We have audited the accompanying balance sheets of Southland Life Insurance
Company as of December 31, 1995 and 1994, and the related statements of
income, stockholder's equity, and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southland Life Insurance
Company at December 31, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.

As discussed in Note 1 to the financial statements, in 1994 and 1993 the
Company changed its method of accounting for investments in debt and equity
securities and income taxes, respectively.

/s/ ERNST & YOUNG LLP

Atlanta, Georgia
April 5, 1996

1
<PAGE>

Southland Life Insurance Company

Balance Sheets
<TABLE>
<CAPTION>

DECEMBER 31
1995 1994
--------------------------
(In Thousands)
<S> <C> <C>
ASSETS
Investments (Notes 1, 2, 3 and 4):
Fixed maturities:
A vailable-for-sale, at fair value (amortized cost: 1995-
$793,055; 1994 - $645,554) $ 871,637 $ 623,831

Held-to-maturity, at amortized cost (fair value: 1994 -
$201,704) - 200,554

Equity securities, at fair value (cost: 1995 - $614; 1994 -
$1,532) 764 1,602

Mortgage loans on real estate 300,671 231,406
Investment real estate, at cost, less accumulated
depreciation (1995 - $10; 1994 - $6) 190 515
Policy loans 80,164 79,437
Other long-term investments - 59
-----------------------
Total investments 1,253,426 1,137,404

Cash 1,268 10,831
Accrued investment income 15,951 16,728
Reinsurance recoverable:
Paid benefits 8,886 188
Unpaid benefits and IBNR 16,400 2,614
Prepaid reinsurance premiums 282,943 240,824
Deferred policy acquisition costs 145,431 133,543
Present value of future profits less accumulated
amortization (1995 - $163,605; 1994 - $145,535) 78,204 100,602
Goodwill less accumulated amortization (1995 - $9,540;
1994 - $7,999) 50,921 52,462
Property and equipment, at cost, less accumulated
depreciation (1994 - $105) - 626
Current federal income taxes (Note 8) - 1,797
Other assets 5,841 6,634
-----------------------
Total assets $1,859,271 $1,704,253
=======================

</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
--------------------------
(In Thousands,
Except Share Amounts)
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Future policy benefits:
Life and annuity reserves $1,052,649 $ 944,710
Accident and health reserves 10,473 10,996
Guaranteed investment contracts 276,365 233,691
Policyholders' funds 2,890 3,292
Advance premiums 83 91
Accrued dividends and dividends on deposit 764 808
Unpaid claims 30,383 11,001
-----------------------
Total future policy benefits 1,373,607 1,204,589

Accounts payable and accrued expenses 5,383 3,987
Indebtedness to related parties 5,9 39 11,200
Other liabilities 27,146 31,946
Federal income taxes payable (Note 8):
Current 5,816 -
Deferred 55,236 29,130
-----------------------
Total liabilities 1,473,127 1,280,852

Stockholder's equity (Note 9):
Common stock, $3 par value:
Authorized-2,550,000 shares
Issued and outstanding-2,500,000 shares 7,500 7,500
Additional paid-in capital 254,353 366,536
Net unrealized investment gains (losses) (Note 1) 37,906 (8,874)
Retained earnings 86,385 58,239
-----------------------
Total stockholder's equity 386,144 423,401
-----------------------
Total liabilities and stockholder's equity $1,859,271 $1,704,253
=======================
</TABLE>
See accompanying notes.

3
<PAGE>

Southland Life Insurance Company

Statements of Income
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
--------------------------------
(In Thousands)
--------------
<S> <C> <C> <C>
Revenues:
Traditional life insurance premiums $ 39,182 $ 36,116 $ 38,343
Health insurance premiums 60,318 18,495 10,002
Universal life and investment product charges 67,073 56,735 45,184
Reinsurance assumed 201 1,740 1,519
-----------------------------------
166,774 113,086 95,048
Reinsurance ceded premiums (45,419) (17,501) (10,669)
-----------------------------------
121,355 95,585 84,379
Net investment income 103,279 93,802 89,169
Net realized gains (losses) on investments 2,880 (1,345) 6,254
Other revenues 797 2,148 1,923
-----------------------------------
Total revenues 228,311 190,190 181,725

Benefits and expenses:
Insurance claims and benefits incurred:
Traditional life insurance:
Death benefits 24,305 24,124 26,634
Other benefits 21,661 21,830 22,444
Universal life and investment contracts:
Interest credited to account balances 31,465 25,181 21,462
Death benefit incurred in excess of account balances 33,902 12,690 13,697
Health benefits 28,883 8,841 6,730
Increase in policy reserves and other funds 94 3,757 57
Reinsurance recoveries (39,883) (9,489) (8,092)
-----------------------------------
100,427 86,934 82,932

Commissions 15,229 8,178 6,457
Insurance operating expenses (Note 11) 20,924 18,945 19,273
-------
Amortization of goodwill 1,541 1,541 1,361
Amortization of present value of future profits, net of
accrued interest 10,155 10,414 11,253

Amortization of deferred policy acquisition costs 13,326 10,060 8,595
-----------------------------------
161,602 136,072 129,871
-----------------------------------

Income before federal income taxes and the cumulative
effect of changes in accounting methods 66,709 54,118 51,854
Federal income taxes (Note 8) 23,828 18,722 12,551
-----
-----------------------------------
Net income before the cumulative effect of the changes
in accounting methods 42,881 35,396 39,303
Cumulative effect of the changes in accounting
methods (Note 1) - - (7,823)
-------
-----------------------------------
Net income $ 42,881 $ 35,396 $ 31,480
===================================
</TABLE>
See accompanying notes.
- ----------------------
4
<PAGE>

Southland Life Insurance Company

Statements of Stockholder's Equity
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
-----------------------------------
(In Thousands)
------------
<S> <C> <C> <C>
Common stock:
Balance at beginning and end of year $ 7,500 $ 7,500 $ 7,500
===================================
Additional paid-in capital:
Balance at beginning of year $ 366,536 $366,536 $366,536
Return of capital to stockholder (112,183) - -
-----------------------------------
Balance at end of year $ 254,353 $366,536 $366,536
===================================
Net unrealized investment gains (losses) on securities:
Balance at beginning of year $ (8,874) $ (23) $ 328
Adjustment to beginning balance for adoption of SFAS
115, net of income taxes of $20,440 and effect on
DPAC and PVFP of $14,692 (net of income taxes of
$7,911) (Note 1) - 23,268 -
------
Change in net unrealized investment gains (losses),
net of tax 65,248 (52,010) (351)
Effect on DPAC and PVFP of unrealized gains
(losses) on fixed maturities, net of tax (18,468) 19,891 -
-----------------------------------
Balance at end of year $ 37,906 $ (8,874) $ (23)
===================================
Retained earnings:
Balance at beginning of year $ 58,239 $ 51,543 $ 36,663
Net income 42,881 35,396 31,480
Dividends to stockholder (14,735) (28,700) (16,600)
-----------------------------------
Balance at end of year $ 86,385 $ 58,239 $ 51,543
===================================
Total stockholder's equity $ 386,144 $423,401 $425,556

</TABLE>

See accompanying notes.
- ----------------------
5
<PAGE>

Southland Life Insurance Company

Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31

1995 1994 1993
-----------------------------------
(In Thousands)
-----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 42,881 $ 35,396 $ 31,480
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in future policy benefits 92,996 189,867 96,138
Net increase (decrease) in federal income taxes 8,528 (5,682) 1,946
Increase (decrease) in accounts payable and accrued
expenses and other liabilities (3,404) 3,967 (3,186)
(Increase) decrease in accrued investment income 777 (2,092) 584
Net realized investment (gains) losses (2,880) 1,345 (6,254)
(Increase) decrease in reinsurance recoverable (22,484) 197 907
Increase in prepaid reinsurance premiums (42,119) (161,654) (71,341)
Depreciation and amortization expense 11,708 12,001 12,722
Policy acquisition costs deferred (41,581) (38,423) (41,439)
Amortization of deferred policy acquisition costs 13,326 10,060 8,594
Cumulative effect of accounting changes - - 7,823
Other, net (1,057) (7,313) 5,485
--------------------------------
Net cash provided by operating activities 56,691 37,669 43,459

INVESTING ACTIVITIES
Securities available-for-sale:
Sales:
Fixed maturities 118,212 34,553 27,952
Equity securities 1,105 50,485 60,641
Maturities - fixed maturities 36,740 38,925 67,554
Purchases:
Fixed maturities (201,698) (143,013) (132,809)
Equity securities (186) (43,893) (55,893)
Securities held-to-maturity:
Maturities - fixed maturities 19,202 40,114 -
Purchases - fixed maturities - (43,000) -
Sale, maturity or repayment of investments:
Mortgage loans on real estate 16,613 22,069 20,975
Investment real estate 450 3,068 2,937
Other long-term investments - 250 -
</TABLE>
6
<PAGE>

Southland Life Insurance Company

Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
----------------------------------
(In Thousands)
--------------
<S> <C> <C> <C>
INVESTING ACTIVITIES (CONTINUED)
Purchase or issuance of investments:
Mortgage loans on real estate (85,580) (76,403) (50,928)
Investment real estate - (462) (374)
Policy loans, net (727) 2,812 1,945
Short-term investments, net - 14,600 (11,400)
Additions to property and equipment (62) (9) (12)
Disposal of property and equipment 780 206 75
-----------------------------------
Net cash used by investing activities (95,151) (99,490) (69,337)

FINANCING ACTIVITIES
(Decrease) increase in indebtedness to related parties (5,261) 3,968 4,410
Receipts from interest sensitive products credited to 101,462 81,927 75,635
policyholder account balances
Return of policyholder account balances on interest
sensitive policies (25,244) (16,305) (15,295)
Return of capital and dividends paid to stockholder (42,060) (23,700) (16,600)
-----------------------------------
Net cash provided by financing activities 28,897 45,890 48 ,150
-----------------------------------

Net (decrease) increase in cash (9,563) (15,931) 22,272
Cash at beginning of year 10,831 26,762 4,490
-----------------------------------
Cash at end of year $ 1,268 $ 10,831 $ 26,762
===================================

</TABLE>
SIGNIFICANT NONCASH TRANSACTIONS

During 1995, the Company transferred fixed maturity securities having a fair
value plus accrued interest of $92,305,000 and $27,325,000 of cash to the parent
company as a return of capital. This transaction was approved by state
regulatory authorities and is reflected in the accompanying statement of
stockholder's equity as a reduction to additional paid-in capital and unrealized
investment gains on securities.

Held-to-maturity fixed maturity securities having an amortized cost value of
$182,430,000 and a fair value of $199,206,000 were transferred to the available-
for-sale category on December 26, 1995.

The Company declared a $5,000,000 dividend to its parent company during 1994
which was unpaid as of December 31, 1994 and was presented as indebtedness to
related parties in the accompanying balance sheet. The dividend was paid in
cash by the Company in January 1995.

See accompanying notes.
- -----------------------
7
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements

December 31, 1995

1. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF FINANCIAL STATEMENTS

Southland Life Insurance Company (the Company) is a wholly-owned subsidiary of
Internationale Nederlanden America Life Corporation (America Life), an indirect,
wholly-owned subsidiary of Internationale Nederlanden Groep. The accompanying
financial statements have been prepared on the basis of generally accepted
accounting principles.

NATURE OF OPERATIONS

The Company's market focus is on the middle-income consumer. The life insurance
products offered address retirement accumulation, wealth transfer and estate
planning, and death protection needs. Products include universal life,
survivorship and traditional life. The Company also provides stop-loss coverage
on group health insurance. Operations are conducted through independent
producers. The Company is presently licensed in forty-eight states (all states
except for New York and Vermont), the District of Columbia, and Puerto Rico.

The significant accounting policies followed by the Company that materially
affect the financial statements are summarized below:

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

8
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING CHANGES

Effective January 1, 1993, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 109, Accounting for Income Taxes. Prior to 1993, the
Company accounted for income taxes under the provisions of APB Opinion No. 11,
Accounting for Income Taxes. As permitted under the new rules, prior years'
financial statements have not been restated. The cumulative effect of adopting
FASB Statement 109 as of January 1, 1993 was to decrease net income by
$7,800,000.

In 1993 the Company adopted FASB Statement No. 113, Accounting and Reporting
for Reinsurance of Short-Duration and Long-Duration Contracts. This statement
eliminates the practice of reporting amounts for reinsured contracts net of the
effects of reinsurance. The statement requires that reinsurance receivables and
prepaid reinsurance premiums are to be reported as assets. The statement
establishes conditions required for a contract with a reinsurer to qualify for
reinsurance accounting. Contacts that do not result in the possibility that the
reinsurer may realize significant gain or loss from the insurance risk assumed
would be accounted for as deposits. The adoption of this statement had no
effect on income before the cumulative effect of accounting changes or net
income.

In May 1993, the Financial Accounting Standards Board issued FASB Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities. The
Company adopted the provisions of the new standard for investments held as of or
acquired after January 1, 1994. In accordance with the statement, prior period
financial statements have not been restated to reflect the change in accounting
principle. The cumulative effect as of January 1, 1994 of adopting Statement
115 had no impact on income. The opening balance of stockholder's equity was
increased by $37,960,000 (net of tax of $20,440,000) to reflect the net
unrealized holding gains on securities classified as available-for-sale
previously carried at amortized cost less an adjustment for $14,692,000 (net of
tax of $7,911,000) to deferred policy acquisition costs and present value of
future profits (PVFP) for the change in expected future gross profits.

In 1994, the Company adopted the provisions of FASB Statement No. 119,
Disclosures about Derivative Financial Instruments and Fair Value of Financial
Instruments, which require disclosures about derivative financial instruments
such as futures, forwards,

9
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING CHANGES (CONTINUED)

swaps and options and other financial instruments with similar characteristics.
The statement also amends existing disclosure requirements of FASB Statement No.
105, Disclosure of Information about Financial Instruments with Off-Balance
Sheet Risk and No. 107, Disclosures about Fair Value of Financial Instruments.

Beginning in 1995, the Company adopted FASB Statement No. 114, Accounting by
Creditors for Impairment of a Loan, and FASB Statement No. 118, Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosures, which
amends Statement No. 114. Under the amended statement, the 1995 allowance for
credit losses related to loans that are identified for evaluation in accordance
with Statement 114 is based on discounted cash flows using the loan's initial
effective interest rate or the fair value of the collateral for certain
collateral dependent loans. Adoption of this standard had no impact on net
income or stockholder's equity.

INVESTMENTS

Investments are shown on the following bases:

The carrying value of fixed maturities depends on the classification of the
security: securities held-to-maturity, securities available-for-sale, and
trading securities. Management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such designation as of
each balance sheet date. Debt securities are classified as held-to-maturity
when the Company has the positive intent and ability to hold the securities to
maturity. Held-to-maturity securities are stated at amortized cost.

Debt securities not classified as held-to-maturity and marketable equity
securities are classified as available-for-sale. Available-for-sale securities
are stated at fair value, with the unrealized gains and losses, net of tax, and
deferred acquisition cost and present value of future profit adjustments,
reported in a separate component of stockholder's equity.

The Company does not hold trading securities.

10
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENTS (CONTINUED)

The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion of
discounts to maturity, or in the case of mortgage-backed securities, over the
estimated life of the security. Such amortization is included in interest
income from investments. Interest and dividends are included in net investment
income as earned.

Equity securities are reported at fair value. Mortgage loans are carried at the
unpaid balances. Investment real estate is carried at cost, less accumulated
depreciation. Investment real estate is depreciated on a straight line basis
over the estimated useful life of the respective properties. Policy loans are
carried at unpaid balances. Short-term investments are carried at cost, which
approximates fair value. Derivatives are accounted for on the same basis as the
asset hedged.

Realized gains and losses, and declines in value judged to be other-than-
temporary are included in net realized gains (losses) on investments. The cost
of securities sold is based on the specific identification method.

RECOGNITION OF PREMIUM REVENUES AND COSTS

For life and annuity contracts other than universal life or investment-type
contracts, premiums are recognized as revenues over the premium-paying period,
with valuation reserves for future benefits established on a pro-rata basis from
such premiums.

Revenues for universal life and investment-type contracts consist of policy
charges for the cost of insurance and policy administration and surrender
charges assessed during the period. Expenses include interest credited to
policy account balances and benefits incurred in excess of policy account
balances. Certain profits on limited-payment policies are deferred and
recognized over the policy term.

For accident and health policies, gross premiums are prorated over the contract
term of the policies with the unearned premium included in the policy reserves.
Anticipated investment income is considered in determining if a premium
deficiency related to short-term contracts exists.

11
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED POLICY ACQUISITION COSTS

Commissions and other costs of acquiring traditional life insurance, universal
life insurance (including interest sensitive products) and investment products
that vary with and are primarily related to the production of new and renewal
business have been deferred. Traditional life insurance acquisition costs are
being amortized over the premium-paying period of the related policies using
assumptions consistent with those used in computing policy benefit reserves.
For universal life insurance and investment products, acquisition costs are
being amortized generally in proportion to the present value (using the assumed
crediting rate) of expected gross profits from surrender charges and investment,
mortality, and expense margins. This amortization is adjusted retrospectively
when estimates of current or future gross profits to be realized from a group of
products are revised.

Deferred policy acquisition costs are adjusted to reflect changes that would
have been necessary if unrealized investment gains and losses related to
available-for-sale securities had been realized. The Company has reflected
those adjustments in the asset balance with the offset as a direct adjustment to
stockholder's equity.

FUTURE POLICY BENEFITS

Benefit reserves, with the exception of reserves for universal life-type
policies and investment products, are computed using a net level premium method
including assumptions as to investment yields, mortality, withdrawals and other
assumptions based on the Company's and industry experience, modified as
necessary to reflect anticipated trends to include provisions for possible
unfavorable deviations. Reserve interest assumptions are those deemed
appropriate at the time of policy issue, and range from 2.5% to 5%. Policy
benefit claims are charged to expense in the year that the claims are incurred.
Health reserves consist principally of unearned premiums and claim reserves.

Benefit reserves for interest sensitive products (including universal life-type
policies) and investment products are computed under a retrospective deposit
method and represent policy account balances before applicable surrender
charges. Policy benefits and claims that are charged to expense include benefit
claims incurred during the year in

12
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FUTURE POLICY BENEFITS (CONTINUED)

excess of related policy account balances. Interest crediting rates for
universal life and investment products range from 4.5% to 8.18% during 1995 and
1994, and 5% to 8.75% during 1993.

Included in life and annuity reserves is an unearned revenue reserve that
reflects the unamortized balance of excess first year policy service fees over
renewal period policy service fees on universal life and investment products.
These excess fees have been deferred and are being recognized in income over the
periods benefited, using the same assumptions and factors used to amortize
deferred policy acquisition costs.

UNPAID CLAIMS

The liabilities for unpaid claims include estimates of amounts due on reported
claims and claims that have been incurred but were not reported as of December
31. Such estimates are based on actuarial projections applied to historical
claim payment data. Such liabilities are reasonable and adequate to discharge
the Company's obligations for claims incurred but unpaid as of December 31.

GOODWILL

The excess cost of acquired subsidiaries over the sum of amounts assigned to
identifiable assets at acquisition, less liabilities assumed, is recorded as
goodwill. Generally, goodwill is amortized using the straight-line method over
forty years.

PRESENT VALUE OF FUTURE PROFITS

The present value of future profits (PVFP) represents the profits to be realized
from future premiums on insurance in-force (at the date of acquisition) from
businesses acquired. The PVFP arises from the acquisition of the Company by
America Life.

13
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRESENT VALUE OF FUTURE PROFITS (CONTINUED)

The PVFP is being amortized over the years that it is anticipated such profits
will be received. In general, this value is determined using the same
assumptions applied to compute benefit reserves and deferred policy acquisition
costs, discounted to provide an appropriate rate of return. Interest for
traditional life business is accrued at a rate of 8.45% and 9% in 1995 and 1994,
respectively, grading down to 6% over the next 14 years. Interest for universal
life business is amortized based on the credited rate.

An analysis of the PVFP for the years ended December 31 follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------------------------
(In Thousands)
<S> <C> <C> <C>
Balance at beginning of year $100,602 $107,318 $118,571
Interest accrued on unamortized balance 7,915 8,882 10,381
Amortization (18,070) (19,296) (21,634)
FAS 115 adjustment (12,243) 3,698 -
------------------------------
Balance at end of year $ 78,204 $100,602 $107,318
==============================

The estimated amount to be amortized during each of the next five years is shown below (in
thousands):

AMORTIZATION OF
PVFP
---------------
(In Thousands)

1996 $16,552
1997 14,746
1998 13,051
1999 11,579
2000 10,103

</TABLE>

14
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost less accumulated depreciation.
Depreciation for major classes of assets is calculated on a straight-line basis
over the estimated useful lives of the respective assets.

FEDERAL INCOME TAXES

Deferred federal income taxes have been provided or credited to reflect
significant temporary differences between income reported for tax and financial
reporting purposes using reasonable assumptions.

CASH FLOW INFORMATION

Cash includes cash on hand and demand deposits.

PENDING ACCOUNTING STANDARDS

In March 1995, the FASB issued Statement No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amounts.
Statement No. 121 also addresses the accounting for long-lived assets that are
expected to be disposed of. The Company will adopt Statement No. 121 in the
first quarter of 1996, and based on current circumstances, management does not
believe the effect of adoption will be material.

RECLASSIFICATIONS

Certain amounts in the 1993 and 1994 financial statements have been reclassified
to conform to the 1995 presentation.

15
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

2. FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Company's financial instruments at
December 31, 1995 and 1994 are summarized below:
<TABLE>
<CAPTION>

DECEMBER 31, 1995 DECEMBER 31, 1994
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------------------------------------------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities:
Available-for-sale $871,637 $871,637 $62 3,831 $623,831
Held-to-maturity - - 200,554 201,704
Equity securities 764 764 1,602 1,602
Commercial mortgages 300,445 331,584 231,171 231,068
Residential mortgages 226 226 235 235
Policy loans 80,164 69,383 79,437 67,279

LIABILITIES
Supplemental contracts without
life contingencies 934 934 966 966
Other policyholder funds left on
deposit 2,992 2,992 3,208 3,208
Individual and group annuities,
net of reinsurance 22,452 22,220 26,032 25,690

</TABLE>
The following methods and assumptions were used by the Company in estimating the
fair value disclosures for financial instruments:

FIXED MATURITIES AND EQUITY SECURITIES: The fair values for fixed maturities
(including redeemable preferred stocks) are based on quoted market prices, where
available. For fixed maturities not actively traded, fair values are estimated
using values obtained from independent pricing services or, in the case of
private placements and collateralized mortgage obligations and other mortgage
derivative investments, are estimated by discounting expected future cash flows
using a current market rate applicable to the yield, credit quality, and
maturity of the investments. The fair values of equity securities are based on
quoted market prices.

16
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

MORTGAGE LOANS ON REAL ESTATE: Estimated fair values for commercial real
estate loans are generated using a discounted cash flow approach. Loans in
good standing are discounted using interest rates determined by U.S. Treasury
yields on December 31 and spreads required on new loans with similar
characteristics. The amortizing features of all loans are incorporated in the
valuation. Where data on options features is available, option values are
determined using a binomial valuation method and are incorporated into the
mortgage valuation. Restructured loans are valued in the same manner; however,
these are discounted at a greater spread to reflect increased risk. Fair values
for residential loans are based on discounted cash flows and approximate
carrying value.

POLICY LOANS: The fair values for policy loans are estimated by discounting
cash flows at the interest rates charged on policy loans of similar policies
currently being issued. Loans with similar characteristics are aggregated for
purposes of the calculations.

DERIVATIVE FINANCIAL INSTRUMENTS: Fair values for on-balance-sheet derivative
financial instruments (swaps hedging fixed maturities) are based on
broker/dealer valuations or on internal discounted cash flow pricing models
taking into account current cash flow assumptions and the counterparties' credit
standing. Swaps with a fair value of $1,544,000 at December 31, 1995 and
$(4,690,000) at December 31, 1994 represent asset hedges and are reported as a
component of fixed maturity securities on the accompanying balance sheets.

OTHER INVESTMENT-TYPE INSURANCE CONTRACTS: The fair values of the Company's
deferred annuity contracts and supplemental contracts without life contingencies
are estimated based on the cash surrender value. The carrying values of other
liabilities including immediate annuities, dividend accumulations, and premium
deposits approximate their fair values.

17
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS

The amortized cost and estimated fair value of investments in fixed maturities
and equity securities are as follows at December 31, 1995:
<TABLE>
<CAPTION>

COST OR GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED GAINS UNREALIZED LOSSES FAIR
COST VALUE
-------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $ 41,415 $ 8,310 $ - $ 49,725
States, municipalities and political
subdivisions 6,208 232 - 6,440

Public utilities securities 48,451 6,217 - 54,668
Corporate securities 418,769 47,814 64 466,519
Mortgage-backed securities 239,419 12,677 397 251,699
Other asset-backed securities 38,793 2,284 35 41,042
Derivatives hedging fixed maturities - 1,774 230 1,544
-------------------------------------------------------------
Total fixed maturities 793,055 79,308 726 871,637

Preferred stocks 530 73 12 591
Common stocks 84 108 19 173
-------------------------------------------------------------
Total $793,669 $79,489 $757 $872,401
=============================================================
</TABLE>

18
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

The amortized cost and estimated fair value of investments in fixed maturities
and equity securities are as follows at December 31, 1994:
<TABLE>
<CAPTION>

COST OR ESTIMATED
AMORTIZED GROSS GROSS FAIR
COST UNREALIZED GAINS UNREALIZED LOSSES VALUE
------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $ 43,654 $ 1,159 $ 298 $ 44,515
Public utilities securities 29,493 801 658 29,636
Corporate securities 326,240 3,385 11,658 317,967
Mortgage-backed securities 227,008 4,514 13,171 218,351
Other asset-backed securities 19,159 116 1,223 18,052
Derivatives hedging fixed maturities - - 4,690 (4,690)
------------------------------------------------------------
Total fixed maturities 645,554 9,975 31,698 623,831

Preferred stocks (nonredeemable) 1,532 7 18 1,521
Common stocks - 81 - 81
------------------------------------------------------------
Total $647,086 $10,063 $31,716 $625,433
============================================================

Held-to -maturity:
Public utilities securities $ 23,391 $ 1,008 $ - $ 24,399
Corporate securities 168,229 3,881 3,537 168,573
Other asset-backed securities 8,934 56 258 8,732
------------------------------------------------------------
Total $200,554 $ 4,945 $ 3,795 $201,704
============================================================

</TABLE>

19
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

Held-to-maturity fixed maturity securities having an amortized cost of
$182,430,000 and a fair value of $199,206,000 were transferred to the available-
for-sale category on December 26, 1995, resulting in a net unrealized gain of
$10,904,000 (net of $5,872,000 of deferred taxes). The Company reassessed the
appropriateness of its classification of securities as held-to-maturity upon
reviewing the interpretive guidance provided in the FASB publication A Guide to
Implementation of Statement 115 on Accounting for Certain Investments in Debt
and Equity Securities.

The amortized cost and estimated fair value of debt securities by contractual
maturity and marketable equity securities at December 31, 1995 are shown in the
following table. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
<TABLE>
<CAPTION>

ESTIMATED
AMORTIZED FAIR
COST VALUE
----------------------
(In Thousands)
<S> <C> <C>
Available-for-sale:
Due in one year or less $ 3,989 $ 4,098
Due after one year through five years 94,604 102,648
Due after five years through ten years 231,262 253,977
Due after ten years 184,988 218,173
----------------------
514,843 578,896
Mortgage-backed securities 239,419 251,699
Other asset-backed securities 38,793 41,042
Equity securities 614 764
----------------------
Total available-for-sale $793,669 $872,401
======================
</TABLE>

20
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

Changes in unrealized gains (losses) on investments in available-for-sale
securities for the years ended December 31, 1995 and 1994 are summarized as
follows:

DECEMBER 31, 1995
FIXED EQUITY TOTAL
----------------------------
(In Thousands)
Gross unrealized gains $ 79,308 $181 $ 79,489
Gross unrealized losses 726 31 757
----------------------------
Net unrealized gains 78,582 150 78,732
Deferred income tax expense (27,504) (53) (27,557)
----------------------------
Net unrealized gains after taxes 51,078 97 51,175
Less:
Balance at beginning of year (14,120) 47 (14,073)
----------------------------
Change in net unrealized gains $ 65,198 $ 50 $ 65,248
============================

DECEMBER 31, 1994
FIXED EQUITY TOTAL
----------------------------
(In Thousands)
Gross unrealized gains $ 9,975 $ 88 $ 10,063
Gross unrealized losses 31,698 18 31,716
----------------------------
Net unrealized gains (losses) (21,723) 70 (21,653)
Deferred income tax benefit
(expense) 7,603 (23) 7,580
----------------------------
Net unrealized gains (losses) after
taxes (14,120) 47 (14,073)
Less:
Balance at beginning of year - (23) (23)
Adjustments for change in
accounting method 37,960 - 37,960
----------------------------
Change in net unrealized gains
(losses) $(52,080) $ 70 $(52,010)
============================

21
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

As part of its overall investment management strategy, the Company has entered
into agreements to purchase securities as follows:

DECEMBER 31
1995 1994
-----------------
(In Thousands)

Investment purchase commitments $21,865 $12,340

Major categories of investment income for the years ended December 31 are
summarized as follows:

1995 1994 1993
--------------------------------
(In Thousands)

Fixed maturities $ 74,911 $69,031 $67,570
Equity securities 73 - -
Mortgage loans on real estate 23,851 19,139 15,848
Policy loans 4,775 4,735 4,821
Other investments 1,457 2,986 2,839
--------------------------------
105,067 95,891 91,078
Investment expenses (1,788) (2,089) 1,909
--------------------------------
Net investment income $103,279 $93,802 $89,169
================================

22
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

3. INVESTMENTS (CONTINUED)

Net realized gains (losses) on investments for the years ended December 31 are
summarized as follows:

1995 1994 1993
--------------------------
(In Thousands)

Fixed maturities $2,824 $ 1,248 $ 1,820
Equity securities - (2,577) (1,066)
Real estate and other 56 (16) 5,500
--------------------------
Net realized gain (losses) on investments $2,880 $(1,345) $ 6,254
==========================

During 1995 and 1994, debt and marketable equity securities available-for-sale
were sold with a fair value at the date of sale of $119,317,000 and $85,038,000,
respectively. Gross gains of $3,494,000 and $1,940,000 and gross losses of
$670,000 and $3,269,000 were realized on those sales in 1995 and 1994,
respectively. Proceeds from sales of investments in fixed maturities during
1993 were $27,952,000. Gross gains of $5,085,000 and gross losses of
$3,265,000 were realized on those sales.

4. DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR PURPOSES OTHER THAN TRADING

The Company enters into interest rate contracts to reduce and manage interest
rate risk associated with individual assets and liabilities and its overall
aggregate portfolio.

Interest rate swap agreements generally involve the exchange of fixed and
floating interest payments over the life of the agreement without an exchange of
the underlying principal amount. The differential to be paid or received is
accrued as interest rates change and is recognized as an adjustment to interest
expense or income. The related amount payable to or receivable from
counterparties is included in other liabilities or assets.

23
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

4. DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR PURPOSES OTHER THAN TRADING
(CONTINUED)

The Company manages the potential credit exposure from interest rate contracts
through careful evaluation of the counterparty credit standing and master
netting agreements. The Company is exposed to credit loss in the event of
nonperformance by counterparties on interest rate contracts; however, the
Company does not anticipate nonperformance by any of these counterparties. The
amount of such exposure is generally the unrealized gains in such contracts.

