<PAGE>
THE ENDEAVOR VARIABLE ANNUITY
ISSUED BY
PFL LIFE INSURANCE COMPANY
Supplement Dated December 18, 1998
To The
Prospectus Dated May 1, 1998
An optional rider for the Family Income Protector benefit has been added to
The Endeavor Variable Annuity. The rights and benefits under the Family Income
Protector are summarized below; however, the description of the Family Income
Protector contained in this prospectus supplement is qualified in its entirety
by reference to the rider itself, a copy of which is available upon request from
PFL.
All capitalized terms used, which are not defined in this supplement, shall
have the same meanings as the same terms used in the accompanying prospectus.
The Family Income Protector may not be available in all states at the date
of this supplement. Please contact PFL at (800) 525-6205 for additional
information regarding the availability of the Family Income Protector in your
state.
_______________
FAMILY INCOME PROTECTOR
You may elect to purchase this benefit, which guarantees the total amount
you will have to apply to a Family Income Protector payment option and which
guarantees the amounts of those payments once you begin to receive them. The
Family Income Protector assures you of a minimum level of income in the future
by guaranteeing a Minimum Annuitization Value (discussed below) after 10 years,
based on the Policy Value at the date the rider is issued (adjusted for any
withdrawals and applicable taxes and charges), increased by a guaranteed annual
growth rate. By electing the Family Income Protector, you can participate in
the gains of the underlying variable investment options you select while knowing
that you are guaranteed a minimum level of income in the future, regardless of
the performance of the underlying variable investment options.
You may elect to purchase the Family Income Protector at the time you
purchase the Policy or on subsequent Policy Anniversaries. A Family Income
Protector Rider Fee, currently 0.30% of the Minimum Annuitization Value is
charged prior to annuitization. You cannot begin to obtain payments under the
Family Income Protector until the tenth Policy Anniversary after it is added to
your Policy. A Stabilized Payment Fee, currently equal to an effective annual
rate of 1.25% of the daily net asset value in the variable investment options,
is reflected in the amount of the variable payments you receive if you annuitize
under the Family Income Protector rider.
THIS PROSPECTUS SUPPLEMENT MUST BE ACCOMPANIED
BY THE PROSPECTUS FOR
THE ENDEAVOR VARIABLE ANNUITY DATED MAY 1, 1998
<PAGE>
THE FAMILY INCOME PROTECTOR DOES NOT ESTABLISH OR GUARANTEE POLICY VALUE OR
GUARANTEE PERFORMANCE OF ANY INVESTMENT OPTION. Because this benefit is based
on conservative actuarial factors, the level of lifetime income that it
guarantees may often be less than the level that would be provided by
application of the Policy Value at otherwise applicable annuity factors.
Therefore, the Family Income Protector should be regarded as a safety net. As
described herein under "MIMIMUM ANNUITIZATION VALUE," withdrawals will reduce
the Minimum Annuitization Value, and may reduce the Minimum Annuitization Value
on a basis greater than dollar-for-dollar.
Hypothetical Illustration
- -------------------------
The amounts shown below are hypothetical guaranteed minimum monthly payment
amounts under the Family Income Protector for a $100,000 premium when annuity
payments do not begin until the rider anniversary indicated in the left-hand
column. These figures assume that there were no subsequent premium payments, or
withdrawals, that there were no premium taxes and that the $100,000 premium is
subject to the Family Income Protector. Six different annuity payment options
are illustrated: a male annuitant, a female annuitant and a joint and survivor
annuity, each on a Life Only and a Life with 10 Year Certain basis. These
hypothetical illustrations assume that the annuitant is (or both annuitants are)
60 years old when the rider is issued, that the annual growth rate is 6.0% (once
established an annual growth rate will not change during the life of the Family
Income Protector rider), and that there was no upgrade of the Minimum
Annuitization Value. The figures below, which are the amount of the first
monthly payment, are based on an assumed investment return of 3%. Subsequent
payments will never be less than the amount of the first payment (although
subsequent payments are calculated using a 5% assumed investment return).
Illustrations of guaranteed minimum payments based on other assumptions
will be provided upon request.
