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PROSPECTUS
SUPPLEMENT
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VARIFLEX SIGNATURE VARIABLE ANNUITY
SUPPLEMENT DATED MARCH 25, 1999
TO PROSPECTUS DATED MAY 1, 1998
The section entitled "Death Benefit" found on page 18 of this prospectus is
deleted in its entirety and replaced with the following:
DEATH BENEFIT
If the Owner dies prior to the Annuity Start Date, Security Benefit will pay
the death benefit proceeds to the Designated Beneficiary upon receipt of due
proof of the Owner's death and instructions regarding payment to the Designated
Beneficiary. If there are Joint Owners, the death benefit proceeds will be
payable upon receipt of due proof of death of either Owner prior to the Annuity
Start Date and instructions regarding payment.
If the surviving spouse of the deceased Owner is the sole Designated
Beneficiary, such spouse may elect to continue the Contract in force, subject to
certain limitations. See "Distribution Requirements" below. If the Owner is not
a natural person, the death benefit proceeds will be payable upon receipt of due
proof of death of the Annuitant prior to the Annuity Start Date and instructions
regarding payment. Additionally, if the Owner is not a natural person, the
amount of the death benefit will be based on the age of the oldest Annuitant on
the date the Contract was issued. If the death of the Owner occurs on or after
the Annuity Start Date, any death benefit will be determined according to the
terms of the Annuity Option. See "Annuity Options," page 22.
The death benefit proceeds will be the death benefit reduced by any
outstanding Contract Debt and any uncollected premium tax. If an Owner dies
during the Accumulation Period and the age of each Owner was 75 or younger on
the date the Contract was issued, the amount of the death benefit will be the
greatest of:
* The sum of all Purchase Payments, less any reductions caused by previous
withdrawals,
* The Contract Value on the date due proof of death and instructions regarding
payment are received by Security Benefit, or
* The stepped-up death benefit.
The stepped-up death benefit for Contracts issued prior to March 25, 1999 is:
(1) the largest death benefit on any Contract anniversary that is both an exact
multiple of four and occurs prior to the oldest Owner attaining age 76, plus (2)
any Purchase Payments made since the applicable anniversary, less (3) any
withdrawals since the applicable anniversary.
The stepped-up death benefit for Contracts issued on or after March 25, 1999
is:
* The largest death benefit on any Contract anniversary that occurs prior to
the oldest Owner attaining age 76, plus
* Any Purchase Payments made since the applicable Contract anniversary, less
* Any withdrawals since the applicable anniversary.
If an Owner dies during the Accumulation Period and the age of any Owner was
76 or greater on the date the Contract was issued, or if due proof of death
(regardless of the age of any Owner on the date the Contract was issued) and
instructions regarding payment are not received by Security Benefit at its Home
Office within six months of the date of the Owner's death, the death benefit
will be the Contract Value on the date due proof of death and instructions
regarding payment are received by Security Benefit at its Home Office.
The death benefit proceeds will be paid to the Designated Beneficiary in a
single sum or under one of the Annuity Options, as elected by the Designated
Beneficiary. If the Designated Beneficiary is to receive annuity payments under
an Annuity Option, there may be limits under applicable law on the amount and
duration of payments that the Beneficiary may receive, and requirements
respecting timing of payments. A tax adviser should be consulted in considering
Annuity Options. See "Federal Tax Matters," page 27 and "Distribution
Requirements," below for a discussion of the tax consequences in the event of
death.
A death benefit is not available under a Group Contract.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
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