The table below summarizes the Company's interest rate contracts at December 31,
1995 and 1994:

DECEMBER 31, 1995

NOTIONAL AMORTIZED FAIR BALANCE
AMOUNT COST VALUE SHEET
-------------------------------------------------
Interest rate contracts:
Swaps $28,000,000 $ - $ 1,774,425 $ 1,774,425
Swaps-affiliates 25,000,000 - (230,300) (230,300)
-------------------------------------------------
Total swaps $53,000,000 $ - $ 1,544,125 $ 1,544,125
=================================================

DECEMBER 31, 1994

NOTIONAL AMORTIZED FAIR BALANCE
AMOUNT COST VALUE SHEET
-------------------------------------------------
Interest rate contracts:
Swaps $28,000,000 $ - $(1,866,315) $(1,866,315)
Swaps-affiliates 25,000,000 - (2,823,186) (2,823,186)
-------------------------------------------------
Total swaps $53,000,000 $ - $(4,689,501) $(4,689,501)
=================================================

24
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

5. CONCENTRATIONS OF CREDIT RISK

At December 31, 1995, the Company held less-than-investment-grade bonds
classified as available-for-sale with a carrying value of $11,625,000 and a fair
value of $11,826,000. These holdings amounted to 1.4% of the Company's
investment in bonds and less than 1% of total assets. The holdings of less-
than-investment-grade bonds are widely diversified and of satisfactory quality
based on the Company's investment policies and credit standards.

At December 31, 1995, the Company's commercial mortgages involved a
concentration of properties located in Florida (23%), Pennsylvania (12%) and
Georgia (11%). The remaining commercial mortgages relate to properties located
in 22 other states. The portfolio is well diversified, covering many different
types of income-producing properties on which the Company has first mortgage
liens. The maximum mortgage outstanding on any individual property is
$6,900,000.

6. EMPLOYEE BENEFIT PLANS

The Company does not sponsor an employee retirement plan. Home office and field
office services are provided to the Company by employees of Life Insurance
Company of Georgia (Life of Georgia), an affiliated insurer. The Company
reimburses Life of Georgia for the actual cost of salaries and fringe benefits
of employees utilized in providing administrative services to the Company.

The Company does not sponsor a deferred compensation plan, but reimburses Life
of Georgia for the actual cost of fringe benefits for employees providing
administrative services to the Company. The Company has an unfunded
noncontributory, nonqualified deferred compensation plan covering certain agents
in the General Agency Sales Division.

7. REINSURANCE

The Company is involved in both ceded and assumed reinsurance with other
companies for the purpose of diversifying risk and limiting exposure on larger
risks. Substantially all of the guaranteed investment contracts and the
associated prepaid reinsurance premiums are ceded under a reinsurance agreement
with an affiliate. As of

25
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

7. REINSURANCE (CONTINUED)

December 31, 1995, the Company's retention limit for acceptance of risk on life
insurance policies had been set at various levels up to $250,000. Reinsurance
premiums, commissions, expense reimbursements, and reserves related to reinsured
business are accounted for on bases consistent with those used in accounting for
the original policies issued and the terms of the reinsurance contacts.

To the extent that the assuming companies become unable to meet their
obligations under these treaties, the Company remains contingently liable to its
policyholders for the portion reinsured. Consequently, allowances are
established for amounts deemed uncollectible. To minimize its exposure to
significant losses from reinsurer insolvencies, the Company evaluates the
financial condition of its reinsurers and monitors concentrations of credit risk
arising from similar geographic regions, activities, or economic characteristics
of the reinsurer.

The carrying values of amounts recoverable from reinsurers approximate their
fair value.

26
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

7. REINSURANCE (CONTINUED)

Additional information regarding the Company's reinsurance activity for the
years ended December 31, 1995, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>

PERCENTAGE OF
CEDED TO ASSUMED AMOUNT
GROSS OTHER FROM OTHER NET ASSUMED TO
AMOUNT COMPANIES COMPANIES AMOUNT NET
--------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
1995
Life insurance in
force $18,048,076 $4,138,717 $ 809 $13,910,168 0.01%
==========================================================================
Premiums:
Life insurance $ 39,182 $ 8,073 $ 201 $ 31,310 0.64%
Health insurance 60,318 37,346 - 22,972 0.00%
--------------------------------------------------------------------------
Total premiums $ 99,500 $ 45,419 $ 201 $ 54,282 0.37%
==========================================================================
1994
Life insurance in
force $15,284,670 $3,396,943 $2,307 $11,890,034 0.02%
==========================================================================
Premiums:
Life insurance $ 36,116 $ 7,356 $1,740 $ 30,500 5.70%
Health insurance 18,495 10,145 - 8,350 0.00%
--------------------------------------------------------------------------
Total premiums $ 54,611 $ 17,501 $1,740 $ 38,850 4.48%
==========================================================================
1993
Life insurance in
force $13,952,869 $2,405,218 $1,078 $11,548,729 0.01%
==========================================================================
Premiums:
Life insurance $ 38,343 $ 7,660 $1,519 $ 32,202 4.72%
Health insurance 10,002 3,009 - 6,993 0.00%
--------------------------------------------------------------------------
Total premiums $ 48,345 $ 10,669 $1,519 $ 39,195 3.87%
==========================================================================

</TABLE>

8. INCOME TAXES

The Company, which was acquired by America Life in 1989, filed a separate
federal income tax return for years prior to 1995 due to consolidated return
eligibility regulations.

The Company will file a consolidated federal income tax return in 1995 with
Internationale Nederlanden U.S. Insurance Holdings (the direct parent of America
Life) and other U.S. affiliates and subsidiaries, with the exception of First
ING Life Insurance Company of New York. The affiliated companies that join in
the filing of the consolidated federal return have entered into a tax sharing
agreement which provides for an allocation of taxes among life and nonlife
members. Under the agreement, a life member may not receive the full benefit of
a taxable loss in the year the loss is incurred. The agreement provides that a
loss member will receive at least 50% of the loss utilized by other members and
that any remaining benefit will be fully repaid when the loss member could have
used the loss had they filed a separate federal income tax return. The deferred
payments or receipts for the use of losses are accounted for as a component of
the Company's deferred tax liability.

The current tax liability of $5,816,000 is payable to the parent company,
America Life, under the terms of the tax sharing agreement.

27
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

8. INCOME TAXES (CONTINUED)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities are as follows:

DECEMBER 31
1995 1994
-----------------
(In Thousands)
Deferred income tax liability:
Deferred policy acquisition costs $34,700 $33,400
PVFP 7,500 5,60 0
Deferred investment gains 2,300 -
Unrealized investment gains and losses 24,800 -
Reserves - 3,400
Bond/mortgage loans market discount 700 900
Other reserves 2,100 2,300
-----------------
Total deferred income tax liability 72,100 45,600

Deferred income tax asset:
Unrealized investment gains and losses - 8,200
Reinsurance liability - 5,3 00
Benefit reserves 14,100 -
Other assets 2,764 1,900
Other liabilities - 1,070
-----------------
Total deferred income tax asset 16,864 16,470
Valuation allowance for deferred tax asset - -
-----------------
Deferred income tax asset after allowance 16,864 16,470
-----------------
Net deferred income tax liability $55,236 $29,130
=================

28
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

8. INCOME TAXES (CONTINUED)

A reconciliation of the income tax attributable to continuing operations
computed at U.S. federal statutory tax rates to the income tax expense included
in the accompanying statements of income follows:
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31
1995 1994 1993
--------------------------
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
Tax-preferred investment income - (.1) (.1)
Goodwill .7 1.0 .9
Change in deferred liability due to tax settlement - - (7.2)
Other items, net - (1.3) (4.4)
--------------------------
Effective tax rate 35.7% 34.6% 24.2%
==========================

The components of federal income tax expense consist of the following:

YEAR ENDED DECEMBER 31
1995 1994 1993
----------------------------
<S> <C> <C> <C>
Current $22,913 $13,768 $11,649
Deferred 915 4,954 902
----------------------------
Federal income tax expense $23,828 $18,722 $12,551
============================

</TABLE>

The Company made net income tax payments of $16,254,000 during 1995, $22,585,000
during 1994, and $10,604,000 during 1993 for current income taxes and
settlements of prior year returns.

9. STATUTORY ACCOUNTING INFORMATION AND PRACTICES

Statutory capital and surplus was $78,992,000 and $159,223,000 at December 31,
1995 and 1994, respectively. Statutory net income was $42,182,000, $36,539,000,
and $36,871,000 for the years ended December 31, 1995, 1994, and 1993,
respectively.

29
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

9. STATUTORY ACCOUNTING INFORMATION AND PRACTICES (CONTINUED)

The Company exceeded its minimum statutory capital and surplus requirements at
December 31, 1995. Additionally, the amount of dividends which can be paid by
the Company to its stockholder without prior approval of the state insurance
department is generally limited to the greater of 10% of statutory surplus or
the statutory net gain from operations.

The Company, which is domiciled in Texas, prepares its statutory-basis financial
statements in accordance with accounting principles and practices prescribed or
permitted by the state of Texas. "Prescribed" statutory accounting practices
include state laws, regulations and general administrative rules, as well as a
variety of publications of the National Association of Insurance Commissioners
(NAIC). "Permitted" statutory accounting practices encompass all accounting
practices that are not prescribed; such practices may differ from state to
state, from company to company within the state, and may change in the future.
The NAIC is currently in the process of codifying statutory accounting
practices, the result of which is expected to constitute the only source of
"prescribed" statutory accounting practices. Accordingly, that project, which
is expected to be completed in 1997, will likely change, to some extent,
prescribed statutory accounting practices, and may result in changes to the
accounting practices that insurance companies use to prepare their statutory
financial statements. The Company does not currently apply permitted statutory
practices which differ from prescribed accounting practices.

During 1992 and 1993, the NAIC approved certain Risk-Based Capital (RBC)
requirements for life/health insurance companies. Those requirements were
effective in 1993 and require that the amount of capital maintained by an
insurance company is to be determined based on the various risk factors related
to it. At December 31, 1995, the Company met RBC requirements.

At December 31, 1995 and 1994, bonds with an amortized cost of $8,376,000 and
$7,634,000 , respectively, were on deposit with various state insurance
departments to meet regulatory requirements.

30
<PAGE>

Southland Life Insurance Company

Notes to Financial Statements (continued)

10. COMMITMENTS AND CONTINGENT LIABILITIES

The increase in the number of insurance companies that are under regulatory
supervision has resulted, and is expected to continue to result, in increased
assessments by state guaranty funds to cover losses to policyholders of
insolvent or rehabilitated insurance companies. Those mandatory assessments may
be partially recovered through a reduction in future premium taxes in certain
states. The Company has accrued for estimated future assessments net of future
premium tax deductions.

11. SERVICE AGREEMENT WITH AFFILIATE

The Company has a service agreement with Life of Georgia whereby this affiliate
provides personnel, certain services and facilities for the conduct of the
Company's operations in return for payment representing the costs incurred in
providing such services and facilities. Substantially all insurance operating
expenses and employment taxes are incurred under the terms of this service
agreement. During 1995, 1994, and 1993, the Company reimbursed Life of Georgia
$24,573,000, $28,000,000, and $27,843,000, respectively, under this agreement.
The Company has a payable to Life of Georgia of $5,894,000 and $6,200,000 at
December 31, 1995 and 1994, respectively, related to this agreement. This
payable is included within indebtedness to related parties in the accompanying
balance sheets.

12. FINANCING ARRANGEMENTS

The Company has a revolving line of credit totaling $40,000,000 which matures 30
days from the date of advancement. This line of credit expires February 29,
1996. Interest rates on these borrowings are tied to the Federal Funds rate
plus .25%. Outstanding borrowings under this agreement were $0 at December 31,
1995 and 1994.

31
<PAGE>

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

RULE 484 UNDERTAKING

Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

Texas Business Corporations Act Article 2.02-1 is a comprehensive provision
that defines the power of Texas corporations to provide for the indemnification
of its directors, officers, employees and agents. This Article also grants to
corporations the power to purchase director and officer insurance.

Article XXVIII of the Southland Life Insurance Company Bylaws provides as
follows:

ARTICLE XXVIII

INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS

SECTION 1. Authorization for indemnification of Directors and officers in
actions by or in the right of a company to procure a judgment in its favor.

(a) Any person made party to an action by or in the right of the Company
to procure a judgment in its favor by reason of the fact that he, his testator
or intestate, is or was a Director or officer of the Company, shall be
indemnified against the reasonable expenses, including attorneys' fees, actually
and necessarily incurred by him in connection with the defense

1
<PAGE>

of such action, or in connection with an appeal therein, except in relation to
matters as to which such Director or officer is adjudged to have breached his
duty to the Company.

(b) The indemnification authorized under paragraph (a) shall in no case
include:

(1) Amounts paid in settling or otherwise disposing of a threatened
or a pending action with or without court approval; or

(2) Expenses incurred in defending a threatened action or a pending
action which is settled or otherwise disposed of without court approval.

SECTION 2. Authorization for indemnification of Directors and officers in
actions or proceedings other than by or in the right of a company to procure a
judgment in its favor.

(a) Any person made, or threatened to be made, a party in an action or
proceeding other than one by or in the right of the company to procure a
judgment in its favor, whether civil, criminal or administrative, including an
action by or in the right of any other company of any type or kind, domestic or
foreign, which any Director or officer of the Company, served in any capacity at
the request of the Company, by reason of the fact that he, his testator or
intestate, was a Director or officer of the Company, or served such other
company in any capacity, shall be indemnified against judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys' fees actually
and necessarily incurred as a result of such action or proceeding, or any appeal
therein, if such Director or officer acted, in good faith, for a purpose which
he reasonably believed to be in the best interests of the Company and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful.

(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such Director or
officer did not act in good faith for a purpose which he reasonably believed to
be in the best interests of the Company or that he had reasonable cause to
believe that this conduct was unlawful.

SECTION 3. Payment of indemnification other than by court award.

(a) A person who has been wholly successful, on the merits or otherwise,
in the defense of a civil, criminal, or administrative action or proceeding of
the character described in Section 1 or Section 2 above shall be entitled to
indemnification as authorized in such Section 1 or Section 2.

(b) Except as provided in Paragraph (a) of this Section 3, any
indemnification under Section 1 or Section 2 above, unless ordered by a court,
shall be made by the Company only if authorized in the specific case:

2
<PAGE>

(1) By the Board of Directors acting by a quorum consisting of
Directors who are not parties to such action or proceeding upon a finding that
the Director or officer has met the standard of conduct set forth in Section 1
or Section 2, as the case may be; or

(2) If a quorum of the Board of Directors is not obtainable with due
diligence:

(A) By the Board of Directors upon the opinion in writing of
independent legal counsel that indemnification is proper in the circumstances
because the applicable standard of conduct set forth in Section 1 or Section 2
above has been met by such Director or officer, or

(B) By the stockholder (excluding the director or officer)
upon a finding that the Director or officer has met the applicable standard of
conduct set forth in Section 1 or Section 2 above.

(c) Reasonable expenses incurred in defending a civil, criminal or
administrative action or proceeding may be paid by the Company in advance of the
final disposition of such action or proceeding if authorized under paragraph (b)
of this Section 3 and if the Director or officer submits a written affirmation
that he meets the standards necessary for indemnification and if the facts known
to those making the determination would not preclude indemnification, but
subject to a written undertaking of repayment if ultimately found not to be
entitled to indemnification under the provisions hereof.

SECTION 4. General

The foregoing provisions of this Article XXVIII shall be deemed to be a
contract between the Company and each Director and officer who serves in such
capacity at any time while this bylaw is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or therefore existing or any action,
suit or proceeding theretofore or thereafter brought based in whole or in part
upon any such state of facts.

The foregoing rights of indemnification shall not be deemed exclusive of
any other rights to which any Director or officer may be entitled apart from the
provisions of this Article XXVIII.

The Board of Directors in its discretion shall have the power on behalf of
the Company to indemnify any person, other than a Director or officer, made a
party to any action, suit or proceeding by reason of the fact that he, his
testator or intestate, is or was an employee of the company. Such
indemnification shall be to the same extent and subject to the same standards as
indemnification for a director or officer.

3
<PAGE>

SECTION 5. Liability Insurance

The company and/or the Board of Directors may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the company or who is or was serving at the request of the company
as a director, officer, partner, venturer, proprietor, trustee, employee, agent,
or similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, other enterprise or employee benefit
plan, against any and all liability asserted against him and/or incurred by him
in such capacity or arising out of his status as such a person, whether or not
such person would be subject to or eligible for indemnification under the other
provisions of this Article XXVIII.

REPRESENTATIONS PURSUANT TO RULE 6e-3(T)

This filing is made pursuant to Rule 6e-3(T) under the Investment Company
Act of 1940.

Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940 with respect to the policies described in the
Prospectus.

Registrant makes the following representations:

(1) Rule 6e-3(T)(b)(13)(iii)(F) has been relied upon.

(2) The level of the mortality and expense risk charge is within the range
of industry practice for comparable flexible or scheduled contracts.

(3) Registrant has concluded that there is a reasonable likelihood that the
distribution financing arrangement of the Variable Account will benefit
the Variable Account and Policy owners and will keep and make available
to the Commission on request a memorandum setting forth the basis for
this representation.

(4) The Variable Account will invest only in management investment
companies which have undertaken to have a board of directors, a
majority of whom are not interested persons of the company, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.

The methodology used to support the representation made in paragraph (2)
above is based on an analysis of the mortality and expense risk charge contained
in other variable life insurance contracts. Registrant undertakes to keep and
make available to the Commission on request the documents used to support the
representation in paragraph (2) above.

4
<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet.
The prospectus consisting of 105 pages.
Undertaking to file reports.
Rule 484 undertaking.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following persons: Francis J. Mulcahy, Esquire;
Pamela Crane, Senior Vice President - Finance/Actuarial, Southland
Life Insurance Company; Ernst & Young LLP; and Sutherland, Asbill &
Brennan.

The following exhibits, corresponding to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:

1.
A.
(1) Resolution of the Board of Directors of Southland Life Insurance
Company establishing Southland Separate Account L1 *
(2) Not Applicable
(3) (a) Form of Underwriting Agreement between Southland Life Insurance
Company and ING America Equities, Inc. **
(b) Form of Distribution Agreement ***
(c) Schedule of Sales Commissions
(4) Not applicable
(5) (a) Specimen Flexible Premium Adjustable Combination Fixed and
Variable Life Insurance Policy
(b) Adjustable Term Insurance Rider
(c) Accidental Death Benefit Rider
(d) Additional Insured Rider
(e) Children's Insurance Rider
(f) Exchange of Insured Rider
(g) Guaranteed Insurability Rider
(h) Waiver of the Cost of Insurance Rider
(i) Waiver of Specified Premium Rider
(6) (a) Amended and restated Articles of Incorporation of Southland Life
Insurance Company ***
(b) By-laws of Southland Life Insurance Company **
(7) Not applicable
(8) (a) Form of participation/distribution agreement between The Alger
American Fund and the Company ***

5
<PAGE>

(b) Form of participation/distribution agreement between Fidelity
Variable Insurance Products Fund and the Company ***
(c) Form of participation/distribution agreement between Fidelity
Variable Insurance Products Fund II and the Company ***
(d) Form of participation/distribution agreement between INVESCO
Variable Investment Funds, Inc. and the Company ***
(e) Form of participation/distribution agreement between Janus Aspen
Series and the Company ***
(9) Not applicable
(10) Application form
(11) Description of issuance, transfer and redemption procedures

B. Not applicable

C. Not applicable

2. Opinion and Consent of Francis J. Mulcahy, Esquire

3. Not applicable

4. Not applicable

5. Not applicable

6. Opinion and Consent of Pamela M. Crane, Senior Vice President -
Finance/Actuarial of Southland Life Insurance Company, as to actuarial
matters pertaining to the securities being registered

7. (a) Consent of Ernst & Young LLP
(b) Consent of Sutherland, Asbill & Brennan

- -----------------------------
* Incorporated by reference to the Registration Statement on Form S-6 for
Southland Separate Account L1 (File No. 33-97852) filed with the Commission
on October 6, 1995.
** Incorporated by reference to the Registration Statement on Form N-4 for
Southland Separate Account A1 (File No. 33-89574) filed with the Commission
on February 17, 1995.
*** Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-4 for Southland Separate Account A1 (File
No. 33-89574) filed with the Commission on September 29, 1995.

6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant, Southland Separate Account L1, has duly
caused this Pre-effective Amendment No. 2 to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be thereunto affixed and
attested, all in the County of Fulton, State of Georgia, this 8th day of May,
1996.

Southland Separate Account L1
[SEAL APPEARS HERE] Southland Life Insurance Company
(Depositor)

Attest: /s/ Francis J. Mulcahy By: /s/ James D. Thompson
----------------------------- ----------------------------------
Francis J. Mulcahy, Vice President, James D. Thompson, President &
Secretary & General Counsel Chief Operating Officer

Pursuant to the requirements of the Securities Act of 1933, Southland Life
Insurance Company has duly caused this Pre-effective Amendment No. 2 to be
signed on its behalf by the undersigned persons in their capacities with
Southland Life Insurance Company thereunto authorized, and its seal to be
thereunto affixed and attested, all in the County of Fulton, State of Georgia,
this 8th day of May, 1996.

[SEAL APPEARS HERE] Southland Life Insurance Company

Attest: /s/ Francis J. Muicahy By: /s/ James D. Thompson
----------------------------- ----------------------------------
Francis J. Mulcahy, Vice President, James D. Thompson, President &
Secretary & General Counsel Chief Operating Officer

Pursuant to the requirements of the Securities Act of 1933, this Pre-effective
Amendment No. 2 has been signed below by the following persons in the capacities
indicated on the date(s) set forth below.

Principal Officers

Signature Title Date
- --------- ----- ----

/s/ James D. Thompson President & May 8, 1996
- ---------------------------- Chief Operating
James D. Thompson Officer

/s/ Robert J. St. Jacques Chief Executive Officer May 8, 1996
- ----------------------------
Robert J. St. Jacques

/s/ Francis J. Mulcahy Vice President, May 8, 1996
- ---------------------------- Secretary
Francis J. Mulcahy & General Counsel

7
<PAGE>

Board of Directors

Signature Title Date
- --------- ----- ----

/s/ R. Glenn Hilliard Chairman of the Board May 8, 1996
- -----------------------------
R. Glenn Hilliard

/s/ Robert J. St. Jacques Vice Chairman May 8, 1996
- -----------------------------
Robert J. St. Jacques

/s/ Michael W. Cunningham Director May 8, 1996
- -----------------------------
Michael W. Cunningham

/s/ Linda B. Emory Director May 8, 1996
- -----------------------------
Linda B. Emory

/s/ James D. Thompson Director May 8, 1996
- -----------------------------
James D. Thompson

/s/ P. Randall Lowery Director May 8, 1996
- -----------------------------
P. Randall Lowery

/s/ Francis J. Mulcahy Director May 8, 1996
- -----------------------------
Francis J. Mulcahy

8
<PAGE>

Exhibit Index

1.A.(3)(c) Schedule of Sales Commissions
1.A.(5)(a) Specimen Flexible Premium Adjustable Combination Fixed and
Variable Life Insurance Policy
1.A.(5)(b) Adjustable Term Insurance Rider
1.A.(5)(c) Accidental Death Benefit Rider
1.A.(5)(d) Additional Insured Rider
1.A.(5)(e) Children's Insurance Rider
1.A.(5)(f) Exchange of Insured Rider
1.A.(5)(g) Guaranteed Insurability Rider
1.A.(5)(h) Waiver of the Cost of Insurance Rider
1.A.(5)(i) Waiver of Specified Premium Benefit Rider
1.A.(10) Application form
1.A.(11) Description of issuance, transfer and redemption procedures
2. Opinion and Consent of Francis J. Mulcahy, Esquire
6. Opinion and Consent of Pamela M. Crane, Senior Vice President -
Finance/Actuarial of Southland Life Insurance Company, as to
actuarial matters pertaining to the securities being registered
7.(a) Consent of Ernst & Young
7.(b) Consent of Sutherland, Asbill & Brennan

<PAGE>
Exhibit 1.A.(3)(c)

Southland Life

General Agent's Commission Schedule
Commission Percentages
<TABLE>
<CAPTION>

- -------------------------------------------------------------------------------
Plan First Year Renewal

- --------------------------------------------------------------------------------
2-5 6-10
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Future Dimensions Variable Universal Life
Total Target Premium or Less/(1)/ 85.0 3.0 3.0
Excess Over Total Target Premium 3.0 3.0 3.0
- --------------------------------------------------------------------------------
</TABLE>

Effective May 1, 1996

/(1)/ The "Total Target Premium" is defined to mean the Annual Target Premium
Per Thousand as shown on the rate card times the number of thousands of
Specified Amount, plus the total of all first-year term charges for (a)
any supplemental benefits and (b) any substandard extras applicable for
ten years or more. No first-year commissions will be paid for any
substandard extras applicable for less than 10 years.

The commission on any form of policy not herein specified shall be
determined by the Company. The commission rates shown on this schedule
may be changed upon written notice.

<PAGE>

Exhibit 1A(5)(a)

SOUTHLAND LIFE INSURANCE COMPANY
(A TEXAS CORPORATION)
5780 POWERS FERRY ROAD, N. W., ATLANTA, GEORGIA 30327-4390
MAILING ADDRESS
P. O. BOX 105006, ATLANTA, GEORGIA 30348-5006
A STOCK COMPANY - ESTABLISHED 1908

[JOHN Q. DOE]

[12-3456789-0] [$100,000]

Agreement by Southland Life Insurance Company

Southland Life Insurance Company will pay the benefits described in this Policy
in accordance with the terms of this Policy.

Consideration for Issuing This Policy

This Policy is issued in consideration of:
1. the application; and
2. payment of the first premium.

Please Read Your Policy Carefully

This Policy is a legal contract between the Policyowner and the Company.

Free Look Period

You have the right to examine and return this Policy. This Policy may be
returned to the agent or the Company within 20 days of receipt, 45 days after
you sign the application or 10 days after we mail the Notice of Withdrawal
Right, whichever is latest. The Policy will be deemed to be received by you 15
days after it is mailed from our Customer Service Center. The Policy may be
returned by mail or other delivery to our Customer Service Center or to our
authorized agent who sold it. It will then be void from the beginning. Upon
return of the Policy, we will refund all Premiums paid.

This Policy is signed for Southland Life Insurance Company by

James D. Thompson Francis J. Mulcahy
President Secretary

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

Death benefits and other values provided by this Policy, when based on the
investment experience of a separate account, are variable. These values may
increase or decrease based on investment experience and are not guaranteed as to
a fixed dollar amount. Death benefits are payable by us to the Beneficiary upon
the death of the Insured prior to maturity. The Net Accumulation Value, if any,
is payable by us if the Insured is living upon maturity. Flexible premiums are
payable by the Owner during the lifetime of the Insured until maturity.

Customer Service Center
P.O. Box 173789
Denver, CO 80217-3789
(800) 224-3035

1
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
POLICY SCHEDULE................................. 3

DEFINITIONS..................................... 7

OWNERSHIP AND BENEFICIARY PROVISIONS............ 10

PAYMENT OF PREMIUMS............................. 10

DEATH BENEFITS.................................. 12

POLICY CHANGES.................................. 14

VARIABLE ACCOUNT................................ 15

GUARANTEED INTEREST ACCOUNT..................... 16

ACCUMULATION UNIT VALUE......................... 16

ACCUMULATION EXPERIENCE FACTOR.................. 16

SUBACCOUNT ACCUMULATION VALUE................... 17

GUARANTEED INTEREST ACCOUNT ACCUMULATION VALUE.. 17

TRANSFERS....................................... 18

POLICY SURRENDER AND WITHDRAWALS................ 20

POLICY LOANS.................................... 21

POLICY CHARGES.................................. 22

REPORTS......................................... 26

GENERAL POLICY PROVISIONS....................... 27

CONVERSION OF POLICY............................ 28

HOW BENEFITS ARE PAID........................... 29
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
POLICY SCHEDULE
<S> <C>

POLICY NUMBER [ ]
--------------------

INSURED PERSON [JOHN Q. DOE]

ISSUE AGE [35]

INSURED PERSON'S SEX [MALE]

RATING CLASS [STANDARD SMOKER]

RATING FACTOR [1.00]

STATED DEATH BENEFIT [$100,000]

MINIMUM STATED DEATH BENEFIT [$50,000]

ADDITIONAL TERM INSURANCE AMOUNT

TOTAL DEATH BENEFIT AT ISSUE [$100,000]

POLICY DATE [JUNE 1, 1995]

MONTHLY PROCESSING DATE 1ST

DEATH BENEFIT TYPE [A]

BENEFICIARY NAME [MARY J. DOE]

BENEFICIARY RELATIONSHIP [SPOUSE]

FIRST PREMIUM [ ]
------

PLANNED PERIODIC PREMIUM [ ]
---------

MODE AT ISSUE ANNUAL

MINIMUM MONTHLY PREMIUM [ ]
---------

OWNER [JOHN Q. DOE]
</TABLE>

3
<PAGE>

ALLOCATION OF INITIAL PREMIUM
<TABLE>
<CAPTION>

<S> <C>
[Alger American Small Capitalization Subaccount] 0.00%

[Alger American MidCap Growth Subaccount] 0.00%

[Alger American Leveraged AllCap Subaccount] 0.00%

[Alger American Growth Subaccount] 0.00%

[Fidelity VIP II Asset Manager Subaccount] 0.00%

[Fidelity VIP Growth Subaccount] 0.00%

[Fidelity VIP Overseas Subaccount] 0.00%

[Fidelity VIP Money Market Subaccount] 0.00%

[Fidelity VIP II Index 500 Subaccount] 0.00%

[Fidelity VIP Equity-Income Subaccount] 0.00%

[Fidelity VIP High Income Subaccount] 0.00%

[Fidelity VIP II Contrafund Subaccount] 0.00%

[Fidelity VIP II Investment Grade Bond Subaccount] 0.00%

[Janus Growth Subaccount] 0.00%

[Janus Aggressive Growth Subaccount] 0.00%

[Janus Worldwide Growth Subaccount] 0.00%

Janus International Growth Subaccount] 0.00%

Janus Balanced Subaccount] 0.00%

Janus Short-Term Bond Subaccount] 0.00%

[INVESCO Industrial Income Subaccount] 0.00%

[INVESCO Utilities Subaccount] 0.00%

Guaranteed Interest Account 0.00%

</TABLE>

If you elect to invest in a particular investment option, at least 5% of your
Premiums must be allocated to that option. All percentage allocations must be
in whole numbers.

4
<PAGE>

POLICY SCHEDULE

Planned Premium at Issue on Other Available Modes
<TABLE>
<CAPTION>
<S> <C>
Annual Quarterly

Semi-Annual Special Monthly

Monthly Administrative Charge of:

Percent of Premium Expense Charge:

Per Thousand Expense Charge:
</TABLE>
<TABLE>
<CAPTION>

Table of Surrender Charges at Issue
<S> <C> <C> <C>
Policy Amount Policy Amount
Year of Charge Year of Charge
1 9
2 10
3 11
4 12
5 13
6 14
7 15
8

</TABLE>
<TABLE>
<CAPTION>

Table of Factors for Surrender Charges for Stated Death Benefit Changes
<S> <C> <C> <C>
Policy Surrender Policy Surrender
Year Factor Year Factor
1 9
2 10
3 11
4 12
5 13
6 14
7 15
8
</TABLE>
A Stated Death Benefit decrease may result in a charge to the Accumulation
Value. See the "Decrease in Stated Death Benefit" and Surrender Charge
provisions of this Policy.

5
<PAGE>

<TABLE>
<CAPTION>
POLICY SCHEDULE

Summary of Benefits
<S> <C> <C>
Minimum Monthly Years of
Premium Benefit
LIFE INSURANCE

ANY ADDITIONAL BENEFITS OR RIDERS

TOTAL MINIMUM MONTHLY PREMIUM AT ISSUE
</TABLE>

6
<PAGE>

DEFINITIONS

Accumulation Value: The "Accumulation Value" is the combined value of your
Policy in all of the Subaccounts of the Variable Account, Guaranteed Interest
Account and the values held in the General Account to secure policy loans.

Age: The Insured's "Age" at any time is his or her age on the birthday nearest
the Policy Date increased by the number of Policy Years elapsed since the Policy
Date.

Base Death Benefit: The "Base Death Benefit" depends on the death benefit type
you choose. Under Type A, the Base Death Benefit is the greater of Stated Death
Benefit or a multiple of the Accumulation Value on the date of the Insured's
death. Under Type B, the Base Death Benefit is the greater of the Stated Death
Benefit plus the Accumulation Value on the date of the Insured's death, or a
multiple of the Accumulation Value, on the date of the Insured's death.

Beneficiary: The "Beneficiary" is the person to whom the death benefit (payable
on the death of an Insured) is paid.

Cash Surrender Value: The "Cash Surrender Value" of the Policy on any Valuation
Day is the Net Accumulation Value minus any Surrender Charge that would apply
that day.

Code: The "Code" is the Internal Revenue Code of 1986, as amended.

Death Benefit: The "Death Benefit" is the Base Death Benefit plus any additional
life insurance proceeds provided by any riders. If the Adjustable Term Insurance
Rider is in effect, the Death Benefit is equal to the Target Death Benefit plus
any additional life insurance proceeds provided by any other riders.

Death Benefit Proceeds: The "Death Benefit Proceeds" are the proceeds payable to
the Beneficiary by us upon due proof of death of the Insured while the Policy is
in force equal to: [1] the Death Benefit; minus [2] any outstanding Policy Debt;
minus [3] any monthly deductions not yet deducted.

Free Look Period: The "Free Look Period" is the period during which you may
return the Policy and receive a refund of all premiums paid.

General Account: The "General Account" represents our corporate assets other
than those segregated in any separate account established by us.

Gross Withdrawal: A "Gross Withdrawal" is a Withdrawal plus any applicable
Withdrawal Transaction Charge and any applicable Surrender Charge.

7
<PAGE>

Guaranteed Interest Account Accumulation Value: The "Guaranteed Interest Account
Accumulation Value" is the value under the Policy in the Guaranteed Interest
Account.

Insured: The "Insured" means the person upon whose life the Policy is issued.

Monthly Deduction: The "Monthly Deduction" or "Monthly Deduction" is the total
amount of deduction taken from the Accumulation Value on each Monthly Processing
Date and includes the initial Policy charge, the monthly administrative charge,
the cost of insurance charge and any changes for additional benefits provided by
riders.

Monthly Processing Date: The "Monthly Processing Date" is the date each month on
which the monthly deductions from the Accumulation Value are deducted. The first
Monthly Processing Date will be the Policy Date or the date on which the initial
Net Premium is allocated to your Policy, if later. Subsequent Monthly Processing
Dates will be the same date as the Policy Date each month thereafter unless this
is not a Valuation Day, in which case the Monthly Processing Date occurs on the
next Valuation Day.

Net Accumulation Value: The "Net Accumulation Value" on any Valuation Day is the
Accumulation Value on that day less policy loans (and interest thereon) and if
other than the Monthly Processing Date, the monthly deduction that would be
deducted on the next Monthly Processing Date.

Net Premium: The "Net Premium" is the premium amount paid less any sales and tax
charges. These charges are deducted from each premium before the premium is
applied to your Accumulation Value.

No-Lapse Guarantee: The "No-Lapse Guarantee" refers to our guarantee to keep the
Policy in force during the first three Policy Years, regardless of the
sufficiency of the Cash Surrender Value, so long as total premiums paid, less
Withdrawals and Policy Debt, is at least equal to cumulative amount of No-Lapse
Premiums for the Policy months the Policy has been in force.

Owner: The "Owner" is the person(s) who owns the Policy and who is entitled to
exercise all rights and privileges provided in the Policy.

Policy Anniversary: The "Policy Anniversary" is the first day of each Policy
Year.

Policy Date: The "Policy Date" is shown on the Schedule and is the date the
Policy becomes effective.

Policy Debt: The "Policy Debt" is equal to unrepaid policy loans (including
unpaid interest added to the loan) plus accrued interest not yet due.

Policy Loan Account: The "Policy Loan Account" is described in the "Policy
Loans" section of this Policy.

Policy Year: Each "Policy Year" starts on the same day and month as the Policy
Date.

Portfolio: A "Portfolio" refers to a division of an underlying mutual fund in
which assets of a corresponding Subaccount are invested.

SEC: The "SEC" is the Securities and Exchange Commission.

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<PAGE>

Stated Death Benefit: The "Stated Death Benefit" is a dollar amount used to
determine the death benefit under the Policy and is shown in the Policy
Schedule.

Subaccount: A Subaccount is a subdivision of the Variable Account, the assets
of which are invested in a corresponding Portfolio.

Subaccount Accumulation Value: The "Subaccount Accumulation Value" is the value
under a Policy in a particular Subaccount.

Surrender: A "Surrender" is a written request for the Cash Surrender Value
which terminates the Policy.

Target Death Benefit: The "Target Death Benefit" is the death benefit specified
by the Owner when an Adjustable Term Insurance Rider is added to the Policy.

Target Premium: The "Target Premium" refers to a premium amount we use to
calculate the sales charge, the sales surrender charge and the cost of insurance
charge. A Target Premium is determined for the initial Stated Death Benefit on
the Policy Date, and an additional Target Premium is determined for each
increase in Stated Death Benefit. The Target Premium generally is less than
planned premiums for a Policy Year. It may be more or less than the No-Lapse
Premium for a Policy Year, depending on the supplemental benefits added to the
Policy.

Valuation Day: For each Subaccount, a "Valuation Day" is each day on which the
New York Stock Exchange and Southland's Customer Service Center are both open
for business except for a day that a Subaccount's corresponding Portfolio does
not value its shares. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, July Fourth, Labor Day, Thanksgiving Day and Christmas
Day. Southland's Customer Service Center is normally not open on the following
days: the Monday before New Year's Day, July Fourth or Christmas Day, if any of
these holidays falls on a Tuesday; the Friday after New Year's Day, July Fourth
or Christmas Day, if any of these holidays falls on a Thursday; and the Friday
after Thanksgiving.

Valuation Period: A "Valuation Period" begins at 4:00 p.m. Eastern time on a
Valuation Day and ends at 4:00 p.m. Eastern time on the next succeeding
Valuation Day.

We, us, our, Southland and the Company: "We," "us," "our," "Southland" and "the
Company" refer to Southland Life Insurance Company.

Withdrawal: A "Withdrawal" refers to the surrender of a portion of the Net
Accumulation Value.

Written Notice or Written Request: A written notice or written request in a form
satisfactory to the Company which is signed by the Owner and received at the
Customer Service Center.

You and your: "You" and "your" refer to the Owner of this Policy.

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<PAGE>

OWNERSHIP AND BENEFICIARY PROVISIONS

Ownership

The original Owner is the person named as the Owner in the application. You, as
Owner, can exercise all rights and receive the benefits during the Insured's
life before maturity. All rights of the Owner are subject to the rights of any
assignee and any irrevocable Beneficiary.

Beneficiary
The Beneficiary will receive any death benefits of this policy, subject to any
assignment you have made. Unless otherwise provided, the interest of any
Beneficiary who dies before the Insured, will be paid in equal shares to any
surviving Beneficiaries. If no Beneficiary is living at the Insured's death,
payment will be made to the Owner's estate.

The Beneficiary may be changed by Written Request. After we record receipt of
your request, the change will take effect as of the date the request is signed,
but will not affect any action already taken. The rights of the former
Beneficiary will cease at the same time. We may require return of the Policy to
record the change.

If you give up the right to change a Beneficiary, that Beneficiary's written
consent will be needed along with your Written Request to make any change in
this Policy.

Assignment
We will not honor an assignment of this Policy unless it is in writing and filed
with the Company. You must provide the form of assignment. Conditions of the
assignment take priority over any conflicting ownership or beneficiary
provisions. It is up to you to make sure it is valid. All assignments are
subject to Policy Debt(s).

PAYMENT OF PREMIUM

Premiums
Premiums must be paid to the Company. A receipt will be furnished on request.
The first premium is due on the Policy Date. The Policy will not take effect
until it has been delivered and the first premium paid while the Insured is
alive and prior to any change in health as shown in the application.

The planned periodic premium and the mode of payment are shown on the Policy
Schedule. We will send reminder notices to you for the planned periodic premium
that you have selected. You may select to receive notices either annually,
semiannually or quarterly. You may also arrange for payment of premiums on a
monthly basis through an authorized special payment facility. All payment modes
are subject to our minimum requirements for the payment mode selected. Changes
in frequency and increases or decreases in the amount of planned premiums may be
made by you, subject to our current administrative rules and minimum limits on
premiums.

Additional unplanned premiums may be made at any time during the Insured's
lifetime subject to certain limits. The premiums must be at least $100 and must
be sent to our Customer Service Center. We reserve the right to require evidence
of insurability prior to accepting any premium that would increase the
difference between the Accumulation Value and the Death Benefit. We reserve the
right to limit total premiums paid in a Policy Year to the planned premiums
selected. No premium will be accepted after maturity.

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<PAGE>

If you have Policy Debt outstanding, any payment submitted will be treated as a
loan repayment unless you indicate otherwise when submitting the payment. If no
Policy Debt is outstanding, any payment submitted by you is treated as a premium
payment.

Excess Premium
It is possible that total premiums paid may reach a level that could cause an
adverse effect on the tax status of the Policy. Under the Code, there is a limit
on aggregate premiums for the Policy to be considered a "life insurance
contract." Code section 7702 provides for that exclusion. The portion of any
premium received in excess of that limit will be refunded. This provision is
subject to interpretations of and changes in the federal income tax laws and
regulations.

Three-Year Guarantee
We guarantee that a Policy will remain in force during the first three Policy
Years, regardless of the sufficiency of the Cash Surrender Value, if the total
premiums paid less any Withdrawals, Policy Debt, and accrued interest are
greater than the No-Lapse Premium multiplied by the number of months the Policy
has been in force. The No-Lapse Premium for your Policy generally will be less
than the monthly amount of planned premiums you select to pay. The above
referred test of premiums is made on each Monthly Processing Date. As long as
this test is satisfied, the Net Accumulation Value is less than or equal to
zero, the charges will be temporarily waived. Whenever the net Accumulation
Value becomes positive, a portion of all of the charges waived will be deducted
from the Accumulation Value. This process will continue until the end of the
Three-Year Guarantee period. If there is a balance of waived charges at the end
of this period and there is not sufficient Accumulation Value to pay them, the
Policy will enter its grace period. The Three-Year Guarantee will not prevent
the termination of the Policy if the Cash Surrender Value becomes insufficient
because of excessive Policy Debt.

Allocation of Net Premium
During the Free Look Period, the portion of your Net Premium which you elected
to invest in a Subaccount of the Variable Account will be invested in the money
market Subaccount shown on Page 4. The portion of your Net Premium which you
elected to invest in the Guaranteed Interest Account will be allocated to that
Account. After the Free Look Period, the balance of your assets in the money
market Subaccount will be reallocated as directed by the Owner in the
application for this Policy. Subject to and in accordance with the provisions of
this Policy, subsequent Net Premiums will be allocated as directed by the Owner
to the Subaccounts of the Variable Account or the Guaranteed Interest Account.
The Owner may change the allocation of future premiums at any time by sending
Written Notice. Our administrative rules as in effect from time to time may
impose minimum allocation requirements or limit allocations to whole percentages
(e.g., 33%, not 33 1/3).

Continuation of Insurance
If all premiums cease, the insurance provided under this Policy, including
additional benefits provided by any supplemental agreements attached to this
Policy, will continue in accordance with the provisions of this Policy and any
such supplemental agreements for as long as the Cash Surrender Value of this
Policy is sufficient to keep it in force.

Grace Period
A grace period of sixty-one (61) days is allowed to pay each premium after the
first premium. If the Cash Surrender Value on a Monthly Processing Date will not
cover the monthly deduction due, a sufficient premium must be paid in the grace
period to cover past due changes plus amount sufficient to keep the policy in
force for two (2) months following receipt.

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<PAGE>

Notice of the amount of premium required to be paid to keep the Policy from
lapsing will be mailed to you and to any assignee at the last known address.
The grace period will begin on the date the notice is mailed. If the premium is
not paid, the Policy will terminate without value at the end of the grace
period.

Reinstatement
If coverage ends because a sufficient premium is not paid in a grace period,
this Policy may be reinstated within five (5) years after the lapse. We would
require:

1. satisfactory proof that the Insured is insurable;
2. payment of premiums sufficient to keep the Policy (and applicable
riders) in force from the date of lapse to the date of the expired
grace period and for two months following the date of reinstatement;
plus
3. repayment or the continuance of any Policy Debt which existed when
coverage ended.

At reinstatement, the Accumulation Value will be:

1. the Accumulation Value at the date of lapse; plus
2. your payments on reinstatement; less
3. the difference in surrender charges as of the lapse date and as of
the reinstatement date based on the table of surrender charges.

The reinstatement will be effective on the date of our approval.

If the Policy has been surrendered, we will not reinstate this Policy.

DEATH BENEFITS

Proceeds Payable at Death Prior to Age 100
We will pay the Death Benefit Proceeds of this Policy to the Beneficiary on
receipt of proof that the Insured died while this Policy was in force. These
proceeds will equal:

1. the Base Death Benefit; plus
2. amounts payable from any additional benefits provided by any rider;
minus
3. any monthly deductions due in the grace period, if applicable; minus
4. any Policy Debt.

Payment of Death Proceeds is subject to the "Age and Sex Misstatement," "Policy
Incontestability" and "Suicide" provisions of this Policy.

Payment will be in a lump sum unless you request an alternate form of payment by
Written Request (See "How Benefits Are Paid"). Interest will be paid on this
lump sum from the date we determine the Death Benefit Proceeds to the date of
payment, or until another payment option is selected. Interest will be at the
rate we declare, or at any higher rate required by law.

Death Benefit
If death benefit type A is shown on the Policy Schedule, the Base Death Benefit
equals the larger of:

1. the Stated Death Benefit; or
2. a multiple of the Accumulation Value on the date of death.

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<PAGE>

If death benefit type B is shown on the Policy Schedule, the Base Death Benefit
equals the larger of:

1. the Stated Death Benefit plus the Accumulation Value on the date of
death; or
2. a multiple of the Accumulation Value on the date of death.

In both cases, the multiple in (2) depends on the Insured's Age at death. The
table of multiples in effect as of the Policy Date is shown below. If the table
becomes inconsistent with any federal income tax laws and regulations, we
reserve the right to change it.
<TABLE>
<CAPTION>

- --------------------------------------------------------------------------------
Death Benefit Multiples
- --------------------------------------------------------------------------------
Multiple of Multiple of Multiple of
Attained Accumulation Attained Accumulation Attained Accumulation
Age Value Age Value Age Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 - 40 2.50 54 1.57 68 1.17
41 2.43 55 1.50 69 1.16
42 2.36 56 1.46 70 1.15
43 2.29 57 1.42 71 1.13
44 2.22 58 1.38 72 1.11
45 2.15 59 1.34 73 1.09
46 2.09 60 1.30 74 1.07
47 2.03 61 1.28 75 - 90 1.05
48 1.97 62 1.26 91 1.04
49 1.91 63 1.24 92 1.03
50 1.85 64 1.22 93 1.02
51 1.78 65 1.20 94 1.01
52 1.71 66 1.19 95 - 100 1.00
53 1.64 67 1.18
- ---------------------------------------------------------------------------
</TABLE>

Maturity At Age 100
If the Insured is living at attained age 100 and this Policy is in force, we
will pay you the Policy's Net Accumulation Value and the Policy will terminate.

It is possible that the coverage will terminate prior to age 100 if premiums are
not paid regularly or are insufficient to cover monthly deductions. Coverage
may be affected also by changes in interest rates and monthly deductions.

Optional Continuance Beyond Age 100
You may make a Written Request that we defer payment of proceeds and continue
the Policy in force. We must receive your Written Request at least one year
before maturity.

During continuance, the death benefit at any time will be the Net Accumulation
Value. The Accumulation Value will be increased with interest from date of
death to payment in the same manner as prior to maturity. No further monthly
deductions will apply. No more premiums may be paid after continuance.

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<PAGE>

POLICY CHANGES

Right to Make Change
At any time this Policy is in force after the first Policy Year, the Owner may
make any of the following changes by Written Request. An increase or decrease
in Stated Death Benefit can be requested only during the thirty day period
preceding a Policy Anniversary. A change in Death Benefit type can only be made
on a Policy Anniversary. No change will be permitted that would result in the
failure of this Policy to be a "life insurance contract" by virtue of not
satisfying the requirements of section 7702 of the Code or as set forth in any
applicable successor provision thereto. In addition, each change is subject to
the conditions stated.

Increase in Stated Death Benefit
Any increase in the Stated Death Benefit must be at least $10,000 and must be
applied for on a written application. Evidence of insurability satisfactory to
the Company must be submitted. An increase will become effective as of the
Policy Anniversary after we have approved your application for increase. You
will receive a new Schedule to show the effective date of the increase. If the
increase becomes effective during the first three Policy Years, the Three-Year
Guarantee will be extended for three years from the effective date of the
increase. A Target Premium will be established for the increase, and the portion
of premiums paid thereafter allocated to the increase will be subject to a 4%
sales charge until an amount equal to 10 Target Premiums for the increase has
been paid.

Decrease in Stated Death Benefit
A decrease in the Stated Death Benefit may only be made after the second Policy
Year. Any decrease in the Stated Death Benefit must be at least $10,000 or
less. The Stated Death Benefit may not be decreased to less than $50,000. No
decrease may be made until at lease two years following the effective date of an
increase in the Stated Death Benefit.

Any decrease in the Stated Death Benefit will become effective as of the Policy
Anniversary on or following the receipt by the Company of the Written Request.
If increases in the initial Stated Death Benefit are in effect, a decrease in
the Stated Death Benefit will be allocated to each segment of the Stated Death
Benefit in the same proportion as the Target Premium for each segment bears to
the total Target Premiums for the Policy.

If a decrease in Stated Death Benefit occurs during the first 14 Policy Years,
or during the first 14 years following an increase in Stated Death Benefit, a
Surrender Charge may apply.

Change of Death Benefit Type
If type A is in effect, you can request that it be changed to type B. This will
decrease the Stated Death Benefit by the amount of Accumulation Value. The new
Stated Death Benefit cannot be less than the minimum Stated Death Benefit shown
on the Policy Schedule.

If type B is in effect, you can request that it be changed to type A. This will
increase the Stated Death Benefit by the amount of the Accumulation Value.

The effective date of the change will be the Monthly Processing Date that
coincides with or follows the Valuation Day after we approve the Written Request
for the changes.

Change of Benefits Option
You may add or drop any additional benefits by sending us a Written Request.

14
<PAGE>

Proof of insurability may be required by us to add a benefit. We may require
this Policy to be returned to us to make the change. The amounts and types of
benefits allowed to be added must be in accordance with our rules as of the date
of your request.

VARIABLE ACCOUNT

The Variable Account is an account established by us pursuant to the laws of the
State of Texas, to separate the assets funding the variable benefits for the
class of Policies to which this Policy belongs from the other assets of
Southland Life Insurance Company.

The Variable Account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940 (the "1940 Act"). All 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
income, gains or losses of the Company. The assets of the Variable Account are
our property, but are separate from our General Account and any other separate
account maintained by us. That portion of the assets of the Variable Account
which is equal to the reserves and other Policy liabilities with respect to the
Variable Account is not chargeable with liabilities arising out of any other
business we may conduct.

We reserve the right to transfer to our General Account any assets that are in
excess of such reserves and other liabilities.

The Variable Account is divided into Subaccounts, each of which invests in a
corresponding Portfolio designed to meet the objectives of the Subaccount. The
current Subaccounts are shown on the Policy Schedule. We may, from time to
time, make the following changes to the Variable Account, subject to review by
the SEC and other regulatory authorities:

(1) create new separate accounts for the Policy;

(2) combine separate accounts, including the Variable Account;

(3) add new Subaccounts to or remove existing Subaccounts from the
Variable Account or combine Subaccounts;

(4) make new Subaccounts or other Subaccounts available to such classes
of Policies or contracts as we may determine;

(5) add new Portfolios or remove existing Portfolios;

(6) if shares of a Portfolio are no longer available for investment or if
we determine that investment in a Portfolio is no longer appropriate
in light of the purposes of the Variable Account, substitute a
different Portfolio for any existing Portfolio;

(7) deregister the Variable Account under the 1940 Act if such
registration is no longer required;

(8) operate the Variable Account as a management investment company under
the 1940 Act or as any other form permitted by law; and
(9) make any changes to the Variable Account or its operations as may be
required by the 1940 Act or other applicable law or regulations.

We reserve the right to limit the number of Subaccounts in which you may invest.

15
<PAGE>

GUARANTEED INTEREST ACCOUNT

The Guaranteed Interest Account is another account to which you may allocate Net
Premiums or make transfers. It is part of our general account assets.
Interest is credited at the guaranteed annual effective interest rate shown on
the Policy Schedule or may be credited at a higher rate.

ACCUMULATION UNIT VALUE

Net Premiums allocated to a Subaccount or amounts transferred to a Subaccount
are converted into Accumulation Units, a unit of measure used to calculate
Subaccount Accumulation Value. For any Subaccount, the number of Accumulation
Units credited is determined by dividing the dollar amount directed to the
Subaccount by the value of the Accumulation Unit for that Subaccount for the
Valuation Period on which the Net Premium is received or the transfer is
effective. In this manner, an increase in Subaccount Accumulation Value under a
policy occurs by the addition of Accumulation Units of that Subaccount.

The Accumulation Unit Value for each Subaccount was arbitrarily set initially at
$10 when the Subaccount was established. Thereafter, for any Subaccount, the
Accumulation Unit Value for a Valuation Period equals the Accumulation Unit
Value for the preceding Valuation Period multiplied by the Accumulation
Experience Factor (described below) for the current Valuation Period. Decreases
in Subaccount Accumulation Value under a Policy are effected by the cancellation
of an appropriate number of Accumulation Units of a Subaccount. Accumulation
Units are canceled as of the end of the Valuation Period in which the Company
received notice of or instructions regarding the event.

ACCUMULATION EXPERIENCE FACTOR

For each Subaccount of the Variable Account, the Accumulation Experience Factor
reflects the investment experience of the Portfolio in which that Subaccount
invests and the charges assessed against that Subaccount for a Valuation Period.
The Accumulation Experience Factor is calculated by dividing

(1) by (2) and subtracting (3) from the result, where:

(1) is the result of:

a. the net asset value per share of the Portfolio held in the
Subaccount, determined at the end of the current Valuation
Period; plus

16
<PAGE>

b. the per share amount of any dividend or capital gains
distributions made by the Portfolio held in the Subaccount, if
the "ex-dividend" date occurs during the current Valuation
Period; plus or minus

c. a per share charge or credit for any taxes reserved for, which is
determined by the Company to have resulted from the operations of
the Subaccount.

(2) is the net asset value per share of the Portfolio held in the
Subaccount, determined at the end of the last prior Valuation Period.

(3) is the daily factor representing the mortality and expense risk
charge and the administrative charge deducted from the Subaccount
adjusted for the number of days in the Valuation Period.

SUBACCOUNT ACCUMULATION VALUE

The Subaccount Accumulation Value for any Subaccount as of the Policy Date is
equal to the amount of the initial Net Premium allocated to that Subaccount .

On subsequent Valuation Days, the amount of the Subaccount Accumulation Value is
calculated as follows:

1. The number of Accumulation Units in that Subaccount as of the
beginning of the current Valuation Period multiplied by that
Subaccount's Accumulation Unit value for the current Valuation
Period; plus
2. Any additional Net Premiums allocated to that Subaccount during the
current Valuation Period; plus
3. Any Accumulation Value transferred to the Subaccount during the
current Valuation Period (including any amounts released from the
Policy Loan Account and allocated to that Subaccount during the
current Valuation Period); minus
4. Any Accumulation Value transferred from the Subaccount during the
current Valuation Period (including any amounts transferred to the
Policy Loan Account) and; the portion of any Excess Transfer Charge
allocated to the Subaccount during the current Valuation Period;
minus
5. The portion of any Gross Withdrawals allocated to that Subaccount
during the current Valuation Period (including the portion of the
Surrender Charge resulting from a decrease in Stated Death Benefit
allocated to the Subaccount during the current Valuation Period);
minus
6. The portion of the monthly deduction allocated to such Subaccount,
if a Monthly Processing Date occurs during the current Valuation
Period.

GUARANTEED INTEREST ACCOUNT ACCUMULATION VALUE

The Guaranteed Interest Account Accumulation Value as of the Policy Date is
equal to the amount of the initial Net Premium allocated to the Guaranteed
Interest Account.

On subsequent Valuation Days, the Guaranteed Interest Account Accumulation Value
is calculated as follows:

17
<PAGE>

1. The Guaranteed Interest Account Accumulation Value as of the end of
the preceding Valuation Period plus any interest earned during the
Valuation Period; plus

2. Any additional Net Premiums allocated to the Guaranteed Interest
Account plus interest credited to those premiums during the current
Valuation Period; plus

3. Any Accumulation Value transferred to the Guaranteed Interest
Account during the current Valuation Period (including any amounts
released from the Policy Loan Account and allocated to the
Guaranteed Interest Account during the current Valuation Period);
minus

4. Any Accumulation Value transferred from the Guaranteed Interest
Account during the current Valuation Period (including any amounts
transferred to the Policy Loan Account) and the portion of any
Excess Transfer Charge allocated to the Guaranteed Interest Account
during the current Valuation Period; minus

5. The portion of any Gross Withdrawals allocated to the Guaranteed
Interest Account during the current Valuation Period (including the
portion of any Surrender Charges resulting from a decrease in
Stated Death Benefit allocated to the Guaranteed Interest Account
during the current Valuation Period); minus

6. The portion of the monthly deduction allocated to the Guaranteed
Interest Account, if a Monthly Processing Date occurs during the
current Valuation Period.

Interest Credits
We guarantee that the Accumulation Value in the Guaranteed Interest Account will
be credited with an effective annual interest rate of at least 3.5%. We may, at
our discretion, credit a higher current rate of interest.

TRANSFERS

You may transfer amounts among Subaccounts and the Guaranteed Interest Account.
Transfers may be made based upon instructions given by Written Notice or by
telephone. Any such transfer will take effect at the end of the Valuation
Period during which we receive such notice at our Customer Service Center, or
such later date as you may specify in your Written Notice or telephone request.

Each transfer must be for a minimum of $100 or the balance in the Subaccount or
the Guaranteed Interest Account, if less. The minimum amount which can remain
in a Subaccount or in the Guaranteed Interest Account as a result of a transfer
is $100.00. Any amount below this minimum must be included in the amount
transferred.

Once during the first 30 days of each Policy Year, you may transfer amounts to
or from the Guaranteed Interest Account. Transfer requests received within 30
days prior to the Policy Anniversary will be considered requests to transfer on
the Policy Anniversary. A request to transfer to or from the Guaranteed
Interest Account that is received on the Policy Anniversary or within the
following 30 days will be processed if it is the first such transfer request
received during the 30 day period. Requests for transfer to or from the
Guaranteed Interest Account received at any other times will not be processed.

The maximum transfer amount from the Guaranteed Interest Account to the
Subaccounts of the Variable Account in any Policy Year is the greater of:

18
<PAGE>

a. 25% of the Guaranteed Interest Account Accumulation Value immediately
prior to the first transfer or Withdrawal in that Policy Year from the
Guaranteed Interest Account;
b. $100; or
c. the sum of the amounts that were transferred out of and withdrawn
from the Guaranteed Interest Account in the prior Policy Year.

Excess Transfer Charge
The first 12 transfers per Policy Year will be allowed free of charge.
Thereafter, a $10.00 transfer charge may be deducted from the amount
transferred. All transfers effected during a single Valuation Period will be
counted as one transfer for purposes of the transfer charge. Transfers due to
the operation of Dollar Cost Averaging or Automatic Rebalancing are not included
in determining the limit on the number of transfers allowed without a charge.
The charge will be deducted from your Subaccount Accumulation Value and
Guaranteed Interest Account Accumulation Value in the same proportion as amounts
transferred from those values.

Dollar Cost Averaging Facility
If you have at least $10,000 of Accumulation Value in the Money Market
Subaccount shown on the Schedule, you may choose to transfer a specified dollar
amount each month from this Subaccount and have a percentage of that amount
transferred to other Subaccounts of the Variable Account. Dollar Cost Averaging
transfers may not be made to the Guaranteed Interest Account. You may elect the
Dollar Cost Averaging transfer option at any time prior to maturity by Written
Notice.

The minimum amount that you may elect to transfer each month is $100. The
maximum amount that you may transfer is equal to the Subaccount Accumulation
Value (when the election is made) of the Subaccount from which the transfer is
taken divided by twelve.

The percentage to be transferred to the other Subaccounts must be designated in
whole number percentages. No specific dollar designation may be made to the
Subaccounts. If you elect to transfer to a particular Subaccount, the minimum
percentage that may be transferred to that Subaccount is 5% of the total amount
transferred. Transfers for Dollar Cost Averaging will be effected on the
Monthly Processing Dates. If, on any transfer date, the Accumulation Value in
the selected Subaccount is equal to or less than the amount you have elected to
have transferred, the entire amount will be transferred, and this option will
end. If still in effect, Dollar Cost Averaging will end as of the Valuation Day
immediately preceding maturity.

You may change the transfer amount or the Subaccount to which transfers are to
be made once each Policy Year. You may cancel this election by Written Notice at
least seven days before the next transfer date. Any transfer under this option
will not be included for purposes of computing the transfer charge .

Automatic Rebalancing
Automatic Rebalancing allows you to match your Accumulation Value in each
Subaccount to your allocation percentage for new premiums. Automatic
Rebalancing can be elected in your application or by completing the Automatic
Rebalancing form and returning it to our Customer Service Center. As of the
first Valuation Date of each calendar quarter thereafter we will reallocate your
Net Accumulation Value so that the amount in each Subaccount matches your most
recent premium allocation. Automatic Rebalancing may not begin until the
Monthly Processing Date following the end of the Free Look Period. Automatic
Rebalancing will continue until we receive Written Notice or a telephone request
at our Customer Service Center to terminate.

While this feature is in effect, we require that you allocate no more than 35%
of your premiums to any one Subaccount, and you must allocate your premiums to
at least five Subaccounts. If at any time during the

19
<PAGE>

operation of the Automatic Rebalancing feature you request a change in premium
allocation which does not meet these requirements, we will notify you that your
allocation must be changed. We will not process such a request unless you also
request that the Automatic Rebalancing feature be discontinued.

When you request a change in premium allocation that meets these requirements,
your net Accumulation Value will be reallocated as of the Valuation Date that we
receive your written allocation instructions. Amounts will be transferred among
the Subaccounts to match the allocation for new Premiums.

During the operation of Automatic Rebalancing, you may not change your
allocation percentage to the Guaranteed Interest Account by more than 25% of the
percentage previously allocated to the Guaranteed Interest Account.

If you change your Premium allocation more than five (5) times per Policy Year,
there will be a $25 charge taken from your Accumulation Value. This charge will
be deducted from each of the Subaccounts of the Variable Account and the
Guaranteed Interest Account in the same proportion that your Accumulation Value
in each Subaccount and Guaranteed Interest Account bears to your Net
Accumulation Value as of the Valuation Day the allocation change is effective.

You may elect either Dollar Cost Averaging or Automatic Rebalancing, but not
both. Other transfers may not be made during Automatic Rebalancing.

POLICY SURRENDER AND WITHDRAWALS

Policy Surrender
You may surrender this Policy for its Cash Surrender Value by Written Notice.
We must receive the Policy and your request during the Insured's lifetime. We
will pay the Cash Surrender Value within seven days following receipt of the
Written Notice. The Policy will be canceled on the date of receipt of the
Written Notice.

Withdrawals
You may withdraw part of the Cash Surrender Value after the first Policy Year by
Written Notice or request by telephone. We must receive the request during the
Insured's lifetime.

The maximum Withdrawal is the amount which will leave $500 as Cash Surrender
Value for the Policy. The amount withdrawn from the Guaranteed Interest Account
may not be greater than the total Withdrawal times the ratio of the Accumulation
Value in the Guaranteed Interest Account to the total unborrowed Accumulation
Value immediately prior to the Withdrawal. It cannot cause the Stated Death
Benefit to reduce below the minimum Stated Death Benefit of $50,000. The
minimum Withdrawal amount, the maximum number of Withdrawals per Policy Year and
the Withdrawal Transaction Charge are shown below:
<TABLE>

<S> <C>
Minimum Withdrawal amount: $500
Maximum number of Withdrawals per Policy Year 12
Withdrawal Transaction Charge: the lesser of $ 25 or
2% of the amount
requested
</TABLE>

If death benefit type A is in effect, a Withdrawal will reduce the Accumulation
Value and the Stated Death Benefit. However, if the Withdrawal is the first
Withdrawal of that Policy Year, the Insured's attained age is less than 81 at
the time of the Withdrawal, and the Withdrawal occurs less than 16 years
following the date of issue, then the Withdrawal will not reduce the Stated
Death Benefit if the amount of the Withdrawal is less than 5% of the Stated
Death Benefit. If the above conditions are met and the amount of the

20
<PAGE>

Withdrawal exceeds the greater of 10% of the Accumulation Value immediately
prior to the Withdrawal and 5% of the Stated Death Benefit, the Stated Death
Benefit will only be reduced by the amount by which the Withdrawal exceeds the
greater of 10% of the Accumulation Value immediately prior to the Withdrawal and
5% of the Stated Death Benefit. The Stated Death Benefit will be reduced in
proportion to the reduction in Accumulation Value caused by the Gross
Withdrawal. The decrease in Accumulation Value will occur on the day we process
the Withdrawal; however, the decrease in Stated Death Benefit will be effective
as of the next Monthly Processing Date. If the Withdrawal occurs during the
first 14 Policy Years or first 14 years following an increase in Stated Death
Benefit, a Surrender Charge will be assessed.

If death benefit type B is in effect, a Withdrawal will reduce the Accumulation
Value but the Stated Death Benefit will not be reduced as the Accumulation Value
reflects the decrease.

You may tell us how to allocate the Gross Withdrawal among the Subaccounts and
the Guaranteed Interest Account. If you do not, the Withdrawal will be
allocated among the Subaccounts and the Guaranteed Interest Account on a pro
rata basis.

We will pay a withdrawal request within seven days following our receipt of the
request.

Withdrawal Transaction Charge
A Withdrawal Transaction Charge of the lesser of $25 or 2% of the amount
requested will be deducted from the requested Withdrawal amount on any
Withdrawal made during a Policy Year after the first Withdrawal. The Withdrawal
Transaction Charge will be deducted from your Net Accumulation Value on the same
basis as the Withdrawal is taken.

POLICY LOANS

Loan Benefits
This Policy has loan benefits that are described below. Any outstanding Policy
Debt will be deducted from proceeds payable at the Insured's death, on maturity
or on Surrender.

Making a Policy Loan
After the first Policy Anniversary, you may obtain a policy loan from us by
submitting a Written Request or telephone request to our Customer Service
Center. This Policy is the only security required. The available loan amount
at any time is the maximum loan amount less any outstanding Policy Debt. The
maximum loan amount is equal to 90% of the Policy's Cash Surrender Value at the
time of the loan. The minimum amount you may borrow is $100.

Certain loan amounts taken after the earlier of:

1. the tenth Policy Anniversary, or
2 the fifth Policy Anniversary if the Insured's attained Age is 60 or
greater,

will be considered preferred loan amounts as described below.

During each Policy Year of preferred loan eligibility amounts, the first loan
made during that year will be considered a preferred loan amount up to a maximum
of 10% of the Net Accumulation Value. Any amount loaned later in that Policy
Year will not be considered a preferred loan amount.

If the preferred loan amount made during any Policy Year is less than the
maximum allowed, the balance may not be carried over to increase the eligible
preferred loan amount of any subsequent Policy Year.

21
<PAGE>

Beginning with the 21st Policy Year, all loan balances will be considered to be
preferred loan amounts.

The amount of any Accumulation Value in the Guaranteed Interest Account equal to
any preferred loan amount on this policy will be credited with interest at the
rate of 4%.

Interest
The maximum interest rate on any loan is 6% per year. We have the option of
charging a lower rate. Interest accrues daily and becomes a part of the
Outstanding Policy Debt if not paid when due. Interest payments are due on each
Policy Anniversary. If interest is not paid when due, it will be added to the
Policy Debt and will be charged interest at the rate then being charged on the
loan.

Other Borrowing Rules
When a policy loan is made, or when interest is not paid when due, an amount of
Accumulation Value sufficient to secure the Policy Debt is transferred out of
the Variable Account and the Guaranteed Interest Account and into the Policy
Loan Account of our General Account. You may tell us how to allocate the
remaining Accumulation Value among the Subaccounts and the Guaranteed Interest
Account provided that the amount remaining in the Subaccount or the Guaranteed
Interest Account as a result of the allocation is at least $100. Otherwise, the
Accumulation Value will be allocated among the Subaccounts and the Guaranteed
Interest Account in the same proportion that the Policy's Accumulation Value in
each Subaccount and the Guaranteed Interest Account bears to the total
Accumulation Value in all Subaccounts and the Guaranteed Interest Account on the
date we make the loan.

Accumulation Value in the Policy Loan Account of the General Account will be
credited with 4% interest annually. The interest earned will be allocated to
the Subaccounts and the Guaranteed Interest Account in the same proportion that
Net Premiums are being allocated and will be transferred on each Policy
Anniversary.

If the outstanding Policy Debt exceeds the Accumulation Value less any Surrender
Charge and the Monthly Deduction, the Policy will be in default. We will send
you a notice of the amount you must pay. If you do not pay this amount within
61 days after we send notice, the Policy will terminate without value. We will
send the notice to you and to any assignee of record at our Customer Service
Center.

Any loan transaction will permanently affect the values of this Policy.

Repaying a Policy Debt
You can repay a Policy Debt in part or in full anytime during the Insured's life
prior to maturity while this policy is in force. If there is an outstanding
Policy loan, any payment which is not a scheduled premium received before
maturity is considered loan repayment unless otherwise indicated. When a loan
repayment is made, Accumulation Value in the General Account related to that
payment will be transferred into the Subaccounts and the Guaranteed Interest
Account in the same proportion that net premiums are then being allocated unless
you provide other instructions.

POLICY CHARGES

22
<PAGE>

DAC Tax Charge. A charge currently equal to 1.5% of each premium payment is
deducted to cover our estimated cost for the Federal income tax treatment of
deferred acquisition costs determined solely by the amount of life insurance
premiums we receive.

The sales charge covers the cost of distribution, costs of preparing our sales
literature, other promotional expenses, and other direct and indirect expenses.
The amount of this charge cannot be specifically related to sales expenses in a
particular year since we recover these costs over the period the Policies remain
in effect. We pay the sales expenses from our own resources, including this
sales charge, any sales Surrender Charge we may collect and any profit we may
earn on the mortality and expense risk charge deducted under the Policy. The
sales charge may be reduced or waived for certain group or sponsored
arrangements or corporate purchasers.

Surrender Charge
We assess a surrender charge against your Accumulation Value upon a Surrender,
reduction in Stated Death Benefit or lapse of your Policy in the first fourteen
Policy years, or the fourteen Policy years following an increase in Stated Death
Benefit (herein referred to as an addition of a new coverage segment of Stated
Death Benefit). The surrender charge is designed to recover our expenses in
issuing and distributing Policies. The surrender charge consists of two
charges: an administrative surrender charge and a sales surrender charge.

During the first fourteen years of the Policy or within 14 years of an increase
in the Stated Death Benefit, if you request a decrease to the Stated Death
Benefit of your Policy or take a Withdrawal which decreases the Stated Death
Benefit, we will deduct a portion of the surrender charge from your Net
Accumulation Value. The amount of the surrender charge which will be deducted
from your Net Accumulation Value on the decrease will equal the surrender charge
in effect before the reduction minus the surrender charge in effect after the
reduction.

Decreases as a result of a change to your death benefit option do not result in
a surrender charge deduction from your Net Accumulation Value and future
surrender charges will not be reduced.

Increases in the Stated Death Benefit as a result of changes in death benefit
option do not result in an increase in the maximum sales surrender charge. All
other increases in Stated Death Benefit will increase the maximum surrender
charges.

Administrative Surrender Charge
The administrative surrender charge is equal to four dollars ($4.00) per $1,000
of Stated Death Benefit.

The administrative surrender charge remains level for the first nine years
following issuance of the Policy or the effective date of a coverage segment,
then decreases by one-sixth of the amount in effect at the end of the 9th Policy
year until it reaches zero at the beginning of the fifteenth year, or the year
in which the Insured reaches Age 98, whichever is earlier.

23
<PAGE>

During the first 14 Policy years or within 14 years of an increase in the Stated
Death Benefit, if you request a decrease to the Stated Death Benefit or take a
Withdrawal which causes the Stated Death Benefit to decrease, your
administrative surrender charge will decrease in the same proportion that the
Stated Death Benefit decreases.

The administrative surrender charge is designed to partially cover the
administrative expenses associated with setting up your Policy (other than sales
expenses), such as application processing, establishment of Policy records and
insurance underwriting costs. It also includes costs associated with the
development and operation of our systems for administering the policies. We do
not expect to profit from the administrative surrender charge.

Sales Surrender Charge
The sales surrender charge is equal to 50.0% of actual premiums paid up to one
Target Premium plus 40% of any additional premiums paid up to two Target
Premiums. However, in the first two Policy Years or the first two years
following an increase in Stated Death Benefit, the sales surrender charge is
capped at 26% of premiums paid up to one Target Premium, plus 6% of premiums
paid between one and two Target Premiums, plus 5% of all other premiums. Target
Premiums are not based on the planned premium you determine when you purchase
the Policy. Target Premiums are actuarially determined based on the Age, sex
and risk class of the Insured. The Target Premium for your Policy and any
Stated Death Benefit coverage segments added since the Policy Date will be
listed in the Schedule to your Policy. Upon a decrease in the Stated Death
Benefit the Target Premium for each segment will be reduced in the same
proportion that the Stated Death Benefit is reduced.

The maximum sales surrender charge for the Stated Death Benefit will be shown in
the Policy Schedule.

The maximum sales surrender charge for a Stated Death Benefit remains level for
the first nine Policy Years or for the first nine years following an increase in
a Stated Death Benefit segment, then decreases by 15% of the amount in effect at
the end of the 9th year each Policy year until it reaches zero at the beginning
of the fifteenth year, or the year in which the Insured reaches Age 98,
whichever is earlier.

Upon a decrease in the Stated Death Benefit other than due to a change in death
benefit option, the Target Premium for each segment will be reduced in the same
proportion that the Stated Death Benefit is reduced. The following rules
explain when a sales surrender charge is deducted on a decrease in Stated Death
Benefit, and how future sales surrender charges are adjusted. If the new target
Premium for each Stated Death Benefit segment is greater than or equal to the
sum of your paid Premiums which are allocated to the segment, the maximum sales
surrender charge you may pay in the future will be reduced, but a sales
surrender charge will not be deducted from your Accumulation Value. If the new
Target Premium for each Stated Death Benefit segment is less than the sum of
your paid Premiums which are allocated to the segment, your maximum sales
surrender charge you may pay in the future will be reduced and a sales surrender
charge will be deducted from your Accumulation Value. The new sales surrender
charge will be recalculated as if the new Target Premium was always in effect
for the segment. A deduction equal to the difference between the sales
surrender charge as calculated before and after the decrease will be taken from
your Accumulation Value.

If you request a decrease to the Stated Death Benefit or take a Withdrawal which
causes the Stated Death Benefit to be reduced, more than nine years following
the Policy date or the date of an increase to the Stated Death Benefit,
whichever is applicable, the maximum sales surrender charge you could pay in the
future will be reduced in the same proportion that the Stated Death Benefit is
reduced.

24
<PAGE>

The amount of the sales surrender charge in a Policy year is not necessarily
related to our actual sales expenses in that year. To the extent sales expenses
are not covered by the sales surrender charge, we will cover them from other
funds.

The charge is equal to our current monthly cost of insurance rate multiplied by
the net amount at risk under the Policy for Death Benefit. The net amount at
risk for the Base Death Benefit is equal to the difference between the current
Base Death Benefit and the amount of your Accumulation Value on the Monthly
Processing Date. For this purpose, the amount of your Accumulation Value is
determined after deduction of administrative charges and other supplemental
benefit charges due on that date, but before deduction of the cost of insurance
charges for the Base Death Benefit, and any Adjustable Term Insurance Rider on
the Adjustable Term Insurance Rider. The net amount at risk for the Adjustable
Term Insurance Rider is equal to the amount of the benefit provided. If the
Base Death Benefit at the beginning of the month is increased, for example, due
to the requirements of Federal income tax law definition of life insurance, net
amount at risk for the Base Death Benefit that month will also increase, but the
net amount at risk for any Adjustable Term Insurance Rider may be reduced.
Therefore, the amount of the cost of insurance charges will vary from month to
month with changes in the net amount at risk, changes in the relative makeup of
the death benefit, and with increasing Age of the Insured.

If the Death Benefit of your Policy consists of more than one segment because
there has been an increase in Stated Death Benefit, the charge is calculated
separately for each segment. The cost of insurance charge for each segment is
equal to our current monthly cost of insurance rate for each segment times the
net amount at risk for that segment of the Death Benefit. Net Amount at Risk
for each segment of the Death Benefit is calculated on the Monthly Processing
Date. Net amount at risk is allocated to each Stated Death Benefit segment in
the same proportion that the Stated Death Benefit of each segment bears to the
sum of the Stated Death Benefit for all coverage segments as of the Monthly
Processing Date.

The cost of insurance rate for a Policy or for a segment is based on the
Attained Age, sex and rate class of the Insured, and therefore varies from time
to time. We currently place Insureds in the following rate classes, based on
our underwriting: a smoker or nonsmoker standard rate class or a rate class
involving a higher mortality risk (a "substandard class").

We place the insured in a rate class when we issue the Policy, based on our
underwriting of the application. This original rate class applies to the
Initial Stated Death Benefit and any Adjustable Term Insurance Rider when added
to the Policy. When an increase in Stated Death Benefit is requested, we
conduct underwriting before approving the increase to determine whether a
different rate class will apply

25
<PAGE>

to the increase. If the rate class for the increase has lower cost of insurance
rates than the original rate class, the rate class for the increase also will be
applied to the Initial Stated Death Benefit. If the rate class for the increase
has higher cost of insurance rates than the original rate class, the rate class
for the increase will apply only to the increase in Stated Death Benefit, and
the original rate class will continue to apply to the Initial Stated Death
Benefit.

Our current cost of insurance rates may be less than the guaranteed rates. In
addition, current rates are greater for Policies with Stated Death Benefit (or
Target Death Benefit, if any) that is less than $250,000 on the Policy Date.
Our current cost of insurance rates will be determined based on our expectations
as to future mortality, investment expense and persistency experience. The
rates may change from time to time, but they will never be more than the
guaranteed maximum rates set forth in your Policy.

The guaranteed rates for standard classes are based on the 1980 Commissioners'
Standard Ordinary Mortality Tables, Age Nearest Birthday ("1980 CSO Tables")
sex-distinct. The guaranteed rates for substandard classes are based on
multiples or additives of the 1980 CSO Tables.

Cost of insurance rates (whether guaranteed or current) of an Insured in a
nonsmoker standard class are lower than guaranteed rates for an Insured of the
same age and sex in a smoker standard class.

Mortality and Expense Risk Charge. We will deduct a daily charge from the
assets in the Subaccounts to compensate Southland for mortality and expense
risks that we assume under the Policy. The daily charge is at the rate of
0.02466% (equivalent to an annual rate of 0.90%) on the assets of the Variable
Account. The mortality and expense risk charge is not deducted from the
Guaranteed Interest Account.

Portfolio Expenses
There are fees and charges deducted from the Portfolios. Please read the
prospectus for the Portfolios you are considering for complete details.

Persistency Refund
Each month your Policy or a coverage segment of Stated Death Benefit remains in
force after its tenth Policy Anniversary, we will credit the Accumulation Value
in the Subaccounts with a persistency refund equivalent to 0.35% of the
Accumulation Value in the Subaccounts on an annual basis for that segment
(0.02917% monthly). The persistency refund will be added to the Subaccounts in
the same proportion that your Accumulation Value in each Subaccount bears to the
total of Accumulation Value in the Subaccounts on the Monthly Processing Date.

REPORTS

Annual Report
Each year, the Owner will be mailed an annual report that shows the progress of
the Policy. This report will show for the last Policy Year the current
Accumulation Value, Cash Surrender Value and premiums paid since the last
report. The report will also show the allocation of your Accumulation Value as
of the date of the report and the amounts added to or deducted from your
Subaccount Accumulation Values and Guaranteed Interest Account Accumulation
Value since the last report. The report will include any other

26
<PAGE>

information that may be currently required by the insurance supervisory official
of the jurisdiction in which the policy is delivered.

Other Reports
The Owner may request a report illustrating future values of the policy under
both guaranteed and current assumptions. A reasonable fee not to exceed $50 may
be charged for this report.

GENERAL POLICY PROVISIONS

This Policy, the attached application, any additional riders or endorsements,
and any supplemental applications make up the entire contract between you and
us. In the absence of fraud, statements in the application will be considered
representations and not warranties. No statement will void this Policy or be
used in defense of a claim unless contained in the application.

Policy Incontestability
We cannot contest this Policy after it has been in force for two years from the
issue date, during the Insured's lifetime except for non-payment of premium. No
benefits added to your Policy after the issue date can be contested after two
years from the effective date of such benefit, during the Insured's lifetime
except for non-payment of premium.

Termination
All coverage under this Policy will terminate on the first to occur of one of
these events:
1. you request that coverage terminate; or
2. the Insured dies; or
3. this Policy matures; or
4 the grace period ends; or
5. this Policy is surrendered.

On termination of this Policy, we will make any payment that may be applicable.

Age and Sex Misstatement
The amount of insurance under this Policy is based on the Insured person's sex
and age nearest birthday on the Policy Date. If either the sex or age shown on
Page 3 is wrong, the Stated Death Benefit will be adjusted. The adjusted death
benefit will be that which would be purchased by the most recent cost of
insurance charge at the correct age and sex.

Legal Action
No legal action can be brought against us until 60 days after written proof of
death or other loss is given to us. No such action can be brought more than
three years after such proof is furnished to us.

Suicide
If the Insured commits suicide during the first two years from the Policy Date,
instead of paying the Policy proceeds, we will make a limited payment of:
1. all premiums paid; less
2 any Policy Debt; less
3. any Withdrawals.

If the Insured commits suicide within two years from the effective date of any
increase in Stated Death Benefit or benefits provided by any rider, we will pay:
1. proceeds from this Policy and any benefits that have been in force
at least two years from their respective effective dates; plus

27
<PAGE>

2. the cost of insurance for any increase or additional benefits that
have been in effect less than two years from their respective
effective dates; less
3. any Policy Debt; less
4. any Withdrawals.

The payment will be made to the Beneficiary.

Modifications
No agent is allowed to make any changes in this Policy. Changes can only be
made by our President, a Vice President, or the Secretary.

Delay of Payment by Law
Payments of Withdrawals, Surrenders or Death Benefit Proceeds from the
Subaccounts will usually be made within seven days of receipt of the request at
our Customer Service Center. However, we may postpone the processing of any
such transactions for any of the following reasons:

a) When the New York Stock Exchange ("NYSE") is closed for trading other than
for customary holiday or weekend closings, or trading on the NYSE is
otherwise restricted, as determined by the SEC;

c) When the SEC by order permits a delay for the protection of Policyowners.

CONVERSION OF POLICY

At any time within the first 24 Policy months after issuance of the Policy or
after an increase in Stated Death Benefit while this Policy is in force during
the life of the Insured, the Owner may convert this Policy without evidence of
insurability for a new Policy on the life of the Insured providing benefits
which do not vary with the investment experience of the Variable Account. This
conversion is accomplished by the transfer of the entire amount in the
Subaccounts of the Variable Account to the Guaranteed Interest Account and the
allocation of all future premium payments to the Guaranteed Interest Account.
This will, in effect, serve as a conversion of the Policy to the equivalent of a
flexible premium universal life insurance policy. No charge will be imposed on
the transfer in exercising this exchange privilege. The exchange will be
subject to the following conditions:

(1) The new Policy will be on the flexible premium adjustable life
insurance plan that was being issued by Southland on the date of
issue of this Policy.

(2) The new Policy will provide the same amount of death benefit or the
same net amount at risk to Southland as this Policy and will have the
same Policy Issue Date and issue Age as this Policy.
(3) The cost of insurance rates for the new Policy will be those
applicable to flexible premium adjustable life policies in the same
risk classification as this Policy and issued on the same date as the
Policy.
(4) All Policy Debt under this Policy must be paid.

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<PAGE>

The contestable period, suicide period, and surrender charge period of the new
Policy will be measured from the Policy Date. The Accumulation Value of this
Policy will be transferred to the new Policy as of the effective date of the
conversion. The effective date of the conversion will be the date Southland
received Written Request for conversion at its Customer Service Center. When
exercising your conversion right, you are required to return the Policy to our
Customer Service Center, and we will send to you a new policy form which will
not allow you to allocate future premiums to Portfolios of the Variable Account.

HOW BENEFITS ARE PAID

Any payment of proceeds of this Policy will be made in a lump sum payment unless
you request an alternate method. You may request any of the alternate payment
options listed below if you prefer.

Selecting an Optional Payment
To select an option, send Written Notice to our Customer Service Center.
Payment under any option must be at least $20. Payment under these options to
any assignee, executor, administrator, trustee, corporation or association
cannot be made without our consent.

If you die while receiving payments, any remaining payments will be paid as a
lump sum to your estate. If payments are being made to the beneficiary and he
or she dies, any remaining payments will be paid as a lump sum to the
beneficiary's estate.

- --Option 1: Fixed Period - Equal payments for a fixed period of up to 25 years.
The longer the period, the lower the payments. Monthly payments per $1,000 are
shown in Table 1.

- --Option 2: Life Income - Equal payments for life. The longer the certain
period, if any, the lower the payments. Monthly payments per $1,000 are shown
in Table 2.

- --Option 3: Interest Only - Equal payments of 4% interest on the amount left
with us. That amount must be at least $1,000.

- --Option 4: Fixed installments - Equal payments totaling at least $60 per year
for each $1,000. The larger the amount, the shorter the period of payments.

Additional and more favorable forms of payment may be available at the time an
option is selected.

Provisions Relating to Options 1, 3, and 4
Payments made under this option are based on guaranteed compound interest at a
rate of 4% per year. They will be increased during any certain or guaranteed
periods by any excess interest earnings we declare. If death occurs during a
certain or guaranteed period, the lump sum payable to the deceased's estate will
be equal to the value of the remaining guaranteed payments reduced by compound
interest at 4% per year.

29
<PAGE>

<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE I

(Per $1,000 of Net Proceeds)

No. of Years Monthly No. of Years Monthly
Payable Installments Payable Installments
<S> <C> <C> <C>
1 $84.47 16 6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51

6 15.14 21 5.32
7 13.16 22 5.15
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71

11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE II

(Per $1,000 of Net Proceeds)

Age of
Payee
Age of Payee Nearest
Nearest Birthday Birthday
When First When First
Installment Installment
is Payable Monthly Installment is Payable Monthly Installments

10 15 20 10 15 20
5 Years Years Years Years 5 Years Years Years Years
Male Female Certain Certain Certain Certain Male Female Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 20 2.94 2.94 2.94 2.93 33 38 3.36 3.35 3.34 3.33

16 21 2.96 2.95 2.95 2.95 34 39 3.39 3.39 3.38 3.36

17 22 2.97 2.97 2.97 2.96 35 40 3.43 3.42 3.41 3.40

18 23 2.99 2.99 2.99 2.98 36 41 3.46 3.46 3.45 3.43

19 24 3.01 3.01 3.00 3.00 37 42 3.50 3.50 3.48 3.47

20 25 3.03 3.02 3.02 3.02 38 43 3.54 3.54 3.52 3.50

21 26 3.05 3.04 3.04 3.04 39 44 3.59 3.58 3.56 3.54

22 27 3.07 3.06 3.06 3.06 40 45 3.63 3.62 3.61 3.58

23 28 3.09 3.08 3.08 3.08 41 46 3.58 3.67 3.65 3.62

24 29 3.11 3.11 3.10 3.10 42 47 3.73 3.72 3.70 3.66

25 30 3.13 3.13 3.13 3.12 43 48 3.78 3.77 3.74 3.71

26 31 3.16 3.15 3.15 3.14 44 49 3.84 3.82 3.79 3.75

27 32 3.18 3.18 3.17 3.17 45 50 3.89 3.88 3.84 3.80

28 33 3.21 3.20 3.20 3.19 46 51 3.95 3.93 3.90 3.85

29 34 3.23 3.23 3.23 3.22 47 52 4.01 3.99 3.95 3.90

30 35 3.26 3.26 3.25 3.25 48 53 4.08 4.05 4.01 3.95

31 36 3.29 3.29 3.28 3.27 49 54 4.15 4.12 4.07 4.00

32 37 3.32 3.32 3.31 3.30 50 55 4.22 4.19 4.13 4.06
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
SETTLEMENT OPTION TABLE II
(Continued)

(Per $1,000 of Net Proceeds)

Age of
Payee
Age of Payee Nearest
Nearest Birthday Birthday
When First When First
Installment Installment
is Payable Monthly Installment is Payable Monthly Installments

10 15 20 10 15 20
5 Years Years Years Years 5 Years Years Years Years
Male Female Certain Certain Certain Certain Male Female Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
51 56 4.29 4.26 4.20 4.11 69 74 6.70 6.35 5.81 5.21

52 57 4.37 4.33 4.27 4.17 70 75 6.93 6.52 5.91 5.25

53 58 4.45 4.41 4.34 4.23 71 76 7.16 6.69 6.01 5.29

54 59 4.54 4.49 4.41 4.29 72 77 7.41 6.86 6.10 5.33

55 60 4.63 4.58 4.49 4.36 73 78 7.67 7.04 6.19 5.36

56 61 4.73 4.67 4.57 4.42 74 79 7.95 7.22 6.27 5.38

57 62 4.83 4.76 4.65 4.48 75 80 8.24 7.39 6.34 5.41

58 63 4.94 4.87 4.74 4.55 76 81 8.55 7.57 6.42 5.43

59 64 5.05 4.97 4.82 4.61 77 82 8.87 7.74 6.48 5.45

60 65 5.18 5.08 4.92 4.68 78 83 9.20 7.91 6.54 5.46

61 66 5.31 5.20 5.01 4.75 79 84 9.54 8.08 6.59 5.47

62 67 5.45 5.32 5.11 4.81 80 85 9.90 8.24 6.64 5.48

63 68 5.60 5.45 5.21 4.87 81 10.27 8.39 6.68 5.49

64 69 5.76 5.59 5.31 4.94 85 10.64 8.53 6.72 5.50

65 70 5.92 5.73 5.41 5.00 83 11.02 8.66 6.75 5.50

66 71 6.10 5.88 5.51 5.05 84 11.41 8.79 6.77 5.51

67 72 6.29 6.03 5.61 5.11 85 11.79 8.90 6.80 5.51

68 73 6.49 6.19 5.71 5.16
</TABLE>

<PAGE>

Exhibit 1A(5)(b)

ADJUSTABLE TERM INSURANCE RIDER

This Rider is a part of the Policy to which it is attached if this Rider is
shown in the Schedule. This Rider must be read with all Policy provisions.
This Rider does not participate in our surplus earnings. This Rider has no loan
provision or Cash Surrender Value. This Rider starts as of the Policy Date or,
if added later, the Monthly Processing Date as of or next following the date
your application for this Rider is approved by us.

THE DEATH BENEFIT

Subject to all the Rider's terms and upon receipt of due proof that the Insured
died while this Rider was in force, we will determine the benefit payable to the
Beneficiary which will provide the Target Death Benefit.

The amount of the term death benefit is the difference, at the time of the
determination of Death Proceeds, between the Target Death Benefit and the Base
Death Benefit provided by the Policy. In no event will this benefit be less
than zero. It is not increased or decreased by Policy Loan activity. For
example, if the Target Death Benefit is $100,000 at the time of determination
and the Base Death Benefit is $60,000 at the time of determination, this Rider's
death benefit is $40,000.

The Target Death Benefit is shown in the Schedule attached to your Policy. It
may be a constant amount or it may change at the beginning of a Policy Year.
The maximum amount of Target Death Benefit at issue is equal to five times the
Stated Death Benefit of your Policy. The Target Death Benefit may be reduced if
there is a Withdrawal. If a Withdrawal reduces the Base Death Benefit of your
Policy, the Target Death Benefit for the current year and all future years will
be reduced by an amount equal to the reduction to the Base Death Benefit and you
will receive a new Schedule reflecting the new Target Death Benefit. See your
Policy for details.

The Base Death Benefit provided by your Policy is defined in your Policy.

DEFINITIONS

The Insured means the person Insured under the Policy to which this Rider is
attached.

SURRENDER CHARGE

There is no Surrender Charge applicable to this Rider.
<PAGE>

COST OF INSURANCE

The cost of insurance for each coverage segment of this Rider is determined on a
monthly basis. The cost is added to the Policy's monthly deduction from the
Accumulation Value as of each Monthly Processing Date until this Rider
terminates. The cost of insurance rates will be determined by us from time to
time. They will be based on the issue Age and Premium Class of the Insured for
the segment, as well as the duration since the Policy Date or since the coverage
began. The cost of insurance for each Rider segment is calculated as the monthly
cost of insurance rate applicable to the segment multiplied by the death benefit
for the segment.

The monthly guaranteed maximum cost of insurance rates per $1,000 for this Rider
are shown in the Schedule on the Target Death Benefit Schedule attached to your
Policy.

OWNER

The Owner of the Policy is the Owner of this Rider.

INCONTESTABILITY

After this Rider has been in force during the Insured's life for two years from
the Policy Date, we will not contest the statements in the application for this
Rider attached at the time the Rider is issued.

After this Rider has been in force during the Insured's life for two years from
the effective date of any increase in the amount of insurance, we will not
contest the statements in the application for the increase.

After this Rider has been in force during the Insured's life for two years from
the effective date of any reinstatement of the Rider, we will not contest the
statements regarding the Insured in the application for such reinstatement of
this Rider.

SUICIDE EXCLUSION

If the Insured commits suicide, while sane or insane, within two years of the
Rider effective date, we will make a limited payment to the Beneficiary. We will
pay in one sum the amount of the cost of insurance for this Rider which was
deducted from the Accumulation Value. If the Insured commits suicide, while sane
or insane, within two years of the effective date of any increase in the amount
of insurance under this Rider, we will make a limited payment to the Beneficiary
for the increase. This payment will equal the cost of insurance which was
deducted from the Accumulation Value for the Increased portion of the death
benefit.

MISSTATEMENT OF AGE

2
<PAGE>

If the Insured's Age has been misstated, any amount payable by us will be
adjusted. The amount payable will be that which the cost of insurance which was
deducted from the Accumulation Value as of the last Monthly Processing Date
prior to the death of the Insured would have purchased for the Insured's correct
Age.

CHANGE IN AMOUNT OF COVERAGE

On any Policy Anniversary after the first Rider anniversary, the Target Death
Benefit under this Rider may be changed. The Target Death Benefit may be
increased or decreased by sending a Written Request to our Customer Service
Center. Any request for increased death benefits will automatically be an
increase to the Stated Death Benefit as well as to the Target Death Benefit
unless you specifically request an increase to only the Target Death Benefit.
You may increase or decrease the Target Death Benefit only during the 30-day
period preceding a Policy Anniversary. You may not increase insurance coverage
provided by this Rider after the Insured is Age 76. Any change in coverage may
not be for an amount less than $10,000. Such change is subject to the following
conditions:

a) Any decrease will reduce the insurance under this Rider in the
following order:

i) against insurance provided by the most recent increase;
ii) against the next most recent increase successively; and
iii) against insurance provided under the original application.

b) Any request for an increase must be applied for on a supplemental
application. The increase is subject to evidence satisfactory to us
that the Insured is still insurable according to our normal rules of
underwriting for this type of Policy. An increase will also be subject
to the existence of sufficient Net Cash Surrender Value to cover the
monthly deduction for the next two months. The maximum amount of Target
Death Benefit after an increase is equal to 5 times the Stated Death
Benefit of your Policy.

c) For any increase or addition to coverage, the effective date will be
the Policy anniversary that falls on or next follows the date the
supplemental application is approved by us. For any decrease in
coverage, the effective date will be the Policy anniversary that falls
on or next follows receipt of the Written Request to reduce coverage.
For any change in coverage, a supplemental Schedule will be issued.

d) Any increase to the Target Death Benefit will create a new coverage
segment of Adjustable Term Insurance Rider. The new segment will be
equal to the new Target Death Benefit, minus the Base Death Benefit,
minus the amount of Adjustable Term Insurance Rider attributable to the
Target Death Benefit prior to the increase. The new segment will no
event be less than zero. Each coverage

3
<PAGE>

segment will have a unique cost of insurance rate based on the
Insured's Age and Premium Class and smoker status at the time of the
increase, the Insured's sex, and the duration since the increase.

TERMINATION

This Rider will terminate on the earliest of the following dates:

1. the termination of the Policy;
2. Written Request from you to cancel this Rider;
3. the Policy Anniversary nearest the 100th birthday of the Insured.

Any deduction for the cost of insurance after termination of this Rider will not
be considered a reinstatement of this Rider nor a waiver by us of the
termination. Any such deduction will be credited to the Accumulation Value of
the Policy as of the date of the deduction.

REINSTATEMENT

If you reinstate your Policy under the reinstatement provisions provided in the
Policy, this Rider will be reinstated.

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>

Exhibit 1A(5)(c)

ACCIDENTAL DEATH BENEFIT RIDER

Benefit
This benefit is part of your Policy. It provides that, if the Insured dies as
the result of an accident, we will pay the accidental death amount then in
effect. This benefit takes effect on the date shown on your Policy Schedule.
Except as provided below, this benefit is subject to all the terms of your
Policy.

This benefit will end on the first to occur of:
1. the Policy Anniversary nearest the Insured's 70th birthday;
2. Policy maturity;
3. Policy termination; or
4. receipt by us of proper Written Request.

Description
If we receive proof of the Insured's accidental death, we will pay the
accidental death amount in effect on that date to the beneficiary. The amount
in effect on the effective date is shown on your Policy Schedule.

The accidental death amount may be increased, subject to proof of insurability,
or decreased on any Monthly Processing Date. The change in the accidental death
amount must be for an amount at least $5,000 and the accidental death amount may
not fall below $5,000.

The accidental death amount cannot be more than the Stated Death Benefit. If
the Stated Death Benefit is decreased below the accidental death amount, we will
automatically reduce the accidental death amount to the same level.

Accidental death is death directly and solely resulting from a bodily injury
caused by external accidental means. This injury must be evidenced by a visible
wound or bruise except in the case of drowning or internal injuries revealed by
an autopsy.

This benefit has no loan or cash values.

Limitations and Exclusions
Death must occur within 6 months of the injury and before the Policy Anniversary
on or nearest the insured person's 70th birthday. We will not pay an accidental
death benefit if death is in any way the result of:

1. disease or infirmity, or its treatment;
2. suicide or attempted suicide;
3. sensitivity to or overdose of drugs or taking poison;
4. war, declared or undeclared, including acts of aggression by any
country;
5. committing an assault or felony;
6. infection, other than of a wound caused by accidental means;

1
<PAGE>

7. flight or travel in, or descent from, any military or naval aircraft,
flight training, or any flight where the Insured was a pilot or crew
member.

We shall have the right and opportunity to examine the body if a claim is made.
We may also wish to make an autopsy if allowed by law. No autopsy will be made
unless we notify the claimant within 30 days after receipt of the claim notice.

Cost of This Benefit
The cost of this benefit is deducted as part of the cost of insurance for your
Policy. It is included in the monthly deduction for extra benefits.

The maximum amount of this benefit's cost included in that deduction is the
factor shown in the following table of Guaranteed Accidental Death Factors
multiplied by the accidental death amount as of that Policy month.
<TABLE>
<CAPTION>

- --------------------------------------------------------------------------------
Guaranteed Accidental Death Factors
(for determining maximum cost of insurance)
Standard or Preferred Rating Class
- --------------------------------------------------------------------------------
Attained Monthly Attained Monthly
Age Factor Age Factor
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
5-18 .08 53-56 .11
- --------------------------------------------------------------------------------
19-28 .09 57-60 .12
- --------------------------------------------------------------------------------
29-36 .08 61-64 .13
- --------------------------------------------------------------------------------
37-46 .09 65-67 .14
- --------------------------------------------------------------------------------
47-52 .10 68-69 .15
- --------------------------------------------------------------------------------
</TABLE>

(The maximum monthly cost of insurance for this benefit is the appropriate
factor from above times the Insured's rating factor for this benefit times the
number of $1,000's of accidental death benefit amount.)

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>
Exhibit 1A(5)(d)

ADDITIONAL INSURED BENEFIT RIDER

Person insured by this Rider [ ]

Benefit
This benefit is part of your Policy. Except as provided below, this benefit is
subject to all the terms of your Policy. It provides additional term insurance
on the person shown above. This benefit takes effect on the effective date
shown on your Policy Schedule.

This benefit will terminate on the first to occur of:
1. the Policy Anniversary nearest the 100th birthday of the Insured;
2. the Policy Anniversary nearest the 100th birthday of the additional
insured;
3. the Valuation Day on which the conversion option is exercised; or
4. Policy termination.

No extra benefits apply to the Insured under this benefit.

Description
We will pay to the Beneficiary the additional term insurance amount applicable
to the person covered under this benefit upon receipt of proof that the person
died while coverage was in force.

Payment of proceeds will be increased by any interest in the same manner as
provided by your Policy. We may deduct from the payment any monthly deduction
for this benefit that is unpaid in the grace period.

This benefit has no loan or cash value.

Cost of This Benefit
The cost of this benefit is deducted as part of the cost of insurance for your
Policy. It is included in the monthly deduction for extra benefits.

The maximum amount of this benefit's cost included in the monthly deduction is
the maximum cost of insurance for the person covered. The person's cost is the
term amount multiplied by the cost of insurance rate. The maximum cost of
insurance rate is that defined in your Policy for the sex, attained age and
rating class of the covered person for the term amount at issue and for each
increase in term amount.

Changes in Insurance Coverage
Coverage under this benefit may be increased or decreased by your Written
Request subject to the following:
1. Any change in coverage under this benefit must be for an amount of at
least $5,000.
2. Any decrease will become effective on the Monthly Processing Date
on or next following the date we receive the request. The new term
amount cannot be less than the minimum

1
<PAGE>

amount for this benefit shown on the Policy Schedule. The decrease
shall reduce insurance in the following order:

a. insurance provided by the most recent increase;
b. the next most recent increase in succession; and
c. insurance provided under the original application.

3. Any request for an increase must be applied for on a supplemental
application. The term amount cannot be more than the Stated Death
Benefit in effect on the Insured under your Policy. An increase shall
be subject to proof of insurability satisfactory to us. Any benefit
increase will be effective on the Monthly Processing Date after our
approval.

If the Stated Death Benefit of the Insured is decreased below the term amount in
effect for this benefit, we will automatically reduce that term amount to the
level of the new Stated Death Benefit.

Conversion Privilege before Age 65
This benefit may be converted to a new policy on any Monthly Processing Date
prior to attained age 70 of the additional insured or within 30 days following
the death of the Insured. Conversion may be to any plan of fixed or variable
life insurance that we offer for sale at that time. Proof of insurability is
not required unless the amount of coverage on the new policy exceeds the
coverage provided by this benefit, or if the additional insured adds a Rider to
the new Policy.

The Stated Death Benefit of a person's new policy may be any amount up to the
term amount. The Stated Death Benefit cannot be less than our required minimum
Stated Death Benefit on the new policy's issue date. The issue age will be the
person's age nearest birthday on that date.

During the conversion period, the insurance that is to terminate will continue
in effect. All coverage under this benefit will end at the end of the
conversion period and any new policy will become effective then.

The premium rating class of the new policy will be based on the person's rating
class for this benefit. The actual premium will be from the schedule of premium
rates then in effect.

No Riders may be included in the new policy without our consent.

Suicide
If the person covered under this benefit commits suicide within the first two
Policy Years from the effective date of this benefit, our total liability for
that person will be the cost of insurance for that person.

If the covered person commits suicide within two years from the effective date
of any increase in coverage, our total liability with respect to the increase
will be the cost of such increase.

2
<PAGE>

Incontestability
We cannot contest the person's coverage under this benefit after the coverage
has been in force two full Policy Years, during that person's lifetime. We
cannot contest any increase in coverage after that increase has been in force
two full Policy Years during that person's lifetime.

Reinstatement
This benefit may be reinstated according to the same rules we require for your
Policy. We require satisfactory proof that the person covered is insurable.

Age and Sex Misstatement
The amount of the person's insurance under this benefit is based on that
person's age nearest birthday and sex on the effective date of coverage under
this benefit. If the age or sex shown for this benefit is wrong, the amount of
insurance will be adjusted. The adjusted death benefit will be that which would
be purchased by the most recent cost of insurance charge at the correct age and
sex.

Beneficiary
The beneficiary of proceeds payable upon the death of the person covered under
this benefit is named on the Policy Schedule in the section which describes this
benefit. Unless otherwise provided, the interest of any beneficiary who dies
before the covered insured person will be paid in equal shares to the surviving
beneficiaries.

Proceeds payable on a person's death will be paid to his or her estate if no
beneficiary of this benefit survives. The beneficiary may be changed as
permitted by your Policy.

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>

Exhibit 1A(5)(e)

CHILDREN'S INSURANCE BENEFIT RIDER

Benefit
This benefit is part of your Policy. It provides term insurance as shown on the
Policy Schedule on an insured child as defined below. Except as provided below,
this benefit is subject to all the terms of your Policy.

This benefit takes effect on the effective date shown on your Policy Schedule.
This benefit will end on the Policy Anniversary nearest the Insured's 65th
birthday.

Each child's coverage terminates on the Policy Anniversary nearest his or her
22nd birthday unless this benefit has terminated.

Description
We will pay the insured child's term amount to the beneficiary upon receipt of
proof that the insured child died while this benefit is in force. We may deduct
from the payment any monthly deduction due for this benefit that is unpaid in
the grace period.

Each insured child's term amount is shown on your Policy Schedule.

Payment of proceeds will be increased by any interest in the same manner as
provided by your Policy.

This benefit has no loan or cash values.

Cost of This Benefit
The cost of this benefit is deducted as part of the cost of insurance for this
Policy. It is part of the monthly deduction for extra benefits.

The maximum monthly term cost of this benefit is $1.00 per unit times this
benefit's rating factor shown on the Policy Schedule.

Definition of Insured Child
"Insured Child" means the following:

1. a child, born to or adopted child by the Insured who is named in the
application for this Rider. On the date of the application, such child
must be older than 7 days of age and less than 18 years of age;

2. any child born to or adopted by the Insured who was living at the time
of the application, but not yet 8 days of age. The child will be
insured upon attaining the age of 8 days.

3. any child born to or adopted by the Insured after the Rider effective
date. The child will be insured upon attaining the age of 8 days.
<PAGE>

Automatic Paid-up Term Policies
If the Insured dies while this benefit is in force, we will issue paid-up term
policies in exchange for this benefit to insure each insured child covered at
the Insured's death. The amount of insurance will be the same as would have been
provided under this benefit.

Each insured child's coverage under the paid-up policies will end on the first
to occur of:
1. the Policy Anniversary nearest age 22; or
2. the Policy Anniversary nearest the Insured's 65th birthday
(assuming the Insured had survived).

After the paid-up term policy is issued, any applicable cash value information
will be available upon Written Request.

Conversion Privilege
Each insured child may convert this benefit's coverage to fixed or variable life
coverage without proof of insurability. This benefit must be in force with no
monthly deduction past due.

The premium class of the converted policy will be based on the rating class of
this benefit. The premium will be our rate in effect for the plan and amount of
the new policy on its issue date.

The converted policy may be any fixed or variable plan of life insurance that we
offer for sale. The request must be dated on or after such child's 18th birthday
and not later than 31 days after his or her 22nd birthday. The request and
first premium must be received by the Company during the insured child's
lifetime. The issue date of the converted policy will be the date we receive
the application and premium. The issue age will be the insured child's age
nearest birthday on the new Policy's issue date. The owner of the Policy will
be the insured child. The Stated Death Benefit of the converted policy can be
up to five times the insured child's term amount. The Stated Death Benefit of
the new policy cannot be less than the minimum required for that Policy. No
additional Riders can be added to the new policy.

An insured child who converts prior to the 22nd birthday will continue to be
covered under this benefit until that birthday, while this benefit is in force.
This conversion privilege also applies to the paid-up term insurance described
above.

Reinstatement
This benefit may be reinstated according to the same rules as we require for
your Policy. We require satisfactory proof that each insured child is insurable
as well as the Insured under your Policy.

Age and Sex Misstatement
If this benefit is based on any wrong age or sex, the insurance amount will be
changed to what would have been issued based on the correct age and sex.

Incontestability and Suicide
We cannot contest this benefit after it has been in force for two full years:
<PAGE>

1. unless the Insured dies within the two years; or

2. unless any insured child dies within the two years from the
effective date of the Policy, in which case only the insurance of
the deceased child can be contested after the two years.

If the insured person commits suicide within the two years, any liability is as
stated in the Policy. We will have no obligation under this benefit under
either the "Automatic Paid-up Term Policies" or "Conversion Privilege"
provisions.

The two year period begins on the effective date of this benefit.

Beneficiary
The beneficiary of proceeds of this benefit is the Insured, if living.
Otherwise, proceeds will be paid to the insured child's estate. The beneficiary
may be changed as permitted by your Policy.

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>

Exhibit 1A(5)(F)

EXCHANGE OF INSURED RIDER

Benefit
This Rider and the benefit it provides is a part of the Policy to which it is
attached if the Rider is shown in the Schedule. It must be read with all Policy
provisions. This Rider does not participate in our surplus earnings. This
Rider has no loan or Cash Surrender Value. This Rider effective date is the
Policy Date or, if added later, the Policy Anniversary on or next following the
date the application for this Rider is approved by us.

Description
While this Rider is in force, you may elect to exchange the current named
Insured under the Policy for a new Insured. The Policy will be continued on the
life of the new Insured.

Requirements for Exchange
Before exchange takes place, we must have all of the following:

1. An application for insurance signed by you and the new Insured;

2. The Policy returned by you for the appropriate changes;

3. Evidence that you have an insurable interest in the new Insured;

4. Evidence of the new Insured's insurability satisfactory to us;

5. Evidence of the release of any collateral assignment, or written
approval of the exchange by an assignee, plus other papers we may need;
and,

6. Payment of any applicable exchange charges.

Effective Date of Change
The Date of Exchange will be the Monthly Processing Date which coincides with or
next follows the date our requirements are met. Coverage on the current named
Insured will end on the day before the Date of Exchange. Coverage on the new
Insured will begin on the Date of Exchange.

Policy Date
The Policy date of the Policy will not change unless the new Insured was born
after the Policy's current Policy Date. In that event, the new Policy Date will
be the first anniversary of the Policy next following the birth date of the new
Insured.

Taxation
Under current federal tax law, the exercise of this rider is taxed as if the
policy was surrendered in full for cash. The Owner may realize taxable income
in such event.

1
<PAGE>

Stated Death Benefit of New Policy
The Stated Death Benefit of the Policy will remain the same unless increased or
decreased as provided in the Change in Requested Insurance Coverage provision of
the Policy. On and after the Date of Exchange, the minimum Death Benefit amount
as stated in the Death Benefit provision of the Policy will apply to the new
Insured.

Cost of Insurance Deductions
After the Date of Exchange, the cost of insurance for the Policy will be based
on the Policy year and the new Insured's sex, attained age, rate class, and the
cost of insurance rates described in the Policy. No cost of insurance deduction
is made for this Rider. If any other riders are attached to the Policy on or
after the Date of Exchange, the cost of insurance for the other riders will be
as described in the riders.

Account Values And Policy Loans
The Account Value of the Policy at the time of exchange will remain the same
unless withdrawn as provided in the Policy. Any Policy loan on the Policy at
the time of exchange will be continued unchanged.

Owner, Beneficiary, and Collateral Assignments
The Owner and Beneficiary of the Policy will remain the same unless changed as
provided in the Policy. The Policy will remain subject to any existing
collateral assignments.

Riders
Any Riders attached to the Policy will terminate on the day before the Date of
Exchange. The addition of any riders on or after the Date of Exchange will be
subject to our approval and such terms as we determine.

Incontestability
The incontestable provision stated in the Policy will be applicable to the
Policy for two years from the Date of Exchange as to any representatives which
induced as to make the exchange. On and after the Date of Exchange, the phrase
"Policy Date" in the incontestability provision of the Policy will be construed
to mean "Date of Exchange."

Suicide Exclusion
The suicide exclusion provision stated in the Policy will be applicable to the
Policy for two years from the Date of Exchange. On and after the Date of
Exchange, the phrase "Effective Date" in the Suicide Exclusion provision of the
Policy will be construed to mean "Date of Exchange."

Termination
This Rider will terminate on the earliest of the following events:

1. The termination or surrender of the Policy;

2
<PAGE>

2. The Policy matures;

3. The right to exchange is exercised; or

4. The receipt by us of a Written Request from you to cancel this Rider on
any Monthly Processing Date.

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>

Exhibit 1A(5)(g)

GUARANTEED INSURABILITY BENEFIT RIDER

Benefit
This benefit is part of your Policy. It takes effect on the date shown on your
Policy Schedule. Except as provided below, this benefit is subject to all the
terms of your Policy.

This benefit will end on the first to occur of:

1. the Policy Anniversary nearest the Insured's 40th birthday;
2. Policy maturity;
3. Policy termination; or
4. receipt by us of proper Written Request to terminate this benefit.

Description

You may increase the Stated Death Benefit of your Policy on the regular or
special option dates as defined below. These increases may be made regardless
of the Insured's health and occupation. An option date must occur after the
effective date of this benefit.

The effective date of any increase will be the option date. The premium rating
class of the increase will be the same as your Policy.

If premiums or the cost of insurance are being waived on an option date under
another Rider, we will continue to waive the premium or cost of insurance until
they are no longer waived under the waiver Rider.

This benefit has no loan or cash values.

Regular Option Dates
A regular option date occurs on the Policy Anniversary nearest the Insured's
22nd, 25th, 28th, 31st, 34th, 37th, and 40th birthdays.

In addition, you may take an additional regular option date on your first or
second Policy Anniversary, but not both.

Special Option Dates
A special option date will occur on:
1. the date of the Insured's first marriage;
2. the date of birth of each child born to the Insured; and
3. the date of adoption of each child adopted by the Insured.

Multiples of maximum amounts of insurance will be available for multiple births.
If you exercise a special option, the next regular option date will be canceled.
If you exercise another special option, the next following regular option that
has not been canceled will be canceled. If multiple option dates are exercised
due to multiple births, the corresponding multiple future option dates will be
canceled.
<PAGE>

Exercising an Option

To exercise an option you must send us written application. If the option is a
regular option date, we must receive the application within a period of 60 days
before and 30 days after the regular option date. If the option is a special
option date, we must receive the application within 30 days after the special
option date along with proof of the marriage, birth or adoption. Written
application must reach the Company during the Insured's lifetime.

The amount of each increase in Stated Death Benefit cannot be less than $10,000
or more than the insurability amount shown for this benefit. If the Stated
Death Benefit under this Policy is decreased below the insurability amount, we
will automatically reduce the insurability amount to the same level.

Limitations and Exclusions
We will not issue an increase under this benefit unless:
1. the Insured gives consent; and
2. you have an insurable interest in the Insured.

Cost of this Benefit
The cost of this benefit is deducted as part of the cost of insurance for your
Policy. It is included in the monthly deduction for extra benefits.

The maximum amount of this benefit's cost included in that deduction is the
factor in the following table of Guaranteed Insurability Factors multiplied by
the insurability amount.
<TABLE>
<CAPTION>

Guaranteed Insurability Factors
(for determining maximum cost of insurance)
Attained Age Monthly Factor Attained Age Monthly Factor
<S> <C> <C> <C>
0-4 .04 29-30 .11
5-8 .04 31-32 .12
9-12 .05 33-34 .13
13-15 .05 35-36 .14
16-18 .07 37 .15
19-23 .08 38 .17
24-26 .09 39 .19
27-28 .10
</TABLE>

(The maximum monthly cost of insurance for this benefit is the appropriate
factor from above times the number of $1,000's of insurability amount.)

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>

Exhibit 1A(5)(h)

WAIVER OF COST OF INSURANCE BENEFIT RIDER

Benefit
This benefit is part of your Policy. It provides that, if the Insured becomes
totally disabled, each month we will waive the monthly deductions for your
Policy and treat it as if you had paid this amount to us. This benefit takes
effect on the date shown your Policy Schedule. Except as provided below, this
benefit is subject to all the terms of your Policy.

This benefit will end on the first to occur of:
1. the Policy Anniversary on or nearest the Insured's 60th birthday;
2. Policy maturity;
3. Policy termination; or
4. receipt by us of proper Written Request.

Description
We will waive the monthly deductions described in your Policy when we receive
proof of the Insured's total disability. Monthly deductions will be waived only
if the total disability:
1. occurs before the Policy Anniversary on or nearest the Insured's 60th
birthday; and
2. lasts continuously for at least 6 months.

We will waive the monthly deductions from the first Monthly Processing Date
after the disability started. We will not waive the monthly deduction that
applies to any increase in coverage that occurs or to any benefits added during
disability. If monthly deductions are being waived under this benefit on the
Policy Anniversary on or nearest the Insured's 60th birthday, monthly deductions
will continue to be waived.

Policy Accumulation Value after a waiver begins will be the same as if the
amount waived had been paid each month as a premium and the same amount also
deducted as a monthly cost. Any cost of insurance deducted after a waiver is in
effect will be credited to the Accumulation Value of the Policy.

This benefit has no loan or cash values.

Proceeds at death will not include any monthly deductions waived after the
Policy month of death.

Definition of Total Disability
Total Disability means the complete incapacity of the Insured to earn any income
or do any work for which he or she is reasonably fitted by education, training
or experience. It must be caused by bodily injury or disease.

1
<PAGE>

The Insured will also be considered totally disabled on:
1. severance of 2 limbs at or above the wrist or ankle; or
2. complete and permanent loss of all sight in both eyes due to injury or
disease.

Exclusions
We will not waive the monthly deduction if total disability results in any way
from:
1. injury occurring or disease first manifested before this benefit was in
force;
2. intentionally self-inflicted injury;
3. war or act of war, declared or undeclared;

Notice and Proof of Total Disability
Unless it is not possible to send proof earlier, we must receive proof of
disability:
1. within one year after onset of total disability;
2. during the lifetime of the Insured; and
3. during the continuance of total disability.

Proof of Continuance of Total Disability
We will need regular proof from the Insured that he or she is still totally
disabled. Proof may include medical exams by doctors we choose. Waiver of the
monthly deduction will stop if:

1. proof is not sent when requested; or
2. the Insured becomes able to earn any income or do any work for which he
or she is reasonably fitted by education, training or experience.

Notice of Recovery from Total Disability
You must give Written Notice to us if and when the Insured recovers. This
Written Notice must be given as soon as the Insured recovers.

Cost of This Benefit
The cost of this benefit is deducted as part of the cost of insurance for your
Policy. It is included in the monthly deduction for extra benefits.

The maximum amount of this benefit's cost included in that deduction is the
factor shown in the following table of Guaranteed Waiver of Benefit Factors
multiplied by the Policy's total monthly deduction. The Policy's total monthly
deduction is the sum of all monthly deductions for the policy month for all
benefits except the part for this benefit.

2
<PAGE>

--------------------------------------------------------
Guaranteed Waiver of Benefit Factors
Standard or Preferred Rating Class
--------------------------------------------------------
Monthly Factor Monthly Factor
Attained ---------------- Attained -----------------
Age Male Female Age Male Female
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------
5 3.20% 4.80% 33 4.78% 7.17%
-------------------------------------------------------
6 3.20 4.80 34 4.88 7.33
-------------------------------------------------------
7 3.20 4.80 35 5.00 7.50
-------------------------------------------------------
8 3.20 4.80 36 5.14 7.67
-------------------------------------------------------
9 3.20 4.80 37 5.28 7.83
-------------------------------------------------------
10 3.20 4.80 38 5.44 8.01
-------------------------------------------------------
11 3.20 4.80 39 5.62 8.19
-------------------------------------------------------
12 3.20 4.80 40 5.80 8.40
-------------------------------------------------------
13 3.20 4.80 41 5.95 8.58
-------------------------------------------------------
14 3.20 4.80 42 6.09 8.75
-------------------------------------------------------
15 3.20 4.80 43 6.26 8.96
-------------------------------------------------------
16 3.26 4.88 44 6.52 9.26
-------------------------------------------------------
17 3.33 5.00 45 6.90 9.70
-------------------------------------------------------
18 3.42 5.13 46 7.43 10.34
-------------------------------------------------------
19 3.51 5.27 47 8.07 11.12
-------------------------------------------------------
20 3.60 5.40 48 8.82 11.99
-------------------------------------------------------
21 3.68 5.52 49 9.66 12.89
-------------------------------------------------------
22 3.76 5.64 50 10.60 13.80
-------------------------------------------------------
23 3.83 5.75 51 11.72 14.66
-------------------------------------------------------
24 3.91 5.87 52 12.99 15.54
-------------------------------------------------------
25 4.00 6.00 53 14.31 16.44
-------------------------------------------------------
26 4.09 6.13 54 15.61 17.39
-------------------------------------------------------
27 4.19 6.27 55 16.80 18.40
-------------------------------------------------------
28 4.30 6.41 56 17.97 19.46
-------------------------------------------------------
29 4.40 6.55 57 19.08 20.58
-------------------------------------------------------
30 4.50 6.70 58 20.04 21.77
-------------------------------------------------------
31 4.59 6.85 59 20.81 23.04
--------------------------------------------------------
32 4.69 7.0
----------------------------
</TABLE>

(The maximum monthly cost of insurance for this benefit is the appropriate
factor from above times the Insured's rating factor for this benefit times the
Policy's total monthly deduction.)

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>
Exhibit 1A(5)(i)

WAIVER OF SPECIFIED PREMIUM BENEFIT RIDER

Benefit

This benefit is part of your Policy. It provides that, if the Insured becomes
totally disabled, each month we will waive a specified amount of premium and
treat it as if you had paid this amount to us. This benefit takes effect on the
date shown on your Policy Schedule. Except as provided below, this benefit is
subject to all the terms of your Policy.

Description

We will waive the specified waiver amount, shown on your Policy Schedule, when
we receive proof of the Insured's total disability. The specified amount will
be waived only if the total disability:

1. occurs before the Policy Anniversary on or nearest the Insured's
60th birthday; and
2. lasts continuously for at least 6 months.

We will waive the specified amount from the first Monthly Processing Date after
the disability started. If amounts are being waived under this benefit on the
Policy Anniversary on or nearest the Insured's 60th birthday, the waiver will
continue.

During any period when the specified amount is being waived, no change in
coverage may be made except as provided under any Guaranteed Insurability
Benefit.

Policy accumulation values after a waiver begins will be the same as if the
amount waived had been paid in cash each month as a premium. Any premiums paid
in after a waiver is in effect will be credited to the Accumulation Value of
this Policy.

This benefit has no loan or cash values.

Proceeds at death will not include any amounts waived after the date of death.

Definition of Total Disability

"Total Disability" means the complete incapacity of the Insured to earn any
income or do any work for which he or she is reasonably fitted by education,
training or experience. It must be caused by bodily injury or disease.

The applicant will also be considered totally disabled on:
1. severance of two limbs at or above the wrist or ankle; or
<PAGE>

2. complete and permanent loss of all sight in both eyes due to
injury or disease.

Exclusions

Total disability which results from injury occurring or disease first manifested
before this benefit was in force, war or act of war, declared or undeclared, or
from intentionally self-inflicted injury is not covered.

Notice and Proof of Total Disability

Unless it is not possible to send proof earlier, we must receive proof of
disability:
1. within one year after onset of total disability;
2. during the lifetime of the Insured; and
3. during the continuance of total disability.

Proof of Continuance of Total Disability

We will need regular proof from the Insured that he or she is still totally
disabled. Proof may include medical exams by doctors we choose. Waiver of the
specified amount will stop if:

1. proof is not sent when requested; or
2. the Insured becomes able to earn any income or do any work for
which he or she is reasonably fitted by education, training or
experience.

Notice of Recovery from Total Disability

You must give Written Notice to us if and when the Insured recovers. This
Written Notice must be given as soon as the Insured recovers.

Cost of This Benefit

The cost of this benefit is deducted as part of the cost of insurance for your
Policy. It is included in the monthly deduction for extra benefits.

The maximum amount of this benefit's cost included in that deduction is the
factor shown on the following table of Guaranteed Waiver Benefit Factors
multiplied by the number of thousands of Stated Death Benefit shown on the
Policy Schedule.

Guaranteed Waiver Benefit Factors
(for determining maximum cost of insurance)
Monthly Waiver of Premium COI Rates
<TABLE>
<CAPTION>

Monthly Factor Monthly Factor

Preferred &a Non- Standard Preferred & Non- Standard
Attained Tobacco Male & Male & Attained Tobacco Male & Male &
Age Female Female Age Female Female
<S> <C> <C> <C> <C> <C>
18-30 .032 .040 43 .082 .110
31 .035 .044 44 .089 .120
</TABLE>

2
<PAGE>

(The maximum monthly cost of insurance for this benefit is the appropriate
factor from above times the number of thousands of Stated Death Benefit shown on
the Policy Schedule.)

Signed for the Company at Atlanta, Georgia.

SOUTHLAND LIFE INSURANCE COMPANY

SECRETARY

<PAGE>
Exhibit 1A(10)

Southland Life Insurance Company
Customer Service Center
P. O. Box 173789
Denver, CO 80217-3789
1-800-224-3035

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE APPLICATION

INSTRUCTIONS

- --------------------------------------------------------------------------------
FOR ALL APPLICATIONS
. Use dark ink to complete the application.
. Print LEGIBLY to avoid errors.
. Attach a complete illustration and all schedules associated with this
application to expedite policy issue process and ensure that the policy
is issued accordingly.
. Incomplete applications may require an amendment to be signed upon
delivery, or may be returned, which will delay the issue process.
. The issue state will be determined by the state in which the application
was signed unless otherwise directed on the Agent's Report.

SIGNATURES REQUIRED
. The signature of all proposed insureds (parent or guardian of the
proposed insured if below age 15).
. The signature(s) of the owner. If a corporation is the owner, one
officer, other than the proposed insured, should sign and indicate name
of corporation and title of signing officer.
. The signature of the agent/registered representative.

APPLICATION - PART I
SECTION A: General Information
A-3: Exercise Exchange of Insured Rider - complete this box to
identify policy to be exchanged and return the policy along with
the application and medical information on the new proposed
insured.
A-4: If the application is employer sponsored, and the policy will be
corporate owned, this question should be answered "No".

SECTION B: Proposed Insured Information
B-1: The legal name of the insured will appear on the policy as
indicated in this space. If the applicant desires a different name
to appear on the policy, it must be shown in Special
Instructions, Section M.
B-4: Insurance age is calculated age nearest birthday.

SECTION C AND SECTION D: Owner and Beneficiary
Designations
. If you are designating more than one owner or beneficiary, use Special
Instructions, Section O, and indicate the percentage of the split. For
example:
John Doe, Husband, 70%
Mary Doe, Mother, 30%

. If you are designating a trust as the owner or beneficiary, include the
name of the Trustee, the name of the Trust and the date of the Trust.
For example:
John Doe, Trustee, of the Revocable Life Insurance Trust of James
Doe, dated November 1, 1991.

SECTION C AND SECTION D (continued):
. When you are designating more than one owner,
include the social security number or tax
identification number for each respective owner in
Special Instructions, Section B.
. If you have children as owners or
beneficiaries, please refer to the brochure
entitled "Your Minor Child".

SECTION F: Special Dating Requested
. This section provides an option for indicating
a specific age and date on which the policy
applied for will be issued. This date is the
POLICY DATE only, and may differ from the
INVESTMENT DATE.

SECTION I: Premium Information
I-1: Consult your Administrator's Guide for List
Bill and EFT guidelines.
I-2: Electronic Funds Transfer (EFT) is a premium
payment method which the payor may elect. If
selected, the premium will automatically be
drafted from the payor's checking account.

SECTION J: Fund Transfers
J-1: You must have at least $10,000 of
Accumulation Value in the Fidelity Money Market
Subaccount or the Janus Short-Term Bond
Subaccount to exercise this option. The minimum
transfer amount each month is $100. The maximum
transfer amount is equal to the Accumulation Value
in the Subaccount from which the transfer
originates when the election is made, divided by
12.

SECTION K: 1035 Exchange Information
K-4: For purposes of 1035 Exchanges, this
information is required to carry over the correct
cost basis and loan amount.

SECTION O: Special Instructions
. Used for any additional information, alternate
or additional policy requests and continuing your
answers for owner and beneficiary designations.
. If you are requesting child rider(s) and need
to request beneficiary(ies) other than shown in
Section D, please indicate here. Include name(s)
of beneficiary(ies) and relationship.
. May be used to continue answers to question
K-12, if necessary.

APPLICATION - PART II Medical Information
This part of the application must be completed for
each person proposed for coverage unless the
person is medically examined.
<PAGE>

Southland Life Insurance Company
Customer Service Center
P. O. Box 173789
Denver, CO 80217- 3789
1-800-224-3035

Application for Flexible Premium Variable Life Insurance to Southland Life
Insurance Company

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Please Print All Information Using Dark Ink
- --------------------------------------------------------------------------------
SECTION A - General Information (Complete for all cases)
A1 [ ] Check here if insurance is for PENSION or similar tax qualified ERISA
plan.

A2 If above statement checked, list plan type
_________________________________
(Example: Profit-Sharing, Defined Contribution, Etc.)

A3 [ ] Exercise Right of Exchange Rider

A4 Employer Sponsored Plans check one:

Name of Insured under Policy to be Exchanged Policy #

Employee Owned? [ ] Yes [ ] No
_________________________________________
- --------------------------------------------------------------------------------
SECTION B - Proposed Insured (Complete for all cases. To apply for additional
insureds, complete Section G)
B1 [ ] Name (Print full name, include suffix - if name to appear differently
on policy, indicate in Section O)

(First, Middle, Last, Suffix)

___________________________________________________________________________
B2 Sex B3 Birthdate B4 Insurance Age B5 Birthplace

[ ] Male Month Day Year (Age Nearest Birthday) (State)

[ ] Female ____ ___ ____ _______ _______

B6 Social Security Number B7 Telephone Number B8 Height ___________

______ - ___ - ________ _____-_____-___________ B9 Weight ___________

B10 Address
(Street, Apt. No.)

_______________________________________________________________________________
(City) (State) (Zip Code)

______________________________________________ ______________ _______________
B11 Occupation B12 Describe Duties

_____________________________________ ______________________________________
B13 Employer Name Month Year

____________________________________________ B14 Employment date:______ ____

- --------------------------------------------------------------------------------
SECTION C - OWNER (Complete only if other than Proposed Insured)

C1 Owner Name (Print full name, include suffix--if name to appear differently
on policy, indicate in Section O)
(First, Middle, Last, Suffix)

_______________________________________________________________________________
C2 Relationship to Proposed Insured C3 Social Security Number or Tax I.D.
No. (include any hyphens)

_____________________________ _______________________
C4 Owner Address
(Street, Apt. No.)

_______________________________________________________________________________
(City) (State) (Zip Code)

______________________________________ ____________ _______________________

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION D -- Beneficiaries (Complete for all cases)
D1 Primary Beneficiary(ies) (Print Full Names) Relationship to Proposed
Insured Birthdate

______________________________________________ ____________________________

Contingent Beneficiary(ies) (Print Full Names) Relationship to Proposed
Insured Birthdate

______________________________________________ ____________________________
- --------------------------------------------------------------------------------
SECTION E - Plan Information (Complete for all cases)
E1 Flexible Premium Variable Policy
a. Product Plan Name

__________________________________________________________
b. Stated Death Benefit ________________________________________
c. Scheduled Periodic Premium $_____________________ (If premium varies
from year to year, attach schedule)
d. [ ] Option A (Stated Death Benefit. If no option selected, Option A
will apply.)
[ ] Option B (Stated Death Benefit plus Account Value)
e. First Year Pour-In (if any) $__________________________
f. Riders
[ ] Adjustable Term Rider $___________________ [ ] Additional Insured
$_____________________
(Attach Schedule of Target Death Benefits) (Complete Section G)
[ ] Accidental Death $________________________ [ ] Children's Insurance
Rider (# of Units) _____
[ ] Exchange of Insured (Complete Section H)
[ ] Waiver of Cost of Insurance [ ] Guaranteed Insurability Rider
[ ] Waiver of Specified Premium $______________
[ ] Other
---------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTION F-Special Dating Requested (If neither box checked below, policy
will be issued at age nearest birthday as
of issue date.) Mo. Day Year

F1 [ ] Date to Save Age F2 Specific Date ----- ----- -----

Specify Requested Age ________
- --------------------------------------------------------------------------------
SECTION G - Additional Insured Rider
G1 Name of Proposed Additional Insured (If more than one additional insured,
specify details in Special
Instructions, Section O.)
(First, Middle, Last, Suffix)

- --------------------------------------------------------------------------------
G2 Relationship to proposed insured
---------------------------------------
Month Day Year
G3 Birthdate ______ _____ _____ G4 Height ___________ G5 Weight _____
G6 Show beneficiary for additional insured if different from G7 Insurance
Age (Age nearest birthday) ________
beneficiary named in Section D.
Name _____________________________ Relationship _______________
Birthdate ____________________
- --------------------------------------------------------------------------------
SECTION H - Children's Insurance Rider
Birthdate (Mo./Day/Yr.) Height Weight
H1 Child
-----------------------------------------------------------------------
H2 Child
-----------------------------------------------------------------------
H3 Child
-----------------------------------------------------------------------
H4 Child
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION I - Premium Information
I1 Premium Mode (If no option selected, premium I2 Payment Method
mode will be quarterly)
[ ] Annual [ ] Direct Bill (not available for monthly)
[ ] Quarterly [ ] Single Premium
[ ] Semi-Annual [ ] List Bill Existing List Bill Number __________
[ ] Monthly (only [ ] Authorized Withdrawal (Complete Authorized
available for Withdrawal/EFT Form)
List Bill and
Authorized
Withdrawal/EFT)

I3 Premium collected with application NOTE: The agent is not authorized to
collect any premium (including Authorized Withdrawal/EFT Form) before
delivering a policy unless the Biding Limited Life Insurance Coverage form
has been completed and signed by the agent, applicant and proposed insured
and a copy given to the applicant. There is no coverage before delivery of
the policy except as provided by that form.
Yes No
[ ] [ ] a. Has agent collected any premium (including any Authorized
Withdrawal/EFT Form) with this application? If yes, total
premium (including any pour-in) collected
$_____________________

[ ] [ ] b. If answer to (a) is "Yes", has agent complied with the Binding
Limited Life Insurance Coverage requirements?

[ ] [ ] c. Has the applicant signed and received a Binding Limited Life
Insurance Coverage form in connection with this application?
Attach signed copy of Binding Limited Life Insurance
Coverage form.

I4 Initial Premium Allocation. Please allocate your Initial Premium to the
Guaranteed Interest Account and/or among the Variable Account Subaccounts.
Please use whole number percentages. The total must equal 100%.

GUARANTEED INTEREST ACCOUNT __________%

VARIABLE ACCOUNT SUBACCOUNTS
----------------------------
Fidelity Alger Janus
_____% Asset Manager _____% Growth _____% Aggressive Growth
_____% Contrafund _____% Leveraged AllCap _____% Balanced
_____% Equity-Income _____% MidCap Growth _____% Growth
_____% Growth _____% Small Capitalization _____% International Growth
_____% High Income _____% Short-Term Bond
_____% Index 500 INVESCO _____% Worldwide Growth
_____% Investment Grade Bond
_____% Money Market _____% Industrial Income
_____% Overseas _____% Utilities
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION J - Fund Transfers Check each option you wish to select.

J1 [ ] Dollar Cost Averaging
Please transfer $_____________ from (check one only) my
[ ] Fidelity Money Market Subaccount
[ ] Janus Short-Term Bond Subaccount

into the Subaccounts selected below. (Note: Please use whole number
percentages for each Subaccounts selected.) You must allocate a minimum of
1% to each Subaccount in which you elect to invest. The total must equal
100%.

Fidelity Alger Janus
_____% Asset Manager _____% Growth _____% Aggressive Growth
_____% Contrafund _____% Leveraged AllCap _____% Balanced
_____% Equity-Income _____% MidCap Growth _____% Growth
_____% Growth _____% Small Capitalization _____% International Growth
_____% High Income _____% Short-Term Bond
_____% Index 500 INVESCO _____% Worldwide Growth
_____% Investment Grade
Bond
_____% Money Market _____% Industrial Income
_____% Overseas _____% Utilities

J2 Automatic Rebalancing
[ ] Automatic Rebalancing
Note: If you elect this feature, each quarter we will transfer amounts among
the Subaccounts and the Guaranteed Interest Account so that the percentages
of your unborrowed Account Value in the Guaranteed Interest Account and in
each Subaccount match your most recent premium allocation. To qualify for
this feature you must allocate your premium to at least five Subaccounts (or
four Subaccounts and the Guaranteed Interest Account) with no more than 35%
of the premium allocated to the Guaranteed Interest Account or to any one
Subaccount.

J3 Telephone Transfer, Partial Withdrawal and Loan Authorization
[ ] Telephone Authorization (Check if you wish to select this option.)
I/We hereby authorize and direct the Customer Service Center of Southland
Life Insurance Company to accept telephone instructions from either the
Owner or ______________________________ (insert name of your Registered
Representative if you wish the representative to have telephone transfer
authority) to reallocate my Accumulation Value among the Guaranteed Interest
Account and Subaccounts available or request a policy loan or partial
withdrawal. I/We agree to hold harmless and indemnify Southland Life for any
losses arising from such instructions. I/We further authorize Southland Life
and its Customer Service Center to record telephone conversations with
me/us. (Initials of Owner _____)
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION K - Personal Information

K1 List life insurance policies on all persons proposed for coverage (1) now in
force or (2) applied for within the last 12 months, or (3) pending now. If
NONE, Check this box [ ]
<TABLE>
<CAPTION>
Name of Year A.D. Business or Indicate if in force
Proposed Insured Company Issued Amount Amount Personal Applied for or Pending
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
Yes No
K2 Has any proposed insured ever been declined for insurance (or
reinstatement) or been offered insurance with restricted benefits
or at other than standard rates? (Do Not Answer This Question if
You Reside in Missouri.) (If "Yes" give details in Section K-12) [ ] [ ]
K3 Is this insurance to replace, or will it cause any change in, any
insurance or annuity on any person proposed for coverage? (If
"Yes" submit a completed replacement form with this application.) [ ] [ ]
K4 a. Is this insurance intended to be a tax free exchange -
1035 Exchange? [ ] [ ]
b. If "Yes" will any policy loan be carried over? [ ] [ ]
K5 Has any person proposed for coverage:
a. ever smoked cigarettes? (If "Yes", give name and details in
section K-12) [ ] [ ]
b. ever used tobacco in any form other than cigarettes? (If
"Yes" give name and details in Section K-12) [ ] [ ]
c. ever stopped smoking cigarettes? (If "Yes" give name
and date last smoked in Section K12) [ ] [ ]
d. ever stopped using tobacco in any form other than
cigarettes? (If "Yes" give name, type and date last used in
section K-12) [ ] [ ]
K6 Within the last 3 years or within the next 12 months, has any
person proposed for coverage:
a. flown (or planned to fly) other than as a passenger on a
regularly scheduled airline?
(If "Yes" complete Aviation Supplement.) [ ] [ ]
b. had a driver's license denied, revoked, or suspended; had
three or more moving violations; been convicted of an
alcohol or drug related driving offense; been involved in
two or more auto accidents? (If "Yes" give details in Section
K-12) [ ] [ ]
c. participated in (or intend to participate in) vehicle racing
(on land or water), ballooning, bobsledding, hang gliding,
ultralight aviation, horse racing, mountaineering, rodeo,
scuba/skin diving, skydiving/parachuting, or bungee cord
jumping? (If "Yes" complete Avocation Supplement) [ ] [ ]
K7 List Driver's License No. here _____________________________
State ___________________
K8 Does any person proposed for coverage contemplate traveling or
residing outside the U.S.A. or Canada within the next 12 months?
(If "Yes" give details in Section K-12.) [ ] [ ]
K9 Has any person proposed for coverage been convicted of a felony
within the last 5 years? [ ] [ ]
(If "Yes" give details in Section K-12.)
K10 Has any person proposed for coverage:
a. ever had, or now have, any type of heart disease, cancer,
leukemia, or malignant tumor?
(If "Yes" give details in Section K-12.) [ ] [ ]
b. ever been diagnosed by a licensed member of the medical
profession as having Acquired Immune Deficiency Syndrome
(AIDS) or any immune deficiency or disorder? (Do Not
Answer This Question if You Reside In Nevada.)
(If "Yes" give details in Section K-12.) [ ] [ ]
K11 Does any person proposed for coverage now participate in
any regular physical exercise program? [ ] [ ]
K12 Details of "YES" Answers to Questions K-2 through K-11
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------
SECTION L - Medical Exam Certificate (Complete when submitting medical
examination of another insurance company.)
L1 The attached examination is on the life of:
_____________________________________________________________
L2 Name of insurance company for which examination was made and date of
examination:
Company Date of Examination
_______________________________________________________________________________
Yes No
L3 To the best of the proposed insured's knowledge and belief,
are the statements in the examination true as of today?
(If "No", explain in Section L5) [ ] [ ]
L4 Has the proposed insured consulted a doctor or other
practitioner or received medical or surgical advice since
the date of the examination? (If "Yes", explain in
Section L5) [ ] [ ]
L5 Remarks to No. L3 and L4

________________________________________________________________________

- -------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION M - Financial Information (Must be completed where the face amount
exceeds (1) $200,000 for business insurance, (2) $300,000 for an insured 65
and under, or (3) $100,000 for an insured over 65.)
M1 What is the purpose of the insurance applied for?__________________________
If the insurance applied for is personal, what is the proposed insured's:
Annual Earned Income $______________ Total Assets $_________________
Annual Interest
& Other Income $______________ Total Liabilities $_________________
Total Net Worth $_________________

M1&2 If Business Insurance: Last Year
a. Annual net profit (before taxes, past two years) $_______________
2 Years Ago
$_______________
b. Business reason for insurance (check at least one box and furnish details)
[ ] Key Person [ ] Stock Redemption/Buy and Sell [ ] Other
________________________________________
c. If Key Person insurance:
Yes No
(1) Are all partners or key people to be covered? [ ] [ ]
If "No", explain)
_____________________________________________________
_____________________________________________________
(2) Does proposed insured have an ownership interest in
the business [ ] [ ]
If "Yes", what is proposed insured's percent of
ownership? _________%
(3) What is the proposed insured's annual income?
$____________________________
d. If to fund stock redemption, is there a written
agreement? [ ] [ ]
(1) What is the book value of the business?
$___________________________________
(2) What is the market value of the business
$___________________________________
(3) How was the value determined? _______________________
Yes No
M3 Is this insurance to guarantee a loan? [ ] [ ]
a. If "Yes", is the lender requiring this insurance? [ ] [ ]
b. Is the loan finalized? [ ] [ ]
c. What is the term of the loan? (Months) _______________
d. Name of lender: _______________________________________
e. Amount of loan: _______________________________________
f. Purpose of loan: ______________________________________
g. Are others being insured for the same purpose? [ ] [ ]
If "Yes", who and for what amount:
___________________________________ Amount $__________
___________________________________ Amount $__________
M4 Additional remarks about purpose of the insurance and how the amount of
insurance was determined.
Remarks to Section M
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION N - Suitability
a. Have you the Proposed Insured and the Owner, if other than the Proposed
Insured, received a current Prospectus for the policy applied for and for
each designated fund? [ ] Yes [ ] No
b. Do you understand that under the policy applied for the amount or duration
of the death benefit may vary under specified conditions; policy values
may increase or decrease in accordance with the investment experience of
our Separate Account and may increase in accordance with the interest
credited in the Guaranteed Interest Account; and the amount payable at the
Final Policy Date is not guaranteed but is dependent on the amount then in
the Policy Account? [ ] Yes [ ] No
c. Do you understand that any personalized illustrations received are based
on hypothetical interest assumptions which may not be indicative of actual
future investment experience of our Separate Account or of actual interest
credited in our Guaranteed Interest Account? [ ] Yes [ ] No
d. With this in mind, is the policy in accord with your insurance objectives
and your anticipated financial needs? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
SECTION O -- Special Instructions

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
Please Print All Information Using Dark Ink
Part II must be completed for each person proposed for coverage unless the
person is medically examined.
- --------------------------------------------------------------------------------
SECTION A -- Personal Physicians
A1 For each person proposed for coverage, give the name and address of the
personal physicians and the date and reason the physician was last seen.
If NONE, check here [ ]
Proposed Insured's Name and Address Date and Reason
Name of Physician Last Seen
_______________________________________________________________________________
________________________________________________
________________________________________________
________________________________________________
_______________________________________________________________________________
________________________________________________
________________________________________________
________________________________________________
_______________________________________________________________________________
________________________________________________
________________________________________________
________________________________________________
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
SECTION B -- Medical Information (Complete for each person proposed for
coverage.) (For all of Section B, circle each specific condition and give
details to all "Yes" answers in the Details Section following question B-11.
Give name of disease, symptoms, etc; the date of onset; the duration; number
of attacks; and name and addresses of medical professional or hospital
providing services.)
B1 Has any person proposed for coverage ever been treated for,
or been told, by a member of the medical profession that
the person has: Yes No
a. pain, pressure, or discomfort in the chest or arms,
high blood pressure, heart murmur, irregular heartbeat,
or any other disease or disorder of the heart? [ ] [ ]
b. anemia, leukemia, or any other disorder of the blood,
veins or arteries? [ ] [ ]
c. asthma, bronchitis, pneumonia, tuberculosis, emphysema,
shortness of breath, chronic cough, or any other
disorder of the lungs or respiratory system? [ ] [ ]
d. mental or emotional disorder, nervous breakdown,
epilepsy, convulsions, chronic fatigue, fainting spells,
paralysis, stroke, or any other disorder of the brain or
nervous system? [ ] [ ]
e. significant weight loss, ulcer, colitis, diverticulitis,
hepatitis, cirrhosis, persistent diarrhea, or other
disease of the liver, gall bladder, pancreas, stomach
or intestines? [ ] [ ]
f. diabetes, thyroid, recurrent enlarged glands, or
other glandular disease or disorder? [ ] [ ]
g. arthritis, gout, or any bone, joint, muscle, or skin
disorder? [ ] [ ]
h. polyp, tumor, or cancer? [ ] [ ]
i. disorder of the urinary tract or kidneys, urethritis,
cystitis, sugar, albumin, or blood in the urine? [ ] [ ]
j. prostate or testicular disease, venereal disease,
herpes, or disease of the uterus, ovaries or breasts? [ ] [ ]
k. any disorder of the eyes, ears, nose, or throat? [ ] [ ]
l. any other health impairment or medically or surgically
treated condition within the last 5 years not mentioned
above? [ ] [ ]

B2 Has any person proposed for coverage ever been treated for,
or been told, by a licensed member of the medical profession
that the person has Acquired Immune Deficiency Syndrome
(AIDS) or any disorder or deficiency of the Immune System?
(Do Not Answer This Question If You Reside In Nevada.) [ ] [ ]

B3 Within the past 10 years, has any person proposed for coverage:
a. tested positive in a test to detect antibodies to the AIDS
virus (Human T-cell Lymphotrophic Virus T type III;
HTLV-III, Human Immunodeficiency Virus [HIV]?
(Do Not Answer This Question If You Reside In Connecticut
or Maine.) [ ] [ ]
b. had a blood transfusion? [ ] [ ]

B4 Within the past 5 years, has any person proposed for coverage
been a patient in or had treatment at a hospital, clinic,
sanitarium or other medical facility? [ ] [ ]

B5 Is any person proposed for coverage now under regular medical
observation by, or taking treatment from, a member of the
medical profession? [ ] [ ]

B6 Other than as stated in the answers above, has any person
proposed for coverage, within the last 5 years:
a. had a checkup or consultation with a member of the
medical profession? [ ] [ ]
b. had an electrocardiogram, x-ray, blood test or other test? [ ] [ ]
c. been advised by a member of the medical profession to
have any diagnostic test, hospitalization, or surgery
which was not completed? [ ] [ ]
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
Yes No
B7 Does any person proposed for coverage have a deformity or
an amputation? [ ] [ ]

B8 Does any person proposed for coverage now take any
medicine prescribed by a member of the medical profession? [ ] [ ]

B9 Except as legally prescribed by a physician, has any
person proposed for coverage ever used narcotics,
cocaine, marijuana, or any hallucinatory or mind altering
substances in the past 10 years? [ ] [ ]

B10 In the last 5 years, has any person proposed for coverage
received treatment for or joined an organization because
of the alcoholism or drug addiction of that person? [ ] [ ]

B11 Has any parent, brother, or sister of any person proposed
for coverage ever had cancer, diabetes, high blood
pressure, heart or kidney disease, nervous or mental
disorder, tuberculosis, or hereditary disorder? [ ] [ ]

Details of "Yes" answers to questions B-1 through B-11
Ques Name of
No. Proposed Insured Complete Details
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

_______________________________________________________________________________
SECTION C - Family History
Living Deceased
Family Member Age State of Health Age at Death/Cause
Father_________________________________________________________________________

Mother_________________________________________________________________________

Brothers_______________________________________________________________________

______________________________________________________________________________

Sisters________________________________________________________________________
______________________________________________________________________________

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
AGREEMENTS
- --------------------------------------------------------------------------------

All statements and answers in this application (which includes Part I, Part II,
and supplements and amendments) are true and complete to the best of my
knowledge and belief. I also agree that:

1. The statements and answers in this application will be relied upon and form
the basis of any insurance.

2. No information will be considered as having been given to Southland Life
unless it is written in this application. (This paragraph does not apply in the
states of Maine, Missouri, Oregon, South Carolina, and South Dakota.)

3. No agent or any other unauthorized person can make or change any insurance
contract or give up any of Southland Life's rights or requirements. Any change
must be in writing and signed by an officer of Southland Life.

4. Southland Life may amend this application by an appropriate notation in the
space designated "Home Office Corrections" in order to correct errors or
omissions or to conform the application with any policy that may be issued. The
acceptance of the policy constitutes a ratification of such amendments.

In those states, including Maryland, where change in amount, classification,
plan, premium, or benefit requires the written consent of the applicant, no
change may be ratified except by a written acceptance. We reserve the right to
make any changes required by law.

5. Insurance Under Policy Applied For - Except as may be provided in any Binding
Limited Life Insurance Coverage, no policy of insurance will be in force until
(1) the first policy premium is paid and (2) the policy is delivered while the
facts and health condition of the proposed insured(s) are as represented in this
application. When these conditions are satisfied, the policy as delivered will
then take effect.

6. Binding Limited Life Insurance Coverage - Any pre-delivery insurance coverage
is provided in the Binding Limited Life Insurance Coverage form. That coverage
is available only if: a premium is accepted by the agent; the agent has
authority to accept premium as set out in that form; and the form is completed
and signed by the agent, applicant, and proposed insured.

7. If the contract applied for is for a pension, profit-sharing, HR-10, or other
tax qualified plan, any policy issued shall not be transferable other than to
the Insurer, except as directed by the Plan Administrator. Other applicable
provisions may be added to the contract.

8. I certify, under penalty of perjury, that my social security/tax
identification number(s) is shown and is correct and that I am not subject to
backup withholding.

- --------------------------------------------------------------------------------
AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION
- --------------------------------------------------------------------------------

Southland Life Insurance Company ("Southland Life") may obtain information about
me or my minor children from any physician, medical practitioner, hospital,
clinic or other medical facility, employer, other insurance companies or
institutions, consumer reporting agency, or Medical Information Bureau, Inc.
(MIB, Inc.). The purpose is to evaluate my application for insurance or
benefits. Southland Life may obtain an investigative consumer report and any
records or other information available as to diagnosis, treatment and prognosis
of any physical or mental condition.

Southland Life may obtain any drug, physician and mental health, and alcohol-
related information which may be protected by Federal or State laws and
regulations. As it pertains to alcohol and drug information covered by Federal
regulation, this authorization may be revoked at any time by written notice to
Southland Life, but any action taken before my written revocation is received by
Southland Life will not be affected.

Southland Life may make a brief report about me or my children to MIB, Inc.
Southland Life may disclose information to its reinsurers, those who perform
services for Southland Life on my application for insurance or benefits, or
those companies to which I have applied or may apply for life or health
insurance or benefits. Disclosure may be made when required or permitted by law.

This is valid for two and one-half years from the date below. An original or
copy may be used by Southland Life or its authorized representatives to obtain
information. I have read and received a copy of this authorization. I also have
a copy of the Notice of Information Procedures. It includes the MIB, Inc. and
Fair Credit Reporting Notices.
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
NOTICE: Any person who knowingly and with intent to injure, defraud, or deceive
any insurance company, files an application, statement or claim containing any
false, incomplete, or misleading information is guilty of insurance fraud.

Signature of
Proposed Insured _______________________________________________________
Date _________________________
(If below age 15, signature of parent or guardian)

Signed at City ___________________________________________________
State ______________________________

Signature of
Spouse/_______________________________________________________________________

Additional Insured(s) (if proposed for coverage)

___________________________________________________________

Owner Signature (if other than proposed insured)

_________________________________________________________

OR (if applicable) Corporate Owner Signature

___________________________________________________________
(If a firm or corporation is to be owner, the signature and title of an
officer other than the proposed insured is required.)
Except for any medical exam form, I certify that I have asked and recorded
completely and accurately the answers to all questions on this application. I
know of nothing else affecting the risk.

Signature of Agent/Registered Rep. _____________________________
Reg. Rep. Number _____________

__________________________________________ ___________________________________
Name of Broker/Dealer/Branch Address of
Broker/Dealer/Branch
- --------------------------------------------------------------------------------
HOME OFFICE
CORRECTIONS
(FOR HOME OFFICE
USE ONLY)
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------

Agent's Report
(Must be completed and signed for every application)
- --------------------------------------------------------------------------------

1. In what state was the application taken? ___________
Yes No
2. Do you have knowledge or reason to believe that
replacement of existing insurance or annuity may
be involved? [ ] [ ]
3. How long have you known the proposed insured?
________ years
Are you related? [ ] [ ]
If so, how? ________________________
4. Does the proposed insured speak English? [ ] [ ]
Was the application interpreted for and
understood by the proposed insured? [ ] [ ]
Are all persons proposed for coverage
U.S. citizens? [ ] [ ]
If not, how long in U.S.? _______Mos. ________Yrs.

5. Did proposed insured approach you for this insurance [ ] [ ]
6. What is the amount of insurance in force on the spouse
of the proposed insured? $_____________________
7. If any proposed insured is a minor, what is the amount
of insurance on:
Father $__________ Mother $___________
Brothers $__________ Sisters $___________
8. Will the applicant accept this policy if it is a
"Modified Endowment" at issue? [ ] [ ]
9. If a medical exam is required, has it been ordered? [ ] [ ]
10. What is the source of the first premium payment?
[ ] Applicant check
[ ] Other (specify): __________________
- --------------------------------------------------------------------------------
11. Print interest of all agents:
Agent Name _________________________________________
Agent No. __________________ % __________
Agent Name _________________________________________
Agent No. __________________ % __________
Agent Name _________________________________________
Agent No. __________________ % __________
Agent (Sign)_________________________________________ No. ____________
Date ___________________
- --------------------------------------------------------------------------------
12. General Agent (Print) ___________________________________________________
__________________________ Agent Number

General Agent (Sign) ______________________________________________________
Date _______________
- --------------------------------------------------------------------------------
13. What was the PRIMARY purpose of the insurance?
<TABLE>
<S> <C> <C> <C>
PERSONAL PLANNING E [ ] Gift/Charitable BUSINESS PLANNING M [ ] Buy-Sell
A [ ] Estate/Death Tax F [ ] Retirement Maximizer J [ ] Executive Bonus N [ ] Key Executive
B [ ] Family Protection G [ ] IRP/PPP/PRO K [ ] Qualified Plan O [ ] Employee Benefit
C [ ] Mortgage Protection H [ ] Savings L [ ] Deferred P [ ] Other _________
D [ ] College Funding I [ ] Other ______________ Compensation
</TABLE>
- --------------------------------------------------------------------------------
14. Who was the PRIMARY decision-maker involved?
<TABLE>
<S> <C> <C> <C>
PERSONAL PLANNING D [ ] Grandparent BUSINESS PLANNING J [ ] Board of
A [ ] Insured E [ ] Child(ren) G [ ] Business Owner Directors
B [ ] Insured and Spouse F [ ] Other_____________ H [ ] Attorney K [ ] Trustee
C [ ] Parent I [ ] Accountant L [ ] Other _________
</TABLE>
- --------------------------------------------------------------------------------
15. Did the Home Office or Regional Staff assist you? [ ] Yes [ ] No
(If yes, check all that apply)
<TABLE>
<S> <C> <C> <C>
A [ ] Illustration D [ ] Template design G [ ] Family Asset Review J [ ] Other__________
B [ ] Case design E [ ] Estate Analysis H [ ] Competition Services
C [ ] Sample Documents F [ ] Business Analysis I [ ] Legal Consultation
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>

(Detach and give to Applicant)
AGREEMENTS
- --------------------------------------------------------------------------------
All statements and answers in this application (which includes Part I, Part II,
and supplements and amendments) are true and complete to the best of my
knowledge and belief. I also agree that:
1. The statements and answers in this application will be relied upon and form
the basis of any insurance.
2. No information will be considered as having been given to Southland Life
unless it is written in this application. (This paragraph does not apply in
the states of Maine, Missouri, Oregon, South Carolina, and South Dakota.)
3. No agent or any other unauthorized person can make or change any insurance
contract or give up any of Southland Life's rights or requirements. Any
change must be in writing and signed by an officer of Southland Life.
4. Southland Life may amend this application by an appropriate notation in the
space designated "Home Office Corrections" in order to correct errors or
omissions or to conform the application with any policy that may be issued.
The acceptance of the policy constitutes a ratification of such amendments.
In those states, including Maryland, where change in amount, classification,
plan, premium, or benefit requires the written consent of the applicant, no
change may be ratified except by a written acceptance. We reserve the right
to make any changes required by law.
5. Insurance Under Policy applied For - Except as may be provided in any
Binding Limited Life Insurance Coverage, no policy of insurance will be in
force until (1) the first policy premium is paid and (2) the policy is
delivered while the facts and health condition of the proposed insured(s)
are as represented in this application. When these conditions are satisfied,
the policy as delivered will then take effect.
6. Binding Limited Life Insurance Coverage - Any pre-delivery insurance
coverage is provided in the Binding Limited Life Insurance Coverage form.
That coverage is available only if a premium is accepted by the agent, the
agent has authority to accept premium as set out in that form, and the form
is completed and signed by the agent, applicant, and proposed insured.
7. If the contract applied for is for a pension, profit-sharing, HR-10, or
other tax qualified plan, any policy issued shall not be transferable other
than to the Insurer, except as directed by the Plan Administrator. Other
applicable provisions may be added to the contract.
8. I certify, under penalty of perjury, that my social security/tax
identification number(s) is shown and is correct and that I am not subject
to backup withholding.
- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
NOTICE OF INFORMATION PROCEDURES
- --------------------------------------------------------------------------------

OUR UNDERWRITING PROCESS
This process is an evaluation of information about you. It is to see if you
qualify for the insurance requested. The information we review may vary with the
insurance applied for. We look at information about you such as: your age;
occupation; health; mode of living; avocation; and other personal information.

Answers on the application are the principal source of information. We may
contact other people or institutions personally, by phone, or by letter. The
purpose is to confirm or add to information you have provided. For example, we
may obtain information from your doctor, clinic, hospital, or other insurers. In
some cases, your Southland Life agent may obtain information on our behalf. A
medical examination or laboratory tests may be requested.

NOTICE
Any person who knowingly and with intent to injure, defraud, or deceive any
insurance company, files an application, statement or claim containing any
false, incomplete, or misleading information is guilty of insurance fraud.

MIB, INC.
Medical Information Bureau, Inc. ("MIB, Inc.") may provide Southland Life with a
brief report about you. This is a nonprofit organization of life insurance
companies which has an information exchange for its members. Information that is
sent to MIB, Inc. by one member may be given to their member companies who have
a business need for it.

Upon your written request, MIB, Inc. will arrange for disclosure of any
information it may have in your file. If you question the accuracy of MIB's
information, you may request a correction according to the procedures in the
Federal Fair Credit Reporting Act. MIB's address is: P. O. Box 105, Essex
Station, Boston, Massachusetts 02112, telephone 617-426-3660.

CONSUMER REPORTS
In some cases, a Southland Life representative may prepare a consumer report or
investigative consumer report about you, or Southland Life may ask an
independent agency to prepare a consumer report or an investigative consumer
report about you. These reports may include information on your character,
general reputation, personal characteristics such as health, finances, and job,
and mode of living except as may be related directly or indirectly to your
sexual orientation. Any information obtained by the agency may be kept in its
file and later given to others who have a business need for it. If an
investigative consumer report is ordered by Southland Life, the report will
include information obtained through interviews with your neighbors, friends, or
others you know. You may request a personal interview. The agency will make a
reasonable attempt to talk to you. It will include that information in its
report. The Federal Fair Credit Reporting Act gives you the right to make a
written request within a reasonable period of time, to receive additional
information from Southland Life about the nature and scope of an investigation,
if one is made. We will provide the name, address, and phone number of any
agency we ask to prepare such a report. You may contact the agency directly to
learn about the contents of the report.

DISCLOSURE OF INFORMATION
Information we obtain about you is confidential. As permitted by law, we may
disclose information without further authorization to others such as: consumer
reporting agencies hired to prepare investigative reports; insurance companies
to which you have applied for coverage or benefits; those providing services for
us; those conducting bona fide actuarial, marketing, or scientific studies or
audits; and your attending doctor.

Upon written request, we will give you more information about these procedures.

YOUR RIGHT TO REVIEW INFORMATION
These are procedures by which you can make a written request to review personal
information in our policy file. However, Southland Life will not disclose
information to you that was prepared for any anticipated claim or any civil or
criminal proceeding. We also have procedures by which you may request
correction, amendment, or deletion of any information in our files which you
believe to be inaccurate or irrelevant. Upon written request, we will provide
you with further information about these procedures.

We hope this notice helps explain our underwriting process. If you have any
additional questions, discuss them with your agent or contact us directly.

Southland Life Insurance Company
Customer Service Center
P. O. Box 173789
Denver, CO 80217-3789
1-800-224-3035
- --------------------------------------------------------------------------------

<PAGE>

EXHIBIT 1.A.11

May 10, 1996

DESCRIPTION OF ISSUANCE,
TRANSFER AND REDEMPTION PROCEDURES
PURSUANT TO RULE 6E-3(T)(B)(12)(III)
FOR FLEXIBLE PREMIUM ADJUSTABLE COMBINATION FIXED
AND VARIABLE LIFE INSURANCE POLICIES
ISSUED BY
SOUTHLAND LIFE INSURANCE COMPANY

This document sets forth the administrative procedures that will be
followed by Southland Life Insurance Company (the "Company") in connection with
the issuance of its flexible premium adjustable combination fixed and variable
life insurance policy ("Policy" or "Policies"), the transfer of assets held
thereunder, and the redemption by Policy owners ("Owners") of their interests in
those Policies. Capitalized terms used herein have the same definition as in
the prospectus for the Policy that is included in the current registration
statement on Form S-6 for the Policy (File No. 33-97852) as filed with the
Securities and Exchange Commission ("Commission" or "SEC").

I. PROCEDURES RELATING TO PURCHASE AND ISSUANCE OF THE POLICIES AND ACCEPTANCE
---------------------------------------------------------------------------
OF PREMIUMS
-----------

A. OFFER OF THE POLICIES, APPLICATION, INITIAL PREMIUMS, AND ISSUANCE
------------------------------------------------------------------

1. Offer of the Policies. The Policies are offered and sold for
---------------------
premiums pursuant to underwriting standards in accordance with state insurance
laws. Premiums for the Policies and related insurance charges are not the same
for all Owners selecting the same Stated Death Benefit. Insurance is based on
the principle of pooling and distribution of mortality risks, which assumes that
each Owner pays a premium and related insurance charges commensurate with the
Insured's mortality risk as actuarially determined utilizing factors such as
Age, sex, and risk class of the Insured. Uniform premium and insurance charges
for all Insureds would discriminate unfairly in favor of those Insureds
representing greater risk. Although there is no uniform insurance charge for
all Insureds, there is a uniform insurance rate for all Insureds of the same
rate class. Appendix A to this memorandum describes the monthly deductions
under the Policy, which include initial Policy charges, monthly administrative
charges, cost of insurance charges, and supplemental benefit charges.

2. Application. Persons wishing to purchase a Policy must complete an
-----------
application and submit it to the Company through an authorized agent. The appli-
cation must specify the Insured and provide certain required information about
<PAGE>

the Insured. The application also must specify a premium payment plan, which is
level premiums at specified intervals, e.g., monthly, quarterly, semi-annually,
or annually, designate net premium allocation percentages, and select the
initial Stated Death Benefit. An Owner may arrange with the Company to pay
planned premiums by pre-authorized checking account deductions. An application
will not be deemed to be complete unless all required information, including
without limitation Age, sex, and medical and other background information for
the Insured, has been provided in the application.

3. Minimum Initial Premium. An applicant must pay a minimum initial
-----------------------
premium which, if not submitted with the application or during the underwriting
period, must be submitted when the Policy is delivered. Policy coverage does not
become effective until the initial premium is received in good order at the
Company's Customer Service Center. The Company may specify the form in which a
premium payment must be made in order for the premium to be in "good order."
Ordinarily, a check will be deemed to be in good order upon receipt, although
the Company may require that the check first be converted into federal funds. In
addition, for a premium to be received in good order, it must be accompanied by
all required supporting documentation, in whatever form required.

The minimum initial premium depends on a number of factors, such as
the Insured's Age, sex, and risk class, the requested Stated Death Benefit, any
supplemental benefits, and the planned premiums the applicant proposes to make.
The initial premium is at least equal to two No-Lapse Premiums for a Policy
covering the proposed Insured for the requested Stated Death Benefit. The No-
Lapse Premium is a benchmark monthly premium used to determine the No-Lapse
Guarantee. The No-Lapse Guarantee is used for purposes of determining whether,
during the first three Policy Years, regardless of the sufficiency of the Cash
Surrender Value under certain circumstances, the Policy will not lapse. It is
based in part on the sex, Age, and risk class of the Insured, the requested
Stated Death Benefit, and any supplemental benefits.

4. Minimum Stated Death Benefit. The minimum initial Stated Death
-----------------------------
Benefit for which the Company will issue a Policy is $100,000.

5. Receipt of Application and Underwriting. Upon receipt of a completed
---------------------------------------
application in good order from an applicant, the Company will follow certain
insurance underwriting procedures designed to determine whether the proposed
Insured is insurable. This process may involve such verification procedures as

-2-
<PAGE>

medical examinations and may require that further information be provided about
the proposed Insured before a determination can be made.

The underwriting process determines the rate class to which the
Insured is assigned. This original rate class applies to the initial Stated
Death Benefit. The rate class may change upon an increase in Stated Death
Benefit.

The Company also will determine whether the proposed planned premium
schedule will be sufficient to cover the charges to be imposed under the Policy.

A Policy cannot be issued until the initial underwriting procedure has
been completed. The Policy Date is the date on which coverage becomes
effective. It is the date by which all of the following have occurred: the
application has been accepted; the minimum initial premium has been received;
and the Company has generated a printed Policy that is delivered to an Owner
while the Insured is alive and before any change in health as shown in the
application.

The Company reserves the right to reject an application for any reason
permitted by law. If an application is rejected, any premium received will be
returned, without interest.

6. Acceptance of Application and Policy Date. If an application is
-----------------------------------------
accepted, premium is received, and the Policy is delivered, insurance coverage
under the Policy is effective as of the Policy Date, which is set forth in the
Policy. The Policy Date is used to determine Policy Years and Monthly Processing
Dates, as well as to measure suicide and contestability periods.

B. ADDITIONAL PREMIUMS
-------------------

1. Additional Premiums Permitted. Additional, unscheduled premiums
-----------------------------
may be paid in any amount, and at any time, subject to the following limits:

. A premium must be at least $100 and must be sent to the Customer
Service Center. The Company may require satisfactory evidence of insurability
before accepting any premium that would result in an increase in the difference
between the Accumulation Value and the Death Benefit.

. The Company may limit total premiums paid in a Policy Year to the
planned premiums selected.

-3-
<PAGE>

. Total premiums paid in a Policy Year also may not exceed guideline
premium limitations for life insurance set forth in the Internal Revenue Code.

. No premium will be accepted after the Maturity Date.

. The Company will monitor Policies and will attempt to notify an
Owner on a timely basis if the Owner's Policy is in jeopardy of becoming a
modified endowment contract under the Internal Revenue Code.

. A payment submitted when a Policy loan is outstanding will be
treated as a loan repayment unless the Owner specifies otherwise.

2. Refund of Excess Premium Amounts. If at any time a premium is paid
--------------------------------
that would result in total premiums exceeding limits established by law to
qualify a Policy as a life insurance policy, the Company will only accept that
portion of the premium that would make total premiums equal the maximum amount
that may be paid under the Policy. The excess premium will be refunded plus any
gain attributable to the excess premium.

3. Planned Premiums. At the time of application, each Owner will select a
----------------
plan for paying level premiums at specified intervals, based on a periodic
billing mode of monthly, quarterly, semi-annual, or annual payments. The Company
will send reminder notices for planned premiums, unless an Owner arranges to pay
planned premiums by pre-authorized checking account deductions. The Owner may
change the planned premium frequency and amount by sending a Written Request to
the Customer Service Center. Any such change will be subject to the premium
limits discussed above.

4. Crediting Premiums
------------------

a. Initial Premium. The initial premium net of any sales and tax
---------------
charges will be credited to the Policy as of the Policy Date. If the initial
premium is submitted with the application or before the Policy is issued, the
premium will be allocated to the Money Market Subaccount (defined below) until
the Policy becomes effective. At that time, the Accumulation value in the Money
Market Subaccount will be credited to the Subaccounts or the Guaranteed Interest
Account, as specified in the application.

b. Premiums Not Requiring Additional Underwriting. Planned premiums
----------------------------------------------
and unplanned premiums not requiring additional underwriting will be credited to

-4-
<PAGE>

the Policy and the resulting Net Premiums will be invested as requested on the
Valuation Day that the premium is received by the Customer Service Center.

c. Premiums Requiring Additional Underwriting. Any premium requiring
------------------------------------------
additional underwriting will be allocated to the Money Market Subaccount
(defined below) until underwriting has been completed and the premium has been
accepted. When accepted, the Accumulation Value in the Money Market Subaccount
attributable to the resulting Net Premium will be credited to the Policy and
allocated to the Subaccounts and/or Guaranteed Interest Account as requested.
If an additional premium is rejected, the Company will return the premium,
without any adjustment for investment experience.

C. OVERPAYMENTS AND UNDERPAYMENTS In accordance with industry practice, the
------------------------------
Company will establish procedures to handle errors in initial and additional
premium payments to refund overpayments and collect underpayments, except for
de minimis amounts (amounts under $5.00).
- -- -------

D. PREMIUMS UPON INCREASE IN STATED DEATH BENEFIT, PREMIUMS DURING A GRACE
-----------------------------------------------------------------------
PERIOD, AND PREMIUMS UPON REINSTATEMENT
---------------------------------------

1. Premiums Upon Increase in Stated Death Benefit. Generally, no
----------------------------------------------
premium is required for an increase in Stated Death Benefit. However, depending
on the Accumulation Value at the time of an increase in the Stated Death Benefit
and the amount of the increase requested, an additional premium or change in the
amount of planned premiums may be advisable. The Company will notify the Owner
if a premium is necessary or a change appropriate.

2. Premiums During a Grace Period. If the Cash Surrender Value on a
------------------------------
Monthly Processing Date is less than the amount of the monthly deduction to be
deducted on that date, and the Three-Year Guarantee (described below) is not in
effect, the Policy will be in default and a grace period will begin. During the
Three-Year Guarantee, the Policy will remain in force during the first three
Policy Years, regardless of the sufficiency of the Cash Surrender Value, if the
total premiums paid less any withdrawals is greater than or equal to the No-
Lapse Premium multiplied by the number of months the Policy has been in force.

. The grace period is a 61-day period that is measured from the date
on which a grace period notice is sent by the Company. The Policy does not
lapse, and the insurance coverage continues, until the expiration of this grace
period.

-5-
<PAGE>

. In order to prevent lapse, the Owner must, during the grace period,
make a premium payment sufficient to cover the monthly deduction. The amount
required to be paid will be identified in the grace period notice.

. Failure to make a sufficient payment within the grace period will
result in lapse of the Policy without value or benefits payable.

3. Premiums Upon Reinstatement. A Policy that lapses without value may be
---------------------------
reinstated at any time within five years of the beginning of the grace period
(or longer period required in a particular state after the beginning of the
grace period) by submitting: evidence of the Insured's insurability satisfactory
to the Company; payment of any minimum monthly premiums due and unpaid during
the last five Policy Years plus, if reinstatement is later, a sum sufficient to
keep the Policy in force for two months; and repayment or the continuance of any
Policy loan that existed when coverage ended, with any loan interest. The
effective date of the reinstatement will be the date of the Company's approval.

. Upon reinstatement, the Accumulation Value will be the Accumulation
Value at the date of lapse, plus any payments on reinstatement, minus the
difference in surrender charges as of the lapse date and as of the reinstatement
date based on the table of surrender charges.

E. ALLOCATIONS OF NET PREMIUMS AMONG THE ACCOUNTS
----------------------------------------------

1. The Variable Account and Guaranteed Interest Account. An Owner may
----------------------------------------------------
allocate Net Premiums to one or more of the Subaccounts of Southland Separate
Account L1 (the "Variable Account"). The Variable Account currently consists of
21 Subaccounts, the assets of which are used to purchase shares of a designated
corresponding mutual fund Portfolio that is part of one of the following mutual
funds: the Alger American Fund, Fidelity Variable Insurance Products Fund,
Fidelity Variable Insurance Products Fund II, Janus Aspen Series, and INVESCO
Variable Investment Funds, Inc. Each mutual fund is registered under the
Investment Company Act of 1940 as an open-end management investment company.
Additional Subaccounts may be added from time to time to invest in any of the
Portfolios of the above-referenced mutual funds or any other investment company.
Owners also may allocate Net Premiums to the Guaranteed Interest Account, which
guarantees a minimum fixed rate of interest.

2. Allocations Among the Accounts. Net Premiums and Accumulation
------------------------------
Value are allocated to the Subaccounts and the Guaranteed Interest Account in
accordance with the following procedures.

-6-
<PAGE>

a. General. The Net Premium equals the premium paid less any sales
-------
and tax charges. In the application for the Policy, the Owner will indicate how
Net Premiums should be allocated among the Subaccounts of the Variable Account
and/or the Guaranteed Interest Account. Such allocations may be changed at any
time by the Owner by Written Notice to the Customer Service Center. The
percentage of each Net Premium that may be allocated to any Subaccount or the
Guaranteed Interest Account must be a whole number not less than 5%, and the sum
of the allocation percentages must be 100%.

b. Net Premiums. Any portion of the initial Net Premium allocated to
------------
a Subaccount will be invested in the Fidelity Variable Insurance Products Fund
Money Market Portfolio (the "Money Market Subaccount") until the Free Look
Period expires. The Free Look Period is a period expiring at the latest of 20
days after an Owner receives a Policy, 45 days after the application is signed,
or 10 days after the Company mails or delivers a notice of withdrawal right,
during which an Owner may cancel the Policy and receive a refund of premiums
paid. At the end of the Free Look Period, the Accumulation Value in the Money
Market Subaccount is transferred to and allocated to the Subaccounts based on
the allocation percentages in the Policy application. Any Net Premium directed
to be invested in the Guaranteed Interest Account will be allocated to that
Account upon receipt by the Company.

c. Additional Premiums. Additional Net Premiums not requiring
-------------------
underwriting will be credited to the Policy and allocated to the Subaccounts or
Guaranteed Interest Account in accordance with the allocation percentages in
effect on the Valuation Day that the premium is received at the Customer Service
Center, unless other instructions by Written Notice accompany the premium, in
which case the Net Premium will be allocated in accordance with those
instructions, provided such instructions comply with the Company's allocation
rules. Premiums requiring additional underwriting will be allocated to the
Money Market Subaccount until underwriting has been completed and the premium
has been accepted. When accepted, the Accumulation Value in the Money Market
Subaccount attributable to the Net Premium will be credited to the Policy and
allocated to the Subaccounts and Guaranteed Interest Account as requested.

-7-
<PAGE>

F. LOAN REPAYMENTS AND INTEREST PAYMENTS
-------------------------------------

1. Repaying Policy Debt. The Owner may repay all or part of the
--------------------
Policy Debt at any time prior to the Maturity Date while Policy is in force and
the Insured is living. Policy Debt is equal to all outstanding Policy loans and
any accrued and unpaid interest on those loans. Loan repay ments must be sent
to the Customer Service Center and will be credited as of the date received. If
the Death Benefit becomes payable while a Policy loan is outstanding, the Policy
Debt will be deducted in calculating the Death Benefit.

2. Allocation for Repayment of Policy Loans. When a loan is repaid,
----------------------------------------
an amount equal to the repayment will be transferred from the Policy Loan
Account to the Subaccounts and the Guaranteed Interest Account and allo cated
as directed by the Owner when submitting the repayment. If no direction is
provided, the amount will be allocated in accordance with the Owner's current
Net Premium allocation percentages.

3. Interest on Policy Loan Account. The amount in the Policy Loan
-------------------------------
Account will be credited with interest at a minimum guaranteed annual rate of
4%. The interest earned will be allocated to the Subaccounts and the Guaranteed
Interest Account in the same proportion that Net Premiums are then allocated.

4. Notice of Excessive Policy Debt. If the Policy Debt exceeds the
-------------------------------
Accumulation Value less any Surrender Charges on any Valuation Day, the Policy
will be in default. The Company will send Owners and any assignee of record,
notice of the default. The notice will specify the amount that must be repaid
to prevent termination. This amount must be submitted within a 61-day grace
period to avoid termination. A Policy that terminates due to excessive Policy
Debt cannot be reinstated.

II. TRANSFERS
---------

A. TRANSFERS AMONG THE SUBACCOUNTS AND THE GUARANTEED INTEREST ACCOUNT
-------------------------------------------------------------------

After the Free Look Period, by Written Notice or telephone, the Owner
may transfer Net Accumulation Value between and among the Subaccounts of the
Variable Account and, subject to certain special rules, to and from the
Guaranteed Interest Account.

-8-
<PAGE>

In any Policy Year, the Owner may make an unlimited number of
transfers; however, the Company imposes an excess transfer charge of $25 for
each transfer in excess of 12 during any Policy Year. All transfers effected
during a single Valuation Period will be counted as one transfer for purposes of
the transfer charge. Transfers due to the operation of Dollar Cost Averaging or
Automatic Rebalancing (each described below) are not included in determining the
limit on the number of transfers allowed without an excess transfer charge.

The minimum amount that may be transferred from each Subaccount or the
Guaranteed Interest Account is $100 or the balance in the Subaccount or the
Guaranteed Interest Account, if less. The minimum amount that can remain in a
Subaccount or the Guaranteed Interest Account following a transfer is $100. Any
amount below $100 must be included in the amount transferred. If a transfer
request does not conform to this provision the request will not be effected.

Transfers to or from the Guaranteed Interest Account are permitted
only during the first 30 days of each Policy Year, and only one such transfer
may be made in a Policy Year. The maximum transfer amount from the Guaranteed
Interest Account to the Subaccounts in any Policy Year is the greatest of: (a)
25% of the Guaranteed Interest Account Accumulation Value immediately prior to
the first transfer or Withdrawal in that Policy Year from the Guaranteed
Interest Account; (b) $100; or (c) the sum of the amounts transferred out of or
withdrawn from the Guaranteed Interest Account in the prior Policy Year.

For any class of Policies, the Company reserves the right to modify,
restrict, suspend, or eliminate the transfer privileges at any time and for any
reason.

B. DOLLAR COST AVERAGING FACILITY
------------------------------

Dollar Cost Averaging permits an Owner to systematically transfer
specified dollar amounts, on a monthly basis, from the Money Market Subaccount
to any of the other Subaccounts.

1. Election of Dollar Cost Averaging. Owners may elect Dollar Cost
---------------------------------
Averaging only if their Subaccount Accumulation Value in the Money Market
Subaccount is at least $10,000 at the time of election.

2. Operation of the Dollar Cost Averaging Facility. If Dollar Cost
-----------------------------------------------
Averaging is elected, each month on the Monthly Processing Date the amount to be
transferred will be taken from the Money Market Subaccount and transferred to
the Subaccount or Subaccounts designated to receive the funds. Once elected,

-9-
<PAGE>

Dollar Cost Averaging remains in effect for a Policy until either the Subaccount
Accumulation Value in the Subaccount from which transfers are made is depleted,
the Maturity Date occurs, or until the Owner cancels the election by Written
Notice at least seven days in advance of the next transfer date. Once each
Policy Year, an Owner may change the transfer amount or the Subaccounts to which
transfers are to be made.

The minimum transfer amount from the appropriate Subaccount for Dollar
Cost Averaging is $100 per month. The maximum transfer amount for Dollar Cost
Averaging is the Subaccount Accumulation Value in the Money Market Subaccount at
the time of election, divided by 12.

Dollar Cost Averaging transfers may be made to more than one
Subaccount, provided that the Owner designates whole number percentage
allocations of the transfer amount. If transfers to more than one Subaccount
are elected, the minimum percentage that may be transferred to any Subaccount is
5% of the total amount transferred.

There is no additional charge for using Dollar Cost Averaging.
Transfers under Dollar Cost Averaging are not included for purposes of computing
the excess transfer charge.

C. AUTOMATIC REBALANCING
---------------------

Automatic Rebalancing permits an Owner to automatically rebalance the
value in the Subaccounts on a quarterly basis, based on the Owner's premium
allocation percentages in effect at the time of the rebalancing.

1. Election of Automatic Rebalancing. Automatic Rebalancing may be
---------------------------------
elected when applying for the Policy or at a later date by completing the
Automatic Rebalancing form and returning it to the Customer Service Center.

2. Operation of Automatic Rebalancing. If Automatic Rebalancing is
----------------------------------
selected, an Owner must allocate premiums to at least five Subaccounts and must
allocate no more than 35% of premiums to any one Subaccount. As of the first
Valuation Day of each calendar quarter, the Company will transfer Accumulation
Value among the Subaccounts to the extent necessary to return the allocation to
the Owner's specifications. Automatic Rebalancing may not begin until the
Monthly Processing Date following the end of the Free Look Period. Automatic
Rebalancing will continue until the Company receives a written or telephone
termination request at the Customer Service Center.

-10-
<PAGE>

During Automatic Rebalancing, an Owner may not change the allocation
percentage to the Guaranteed Interest Account by more than 25% of the percentage
previously allocated to the Guaranteed Interest Account. If a premium
allocation is changed more than twice in a Policy Year, the Company will deduct
$25 proportionately from the Subaccount Accumulation Values and Guaranteed
Interest Account Accumulation Value as of the Valuation Day the allocation
change is effective.

D. TRANSFER ERRORS
---------------

In accordance with industry practice, the Company will establish
procedures to address and to correct errors in amounts transferred among the
Subaccounts and the Guaranteed Interest Account, except for de minimis amounts
-- -------
(amounts under $5.00).

III. "REDEMPTION" PROCEDURES: FREE LOOK RIGHTS, SURRENDERS, WITHDRAWALS, LAPSES,
---------------------------------------------------------------------------
MONTHLY DEDUCTIONS, DEATH BENEFITS, AND POLICY LOANS
----------------------------------------------------

A. "FREE LOOK" RIGHTS
------------------

1. Initial Free Look Right. The Policy provides for an initial Free
-----------------------
Look Right during which an Owner may cancel the Policy by returning it to the
Company or to an agent of the Company before the latest of: (a) 20 days after
the Owner receives the Policy; (b) 45 days after the application for the Policy
is signed; or (c) 10 days after the Company mails a notice of withdrawal right
to the Owner. Upon returning the Policy to the Customer Service Center or to an
authorized agent, the Policy will be deemed void from the beginning. Within
seven days after the Customer Service Center receives the cancellation request
and Policy, the Company will pay a refund equal to the premiums received. Upon
issuance of a Policy, the Company will send to the Owner by first class mail or
personal delivery a written document containing information comparable to that
required by Form N-27I-2: (i) notifying the Owner of the right to return the
Policy for cancellation and receive a full refund of all premiums paid; (ii)
containing, if appropriate, a statement of Policy fees and other charges and an
illustration of guideline annual premiums, death benefits, and cash surrender
values applicable to the Age, sex, and rate class of the Insured; and (iii)
providing a form of request for refund of gross premiums paid on the Policy
setting forth (a) instructions as to the manner in which a refund may be
obtained, including the address to which the request form should be mailed, and
(b) spaces necessary to indicate the date of such request, the Policy number,
and the signature of the Owner.

-11-
<PAGE>

2. Free Look Right on Increases in Stated Death Benefit. Upon an
----------------------------------------------------
increase in Stated Death Benefit, an Owner is provided with a free look right
for the increase during which he may cancel the increase. This free look right
expires after the latest of 20 days after the Owner receives a new Policy
schedule reflecting the increase, 45 days after the application for the increase
is signed, or 10 days after the Company mails or delivers a notice of withdrawal
right to the Owner. If the Owner cancels the increase, the Company will refund
to the Accumulation Value any charges deducted that are attributable to the
increase.

B. 24-MONTH RIGHT TO SURRENDER AND RECEIVE REFUND
----------------------------------------------

The Policy provides for a 24-month surrender right pursuant to which
the Cash Surrender Value payable upon surrender during this period will be
calculated based on a sales surrender charge that is capped at 26% of premiums
paid up to one Target Premium, plus 6% of premiums paid between one and two
Target premiums, plus 5% of all other premiums. Upon issuance of the Policy,
the Company will send to the Owner by first class mail or personal delivery a
written document containing information comparable to that required by Form N-
27I-1, providing notice of the right to return the Policy for cancellation at
any time within 24 months after issuance of the Policy and to receive a refund
of the Cash Surrender Value based on the "capped" sales surrender charge. Such
Cash Surrender Value will be calculated on any Valuation Day based on the Net
Accumulation Value on the Valuation Day that the Company receives the surrender
request and the amount calculated will be paid within seven days.

C. SURRENDERS
----------

1. Requests for Cash Surrender Value. At any time during the
---------------------------------
Insured's lifetime, the Owner may surrender the Policy for its Cash Surrender
Value. The Cash Surrender Value on any Valuation Day is the Accumulation Value
minus any Policy loan and accrued interest less any applicable Surrender Charge
and, if on any Valuation Day other than the Monthly Processing Date, minus the
monthly deduction applicable on the next Monthly Processing Date. The Cash
Surrender Value will be determined by the Company on the Valuation Day it
receives a satisfactory Written Request signed by the Owner and the Policy
contract or an affidavit of lost policy. The Company provides appropriate forms
for such Written Requests. The Company will cancel the Policy as of the date of
the Written Request and will pay the Cash Surrender Value within seven days
following receipt of the Written Request.

2. Surrender of Policy -- Surrender Charges. A surrender charge, which
----------------------------------------
consists of an administrative surrender charge and a sales surrender charge, is

-12-
<PAGE>

imposed upon a surrender, reduction in Stated Death Benefit, or lapse of the
Policy within either the first 14 Policy Years or the 14 years following an
increase in Stated Death Benefit. This surrender charge is designed partially to
compensate the Company for the cost of issuing and distributing the Policy. The
surrender charges are described in Appendix B to this memorandum.

D. WITHDRAWALS
-----------

1. When Withdrawals are Permitted. At any time during the Insured's
------------------------------
lifetime and after the first Policy Year, the Owner may, by Written Request,
withdraw a portion of the Policy's Cash Surrender Value subject to the following
conditions:

. The minimum amount that may be withdrawn is $500.

. The amount withdrawn must be less than the then-current Cash
Surrender Value.

. The amount withdrawn cannot cause the Stated Death Benefit to be
reduced below $50,000.

. No more than 12 withdrawals may be made during a Policy Year.

. A withdrawal transaction charge equal to the lesser of 2% of the
withdrawal amount requested or $25 will be assessed on each withdrawal made
during a Policy Year after the first withdrawal.

. The Owner may direct how the withdrawal amount requested, plus any
withdrawal transaction charge and any surrender charge (collectively, the "Gross
Withdrawal") will be deducted from the Accumulation Value in the Subaccounts and
the Guaranteed Interest Account. If no directions are provided, the Gross
Withdrawal will be deducted from the Accumulation Value in the Subaccounts and
the Guaranteed Interest Account on a pro rata basis.

. The Company generally will pay a withdrawal request within seven
days following the Valuation Day it receives the request.

. If death benefit type A is in effect, a Withdrawal may reduce the
Accumulation Value and the Stated Death Benefit. However, if the Withdrawal is
the first Withdrawal of that Policy Year, the Insured's attained age is less

-13-
<PAGE>

than 81 at the time of the Withdrawal, and the Withdrawal occurs less than 16
years following the date of issue, then the Withdrawal will not reduce the
Stated Death Benefit if the amount of the Withdrawal is less than 5% of the
Stated Death Benefit. If the above conditions are met and the amount of the
Withdrawal exceeds the greater of 10% of the Accumulation Value immediately
prior to the Withdrawal and 5% of the Stated Death Benefit, the Stated Death
Benefit will only be reduced by the amount by which the Withdrawal exceeds the
greater of 10% of the Accumulation Value immediately prior to the Withdrawal and
5% of the Stated Death Benefit. Otherwise, the Accumulation Value will be
reduced, dollar for dollar, by the Gross Withdrawal amount. The Stated Death
Benefit will be reduced in proportion to the reduction in Accumulation Value
caused by the Withdrawal. The decrease in Accumulation Value will occur on the
day we process the Withdrawal; however, the decrease in Stated Death Benefit
will be effective as of the next Monthly Processing Date. If the reduction
occurs while the surrender charge is in effect (generally, during the first 14
Policy Years and the first 14 years after an increase in Stated Death Benefit),
a portion of the sales surrender charge may be assessed.

. If death benefit type B is in effect, a withdrawal will reduce the
Accumulation Value dollar for dollar but the Stated Death Benefit will not be
reduced as the Accumulation Value reflects the decrease.

E. LAPSES
------

If the Cash Surrender Value on a Monthly Processing Date is less than
the amount of the monthly deduction to be deducted on that date and the Three-
Year Guarantee is not in effect, the Policy will be in default and a grace
period will begin. A Policy will lapse on the 61st day after a grace period
notice in sent unless a premium sufficient to cover the monthly deduction is
paid during the grace period.

F. MONTHLY DEDUCTIONS
------------------

On each Monthly Processing Date, redemptions in the form of deductions
will be made from Accumulation Value for the monthly deduction, which is a
charge compensating the Company for administrative expenses and for the
insurance coverage provided by the Policy. The monthly deduction consists of
four components: (a) the initial Policy charge; (b) the monthly administrative
charge; (c) the cost of insurance charge; and (d) supplemental benefit charges.
The monthly deduction will be deducted from the Subaccounts of the Variable
Account and the Guaranteed Interest Account in the same proportion that the
Owner's Net Accumulation Value in each Subaccount and the Guaranteed Interest
Account bears to the total Net Accumulation Value as of the Monthly Processing
Date.

-14-
<PAGE>

1. Initial Policy Charge. The initial Policy charge is $20 per month
---------------------
for the first Policy Year. This charge is designed to reimburse the Company for
the costs of setting up a Policy, other than sales expenses, such as application
processing, medical examinations, establishment of Policy records and insurance
underwriting costs.

2. Monthly Administrative Charge. The monthly administrative charge is $6
-----------------------------
per month and is guaranteed never to exceed $10 a month. This charge is designed
to reimburse the Company for expenses necessary to cover the ongoing costs of
maintaining a Policy, such as premium billing and collections, claim processing,
Policy transactions, record keeping, reporting and other communications with
Owners, and other expenses and overhead.

3. Cost of Insurance Charge. The cost of insurance charge is
------------------------
intended to compensate the Company for the anticipated cost of paying the amount
of the Death Benefit that exceeds an Owner's Accumulation Value upon the death
of the Insured. The cost of insurance charges are calculated monthly, and
depend on a number of variables, including the Age, sex and risk class(es) of
the Insured. The charge varies from Policy to Policy and from month to month.

4. Supplemental Benefit Charges. An Owner may add supplemental
----------------------------
benefits to the Policy. Such benefits are made available by the Company through
riders to the Policy. If any additional benefits are added to a Policy, charges
for these benefits will be deducted monthly as part of the monthly deduction.

5. Persistency Refund. Southland currently intends to provide a
------------------
persistency refund to long-term Owners of the Policy. Each month the Policy or
a coverage segment of Stated Death Benefit remains in force after the tenth
Policy Anniversary, Southland will credit the Net Accumulation Value with a
refund equivalent to 0.35% on an annualized basis (0.02917% monthly) of the Net
Accumulation Value for that segment. The Net Accumulation Value will be
allocated to each coverage segment based upon the number of completed Policy
Years that segment has been in force and the size of the guideline annual
premium as defined by the federal income tax law definition of life insurance.
The persistency refund will be added to the Subaccounts of the Variable Account
and the Guaranteed Interest Account in the same proportion that the Accumulation
Value in each Account bears to the Net Accumulation Value as of the Monthly
Processing Date.

-15-
<PAGE>

G. DEATH BENEFITS
--------------

1. Payment of Death Proceeds. As long as the Policy remains in force,
-------------------------
the Company will pay the Death Proceeds to the Beneficiary after receiving
satisfactory proof of the Insured's death. The Death Proceeds is equal to the
sum of the Base Death Benefit on the date of the Insured's death, plus any extra
benefits provided by rider, minus any Policy Debt on that date and, if the death
occurred during a grace period, minus the past due monthly deductions. The Death
Proceeds will be paid to the Beneficiary in a lump sum generally within seven
days after the Valuation Day by which the Company has received at the Customer
Service Center all materials necessary to constitute satisfactory proof of
death. If a payment option is elected, the Death Proceeds will be applied to the
option within seven days after the Valuation Day by which the Company received
satisfactory proof of death and payments will begin under that option when
provided by the option.

2. Base Death Benefit and Death Benefit Types. The Policy provides
------------------------------------------
two Death Benefit Types: Death Benefit Type A and Death Benefit Type B. Under
Death Benefit Type A, the Base Death Benefit is the greater of the Stated Death
Benefit or a multiple of the Accumulation Value on the date of the Insured's
death. Under Death Benefit Type B, the Base Death Benefit is the greater of the
Stated Death Benefit plus the Accumulation Value, or a multiple of the
Accumulation Value, on the date of the Insured's death.

If investment performance is favorable, the amount of the Base Death
Benefit may increase. However, under Death Benefit Type A, the Base Death
Benefit ordinarily will not change for several years as a result of any
favorable investment performance and may not change at all, whereas under Death
Benefit Type B, the Base Death Benefit will vary directly with the investment
performance of the Accumulation Value.

In both cases, the multiple of the Accumulation Value depends on the
Insured's attained Age at death. The table of multiples in effect as of the
issue date is set forth in the Policy. The Company reserves the right to change
the table if the table becomes inconsistent with any federal income tax laws
and/or regulations.

3. Changes in Death Benefit Type. The Death Benefit Type is selected in
-----------------------------
the application for the Policy. After the first Policy Year, the Owner, by
Written Request, may change the Death Benefit Type on the Policy subject to the
following rules:

-16-
<PAGE>

. After any change, the Stated Death Benefit must be at least $50,000;

. The effective date of the change will be the Policy Anniversary
after the Company approves the Written Request for the change;

. When a change from Death Benefit Type A to Death Benefit Type B is
made, the Stated Death Benefit after the change will be equal to the Stated
Death Benefit before the change minus the Accumulation Value on the effective
date of the change.

. When a change from Death Benefit Type B to Death Benefit Type A is
made, the Stated Death Benefit after the change will be equal to the Stated
Death Benefit before the change plus the Accumulation Value on the effective
date of the change.

. The Company may require evidence of insurability in the event of a
change from Type A to Type B.

4. Changes in Stated Death Benefit. The initial Stated Death Benefit
-------------------------------
is set at the time the Policy is issued. The minimum initial Stated Death
Benefit is $100,000. The Owner, by Written Request, may increase or decrease
the initial Stated Death Benefit from time to time, subject to the following
conditions:

. No change will be permitted that would result in the Policy not
satisfying the requirements of section 7702 of the Internal Revenue Code.

. An increase or decrease can be requested only during the 30-day
period preceding a Policy Anniversary.

Increases
---------

. Any increase in the Stated Death Benefit must be at least $10,000
and an application must be submitted, along with evidence of insurability
satisfactory to the Company.

. The Company will employ its standard underwriting procedures to
determine whether the Insured is insurable for the increase, and to which rate
class the Insured should be assigned for the increase.

. An increase in Stated Death Benefit will become effective as of the
Policy Anniversary on or following the date the increase is approved.

-17-
<PAGE>

. The Policy must be returned by the Owner so that the Company can
Policy to reflect the increase. The amended Policy will be promptly returned to
the Owner.

. If the increase becomes effective during the first three Policy
Years, the Three-Year Guarantee will be extended for three years from the
effective date of the increase.

. A Target Premium will be established for the increase, and the
portion of premiums paid thereafter allocated to the increase will be subject to
a 4% sales charge until an amount equal to 10 Target Premiums for the increase
has been paid. Premiums paid are allocated to the increase in Stated Death
Benefit in the same proportion that the Target Premium for each portion of the
Stated Death Benefit bears to the total Target Premium for the Policy after the
increase is taken into account.

Decreases
---------

. Any decrease in the Stated Death Benefit must be at least $10,000,
and the Stated Death Benefit after the decrease must be at least $50,000.

. No decrease may be made in the first year following the effective
date of an increase in Stated Death Benefit.

. A decrease in Stated Death Benefit will become effective as of the
Policy Anniversary on or following the Company's receipt of the Written Request.

. If increases in the initial Stated Death Benefit are in effect, a
decrease in Stated Death Benefit will be allocated to each segment of the Stated
Death Benefit in the same proportion as the Target Premium for each segment
bears to the total Target Premiums for the Policy.

. If a decrease in Stated Death Benefit occurs during the first 14
Policy Years, or during the first 14 years following an increase in Stated Death
Benefit, a Surrender Charge will apply.

H. POLICY LOANS
------------

1. Obtaining Policy Loans. The Owner may obtain a Policy loan from
----------------------
the Company at any time after the first Policy Anniversary by submitting a
Written Request to the Customer Service Center. The minimum amount that the

-18-
<PAGE>

Owner may borrow is $100. The maximum loan amount is 90% of the Policy's Cash
Surrender Value on the Valuation Day that the Company receives the loan request.
Outstanding Policy loans reduce the amount available for new loans. Policy loans
will be processed as of the Valuation Day the Written Request is received and
loan proceeds generally will be sent to the Owner within seven days thereafter.

2. Interest on Policy Loans. The Company charges interest daily on
------------------------
any outstanding Policy loan at a maximum annual interest rate of 6%. Interest
is due and payable on each Policy Anniversary while a Policy loan is
outstanding. If interest is not paid when due, the amount of the interest is
added to the loan and becomes part of the outstanding Policy loan.

3. Collateral for Policy Loans. When a Policy loan is made (or when
---------------------------
interest is not paid when due), an amount equal to the loan proceeds (or due and
unpaid interest) is withdrawn from the Accumulation Value in the Subaccounts or
Guaranteed Interest Account. This withdrawal is made pro rata on the basis of
Accumulation Value in each Subaccount and the Guaranteed Interest Account unless
the Owner directs a different allocation when requesting the loan and as long as
at least $100 remains in the Subaccount or Guaranteed Interest Account after the
allocation. The amount withdrawn is then transferred to the Policy Loan Account
in the General Account.

4. Preferred Policy Loans. Certain loan amounts taken after the
----------------------
earlier of the tenth Policy Anniversary, or the fifth Policy Anniversary if the
Insured's Age is 60 or greater, will be considered preferred loan amounts.
During each Policy Year of preferred loan eligibility, the first loan made
during that year will be considered a preferred loan amount up to a maximum of
10% of the Net Accumulation Value. Any amount loaned later in that Policy Year
will not be considered a preferred loan amount. If the preferred loan amount
made during any Policy Year is less than the maximum allowed, the balance may
not be carried over to increase the eligible preferred loan amount of any
subsequent Policy Year. Beginning with the 21st Policy Year, all loan balances
will be considered to be preferred loan amounts. The amount of any Guaranteed
Interest Account Accumulation Value equal to any preferred loan amount on the
Policy will be credited with interest at the rate of 4%.

5. Effects of Policy Loans. A Policy loan, whether or not repaid,
-----------------------
will have a permanent effect on the Death Benefit and Accumulation Values
because the investment results of the Subaccounts of the Variable Account and
current interest rates credited on the Guaranteed Interest Account Accumulation
Value will apply only to the non-loaned portion of the Accumulation Value. The

-19-
<PAGE>

longer the loan is outstanding, the greater the effect is likely to be. The
effect could be favorable or unfavorable, depending on the investment results of
the Subaccounts or credited interest rates for the Guaranteed Interest Account
while the Policy loan is outstanding. Policy loans may increase the potential
for lapse if investment results of the Subaccounts are less than anticipated.
In addition, Policy loans could, particularly if not repaid, make it more likely
than otherwise for a Policy to terminate.

I. MATURITY BENEFIT
----------------

If the Insured is living at Age 100 and the Policy is in force, the
Company will pay the Owner the Net Accumulation Value and the Policy will
terminate unless the Owner exercise his or her right to continue the Policy.

J. PAYMENT OPTIONS
---------------

The Policy offers a wide variety of optional ways of receiving
proceeds payable under the Policy, such as on surrender, death or maturity,
other than in a lump sum. None of these options vary with the investment
performance of a separate account because they are all forms of fixed-benefit
annuities.

K. PAYMENTS BY THE COMPANY
-----------------------

Lump sum payments of withdrawals, surrenders or Death Proceeds from
the Subaccounts will usually be made within seven days of the Valuation Day on
which the Company receives the request and all required documentation at the
Customer Service Center. If proceeds from a withdrawal, surrender or Death
Proceeds are to be applied to a payment option, the proceeds will usually be
applied within seven days of the Valuation Day on which the Company receives the
request and all required documentation at the Customer Service Center. The
Company may postpone the processing of any such transactions for any of the
following reasons:

1. When the New York Stock Exchange ("NYSE") is closed for trading other
than for customary holiday or weekend closings, or trading on the NYSE is
otherwise restricted, as determined by the Securities and Exchange Commission
("SEC");

2. When the SEC determines that an emergency exists that would make the
disposal of securities held in the Variable Account or the determination of the
value of the Variable Account's assets not reasonably practicable; or

-20-
<PAGE>

3. When the SEC by order permits a delay for the protection of Owners.

The Company may defer up to six months the payment of any withdrawal
or proceeds from the Guaranteed Interest Account. Interest will be credited at
the currently declared rate of interest for the Guaranteed Interest Account
until payment is made.

L. RIGHT TO CONVERT THE POLICY
---------------------------

The converted policy will be on the flexible premium adjustable life
insurance plan being issued by the Company. The converted Policy will provide
the same amount of death benefit or the same net amount at risk to the Company
as the Policy and will have the same issue Age and date of issue as the Policy.
The cost of insurance rates for the converted Policy will be those applicable to
flexible premium adjustable life policies in the same risk classification as the
Policy and issued on the same date as the Policy. All Policy Debt must be paid
at the time of conversion. The contestable period, suicide period, and
surrender charge period of the converted Policy will be measured from the date
of issue of the Policy. The effective date of the conversion will be the
Valuation Day the Company received a Written Request to convert at its Customer
Service Center. When exercising the conversion right, the Owner is required to
return the Policy to the Customer Service Center, and the Company will send the
Owner a new Policy form which will not allow the allocation of future premiums
to Subaccounts of the Variable Account.

M. REDEMPTION ERRORS
-----------------

In accordance with industry practice, the Company will establish
procedures to address and to correct errors in amounts redeemed from the
Subaccounts and the Guaranteed Interest Account, except for de minimis amounts
-- -------
(amounts under $5.00).

-21-
<PAGE>

APPENDIX A

Charges will be deducted from the Net Accumulation Value on each
Monthly Processing Date to compensate the Company for administrative expenses
and for the insurance coverage provided by the Policy. The monthly deduction
consists of four components: (a) the initial Policy charge, (b) monthly
administrative charge, (c) the cost of insurance charge, and (d) supplemental
benefit charges. Because portions of the monthly deduction, such as the cost of
insurance charge, can vary from month to month, the monthly deduction may vary
in amount from Policy to Policy and from month to month. The monthly deduction
will be deducted from the Subaccounts of the Variable Account and the Guaranteed
Interest Account in the same proportion that the Owner's Net Accumulation Value
in each Subaccount and the Guaranteed Interest Account bears to the total Net
Accumulation Value as of the Monthly Processing Date.

(a) INITIAL POLICY CHARGE. The initial Policy charge is $20 per
---------------------
month for the first Policy Year. This charge is designed to reimburse the
Company for expenses and covers the costs of setting up each Owner's Policy,
other than sales expenses, such as application processing, medical examinations,
establishment of Policy records and insurance underwriting costs.

(b) MONTHLY ADMINISTRATIVE CHARGE. The monthly administrative charge
-----------------------------
is $6 per month and is guaranteed never to exceed $10 a month. This charge is
designed to reimburse the Company for expenses incurred in covering the ongoing
costs of maintaining each Owner's Policy, such as premium billing and
collections, claim processing, Policy transactions, record keeping, reporting
and other communications with Owners, and other expenses and overhead. The
initial amount of this charge is not more than the average expected cost of the
services to be provided this year.

(c) COST OF INSURANCE CHARGE. The cost of insurance charge
------------------------
compensates the Company for the anticipated cost of paying the amount of the
Death Benefit that exceeds the Owner's Accumulation Value upon the death of the
Insured. The cost of insurance charges are calculated monthly, and depend on a
number of variables. The charge varies from Policy to Policy and from month to
month.

The cost of insurance charge is equal to the Company's current monthly
cost of insurance rate multiplied by the net amount at risk under the Policy for
the Death Benefit. The net amount at risk for the Base Death Benefit is equal
to the difference between the current Base Death Benefit and the amount of the
Owner's Accumulation Value on the Monthly Processing Date. For this purpose,
the amount of the Owner's Accumulation Value is determined after deduction of
administrative charges and other supplemental benefit charges due on that date,
but before deduction of the cost of insurance charges for the Base Death
Benefit, and for any Adjustable Term Insurance Rider. The net amount at risk
for the Adjustable Term Insurance Rider is equal to the amount of the benefit
provided. The amount of the cost of insurance charges will vary from month to
month with changes in the net amount at risk, changes in the relative makeup of
the death benefit, and with increasing Age of the Insured.
<PAGE>

If the Base Death Benefit of an Owner's Policy consists of more than
one segment because there has been an increase in Stated Death Benefit, then the
charge is calculated separately for each segment. The cost of insurance charge
for each segment is equal to the Company's current monthly cost of insurance
rate for each segment multiplied by the net amount at risk for that segment of
the Death Benefit. Net amount at risk for each segment of the Death Benefit is
calculated on the Monthly Processing Date. Net amount at risk is allocated to
each Stated Death Benefit segment in the same proportion that the Stated Death
Benefit of each segment bears to the sum of the Stated Death Benefit for all
segments as of the Monthly Processing Date.

The cost of insurance rate for a Policy (or for a segment) is based on
the Age, sex and risk class of the Insured, and therefore varies from time to
time. The Company currently places Insureds in the following risk classes,
based on the Company's underwriting: a smoker or nonsmoker standard risk class
or a risk class involving a higher mortality risk (a "substandard class").

The Company's current cost of insurance rates may be less than the
guaranteed rates. In addition, current rates are greater for Policies with
Stated Death Benefit (or Target Death Benefit, if any) that is less than
$250,000 on the Policy Date. Current cost of insurance rates will be determined
based on the Company's expectations as to future mortality, investment, expense
and persistency experience. These rates may change from time to time, but they
will never be more than the guaranteed maximum rates set forth in the Owner's
Policy. The guaranteed rates for standard risk classes are based on the 1980
Commissioners' Standard Ordinary Mortality Tables, Age Nearest Birthday ("1980
CSO Tables"), sex-distinct. The guaranteed rates for substandard risk classes
are based on multiples or additives of the 1980 CSO Tables.

(d) SUPPLEMENTAL BENEFIT CHARGES. If any additional benefits are
----------------------------
added to an Owner's Policy, applicable charges for each additional benefit will
be deducted monthly from the Owner's Accumulation Value as part of the monthly
deduction. Additional benefits are provided through riders attached to the
Policy. The Company may cancel these additional benefits at any time.
Currently, the Company offers the following additional benefit riders:

(1) The Accidental Death Benefit Rider will pay the benefit amount
selected by the Owner if the Insured dies as a result of an accident or if the
Insured dies within 90 days of an injury sustained in an accident and the death
occurs prior to the Insured's Age 70. The minimum amount of coverage is $5,000
and the maximum amount is the Stated Death Benefit;

(2) The Adjustable Term Insurance Rider allows the Death Proceeds to
be increased. The amount of this rider adjusts daily to represent the amount of
any difference between the Target Death Benefit selected by the Owner and the
Base Death Benefit currently in effect;

A-ii
<PAGE>

(3) The Additional Insured Rider allows the Owner to provide for
death benefits upon the death of immediate family members of the Insured. A
maximum of nine Additional Insured Riders may be added to the Owner's Policy.
The minimum amount of coverage for each Rider is $10,000 and the maximum
coverage for all Additional Insured Riders combined equals five times the Stated
Death Benefit of the Owner's Policy;

(4) The Children's Insurance Rider allows an Owner to add death
benefit coverage on his or her children. Children may be covered upon birth or
legal adoption without the Owner presenting evidence of insurability to the
Company. The minimum amount of coverage is $1,000 per child and the maximum
amount of coverage is $10,000 per child;

(5) The Exchange of Insured Rider allows the Owner to change the
Insured. Changing the Insured may cause the cost of insurance charge to change;
however, the Company will not change the Policy values or the surrender charge.
The Company assesses no charge to add this Rider to a Policy;

(6) The Guaranteed Insurability Rider allows the Owner to increase
the Stated Death Benefit without providing the Company with evidence that the
Insured remains insurable during the Policy;

(7) The Waiver of the Cost of Insurance and Monthly Expense Charges
Rider provides that during the total disability of the Insured, while the Policy
remains in force, the monthly expense charges, cost of insurance charges and
Rider charges will be waived and therefore not deducted from Owner's Net
Accumulation Value; and

(8) The Waiver of Specified Premium Rider provides that during the
total disability of the Insured, while the Policy remains in force, a specified
premium will be credited monthly to the Policy. In the Policy application, the
Owner selects the amount of premium, within limits, that will be waived.

A-iii
<PAGE>

APPENDIX B

The Company will assess a surrender charge against the Owner's
Accumulation Value upon a Surrender, reduction in Stated Death Benefit or lapse
of the Policy during the first 14 Policy Years, or the 14 years following an
increase in Stated Death Benefit (also referred to as an addition of a new
coverage segment of Stated Death Benefit). The surrender charge consists of two
charges: an administrative surrender charge and a sales surrender charge.

ADMINISTRATIVE SURRENDER CHARGE
- -------------------------------

The administrative surrender charge is equal to $4.00 per $1,000 of
Stated Death Benefit.

The administrative surrender charge is calculated separately for the
initial Stated Death Benefit and for each increase in Stated Death Benefit (the
initial Stated Death Benefit and each increase is referred to as a death benefit
segment). The charge is equal to $4.00 per $1,000 of Stated Death Benefit for
each death benefit segment. The administrative surrender charge in effect on
any Valuation Day is taken into account when calculating the Cash Surrender
Value payable on a Surrender. The administrative surrender charge is not
deducted on a reduction in Stated Death Benefit. The administrative surrender
charge remains level for the first 9 Policy Years or 9 years after an increase
in Stated Death Benefit, then decreases by one-sixth of the amount in effect at
the end of the 9th Policy Year until it reaches zero at the beginning of the
15th year, or the year in which the Insured reaches Age 98, whichever is
earlier.

The administrative surrender charge is designed to partially cover the
administrative expenses associated with setting up a Policy (other than sales
expenses), such as application processing, establishment of Policy records and
insurance underwriting costs. It also includes costs associated with the
development and operation of the Company's systems for administering the
Policies.

SALES SURRENDER CHARGE
- ----------------------

The sales surrender charge is equal to 50% of actual premiums paid up
to one Target Premium plus 40% of any additional premiums paid up to two Target
Premiums. However, in the first two Policy Years, the sales surrender charge is
capped at 26% of premiums paid up to one Target Premium, plus 6% of premiums
paid between one and two Target Premiums, plus 5% of all other premiums. Target
Premiums are actuarially determined based on the Age, sex and risk class of the
Insured, and are not based on the planned premium determined when the Policy is
---
purchased.

The maximum sales surrender charge for a Stated Death Benefit remains
level for the first nine Policy Years or for the first nine years following an
increase in a Stated Death Benefit segment, then decreases by one-sixth of the
amount in effect at the end of the 9th year each Policy Year until it reaches
zero at the beginning of the 15th year, or the year in which the Insured reaches
Age 98, whichever is earlier.
<PAGE>

A sales surrender charge is deducted on a decrease in Stated Death
Benefit, and future sales surrender charges are adjusted based on the following
rules. If the new Target Premium for each Stated Death Benefit segment is
greater than or equal to the sum of the Owner's paid premiums that are allocated
to the segment, the maximum sales surrender charge the Owner may pay in the
future will be reduced, but a sales surrender charge will not be deducted from
the Accumulation Value. If the new Target Premium for each Stated Death Benefit
segment is less than the sum of the Owner's paid premiums that are allocated to
the segment, the maximum sales surrender charge the Owner may pay in the future
will be reduced and a sales surrender charge will be deducted from the
Accumulation Value. The new sales surrender charge will be recalculated as if
the new Target Premium was always in effect for the segment. A deduction equal
to the difference between the sales surrender charge as calculated before and
after the decrease will be taken from the Accumulation Value.

If the Owner requests a decrease to the Stated Death Benefit or take a
Withdrawal that causes the Stated Death Benefit to be reduced, more than nine
years following the Policy Date or the date of an increase to the Stated Death
Benefit, whichever is applicable, the maximum sales surrender charge the Owner
could pay in the future will be reduced in the same proportion that the Stated
Death Benefit is reduced.

B-ii

<PAGE>

Exhibit 2
[LETTERHEAD OF SOUTHLAND LIFE
ING GROUP APPEARS HERE]

May 8, 1996

Southland Life Insurance Company
5780 Powers Ferry Road, N.W.
Atlanta, Georgia 30327-4390

Dear Sir or Madam:

This opinion is furnished in connection with the Form S-6 Registration
Statement being filed by Southland Life Insurance Company ("Southland") under
the Securities Act of 1933, as amended (the "Act"), for the offering of
interests ("Interests") in Southland Separate Account L1 ("Separate Account L1")
under the Flexible Premium Variable Universal Life Insurance Policies
("Policies") to be issued by Southland. The securities being registered under
the Act are to be offered in the manner described in the Registration Statement.

I have examined or supervised the examination of all such corporate records
of Securities Life and such other documents and such laws as I consider
appropriate as a basis for the opinion hereinafter expressed. On the basis of
such examination, it is my opinion that:

1. Southland is a corporation duly organized and validly existing under
the laws of the State of Texas.

2. Separate Account L1 was duly created as a separate investment account
of Southland pursuant to the laws of the State of Texas.

3. The assets of Separate Account L1 will be owned by Southland. Under
Texas law and the provisions of the Policies, the income, gains and losses,
whether or not realized, from assets allocated to Separate Account L1 must
be credited to or charged against such Account, without regard to the other
income, gains or losses of Southland.

4. The Policies provide that the assets of Separate Account L1 may not be
charged with liabilities arising out of any other business Southland may
conduct, except to the extent that assets of Separate Account L1 exceed its
liabilities arising under the Policies.

5. The Policies and the Interests in Separate Account L1 to be issued
under the Policies have been duly authorized by Southland; and the
Policies, including the Interests therein, when issued and delivered, will
constitute validly issued and binding obligations of Southland in
accordance with their terms.
<PAGE>

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the caption "Legal Matters" in the
Prospectus contained in the Registration Statement.

Sincerely,

/S/Francis J. Mulcahy

Francis J. Mulcahy
Secretary, Vice President
and General Counsel

FJM/jnc

<PAGE>

Exhibit 6

[LETTERHEAD OF SOUTHLAND LIFE APPEARS HERE]

May 8, 1996

Board of Directors
Southland Life Insurance Company
5780 Powers Ferry Road
Atlanta, Georgia 30327-4390

RE: Statement of Opinion regarding Aspects of Southland Life Insurance
Company Filing of an Individual Flexible Premium Adjustable
Combination Fixed and Variable Life Insurance Policy (S.E.C.
Registration Number 33-97852)

To the Board of Directors:

This opinion is furnished in connection with the filing of a Registration
Statement on Form S-6 (the "Registration Statement") covering certain flexible
premium adjustable combination fixed and variable life insurance policies (a
"Policy" or the "Policies") proposed to be issued by Southland Life Insurance
Company (the "Company").

The Prospectus included in the Registration Statement describes the Policies.
The Policy forms were reviewed under my direction and I am familiar with the
Registration Statement and the Exhibits thereto. In my opinion:

1. The sales load, as defined in paragraph (c)(4) of Rule 6e-3T under the
Investment Company Act of 1940 will not exceed nine percent (9%) of the sum of
the guideline annual premiums that would be paid during the period equal to the
lesser of 20 years or the life expectancy based on the appropriate 1980
Commissioners Standard Ordinary Mortality Table.

2. The illustrations of Policy values, surrender values, death benefits and
accumulated premiums in the Prospectus included in the Registration Statement
and based on the assumptions stated in the illustrations are consistent with
provisions of the Policy. The rate structure of the Policies have not been
designed so as to make the relationship between premiums and benefits, as shown
in the illustrations, appear to be more favorable to prospective non-smoker
purchasers at age 45 than to prospective purchasers of Policies, for males or
females, smokers or non-smokers, at other issues ages.

3. The information contained in the Prospectus included in the Registration
Statement describing premiums, surrender charges and other charges described in
the Registration Statement are consistent with the provisions of the Policy.

I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of my name relating to actuarial matters under the
heading "Experts" in the Prospectus.

/s/ Pamela M. Crane

Pamela M. Crane, F.S.A., M.A.A.A.
Senior Vice President - Finance/Actuarial
Southland Life Insurance Company

Southland Life Insurance Company

5780 Powers Ferry Road, NW . Atlanta, GA 30327-4390
Phone: 404-980-5100 . Fax: 404-980-5800

<PAGE>

EXHIBIT 7(a)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Financial Statements" and to the use of our report dated April 5, 1996, in Pre-
Effective Amendment No. 2 to the Registration Statement (Form S-6 No. 33-97852)
and related Prospectus of Southland Separate Account L1 (dated May 14, 1996).

ERNST & YOUNG LLP

Atlanta, Georgia
May 8, 1996

<PAGE>

[Letterhead of Sutherland, Asbill & Brennan]

Exhibit 7(b)

May 8, 1996

Southland Life Insurance Company
5780 Powers Ferry Road, N.W.
Atlanta, GA 30340

Gentlemen:

We hereby consent to the reference to our name under the caption "Legal
Matters" in the prospectus filed as part of the Pre-Effective Amendment No. 2 to
Form S-6 for Southland Separate Account L1 (File No. 33-97852). In giving this
consent, we do not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933.

Sincerely,

SUTHERLAND, ASBILL & BRENNAN

By: /s/ Stephen E. Roth
--------------------------
Stephen E. Roth, Esq.

LFB