<TABLE>
<CAPTION>
Life Only = Life Annuity with No Period Certain Life 10 = Life Annuity with 10 Years Certain
================================================================================================================
Rider Anniversary at
Exercise Date Male Female Joint & Survivor
- ----------------------------------------------------------------------------------------------------------------
Life Only Life 10 Life Only Life 10 Life Only Life 10
================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
10 (age 70) $1,135 $1,067 $ 976 $ 949 $ 854 $ 852
- ----------------------------------------------------------------------------------------------------------------
15 1,833 1,634 1,562 1,469 1,332 1,318
- ----------------------------------------------------------------------------------------------------------------
20 (age 80) 3,049 2,479 2,597 2,286 2,145 2,078
================================================================================================================
</TABLE>
This hypothetical illustration should not be deemed representative of past or
future performance of any underlying variable investment option.
Because the annuity payment options provided for in the Policy are based on
the Policy Value at the time you start receiving annuity payments, the amount of
those annuity payments may exceed the payments provided by the Family Income
Protector. Accordingly, you may elect to receive annuity payments from either
the Policy using the Policy Value or the Family Income Protector using the
Minimum Annuitization Value.
MIMIMUM ANNUITIZATION VALUE. On the rider date, the Minimum Annuitization
Value is the Policy Value. Thereafter, the Minimum Annuitization Value will be
the Policy Value on the date the rider is issued, plus any additional payments,
minus an adjustment for any withdrawals made after the date the rider is issued,
accumulated at the annual growth rate written on page one of the Family Income
Protector rider minus any premium taxes. The annual growth rate is currently 6%
per year; PFL may, at its discretion, change the rate in the future, but the
rate will never be less than 3% per year, and once the Family Income Protector
rider is added to your Policy, the annual growth rate will not vary during the
life of that Family Income Protector rider.
<PAGE>
Withdrawals will affect the Minimum Annuitization Value as follows: Each
Policy Year, withdrawals up to the limit of the total free amount (the Minimum
Annuitization Value on the last Policy Anniversary multiplied by the annual
growth rate) reduce the Minimum Annuitization Value on a dollar-for-dollar
basis. Withdrawals over this free amount will reduce the Minimum Annuitization
Value on a pro rata basis by an amount equal to the Minimum Annuitization Value
immediately prior to the excess withdrawal multiplied by the percentage
reduction in the Policy Value resulting from the excess withdrawal. The free
amount will always be a relatively small fraction of the Minimum Annuitization
Value.
The Minimum Annuitization Value may only be used to annuitize using the
Family Income Protector payment options (discussed below) and may not be used
with any of the annuitization options shown in the Policy.
The Minimum Annuitization Value is used solely for purposes of calculating
the Family Income Protector payment and does not establish or guarantee a Policy
Value or guarantee performance of any investment option.
MINIMUM ANNUITIZATION VALUE UPGRADE. Within 30 days after a Policy
Anniversary, you may elect to upgrade the Minimum Annuitization Value to the
Policy Value on that anniversary if the Policy Value is greater than the Minimum
Annuitization Value. The last date to elect to upgrade the Minimum
Annuitization Value is the Policy Anniversary immediately before your 85th
birthday. The laws of some states may require an earlier date. For your
convenience, the last date to upgrade will be set forth on page one of the
Family Income Protector rider.
Upon upgrading, the current Family Income Protector rider will terminate
and a new one will be issued with its own specified guaranteed benefits and
fees. The benefits and fees under the new rider may differ from your benefits
and fees prior to upgrading (the benefits and fees that may change include the
annual growth rate, the Family Income Protector rider fee, the fee waiver
threshold, the stabilized payment fee, and the waiting period before the Family
Income Protector can be exercised).
CONDITIONS OF EXERCISE OF THE FAMILY INCOME PROTECTOR. The Family Income
Protector may only be exercised within the 30 days immediately following the
tenth or later Policy Anniversary after the Family Income Protector is elected
or, in the case of an upgrade of the Minimum Annuitization Value, the tenth or
later Policy Anniversary following the upgrade; PFL may, at its discretion,
change the waiting period before the Family Income Protector can be exercised in
the future, but once the Family Income Protector rider is added to your Policy,
the waiting period will not vary during the life of that Family Income Protector
rider. For your convenience, the first date to exercise the Family Income
Protector will be set forth on page one of the Family Income Protector rider.
The Family Income Protector may not, however, be exercised after the Policy
Anniversary after your 94th birthday. The laws of some states may require an
earlier date. For your convenience, the last date to exercise the Family Income
Protector will be set forth on page one of the Family Income Protector rider.
If you annuitize your Policy at any time other than indicated above, the
Family Income Protector cannot be exercised and, accordingly, the Family Income
Protector will provide no benefits. For example, if you annuitized your Policy
twelve and one-half years after you purchased the Policy and Family Income
Protector rider, you would not be able to exercise the Family Income Protector
and use the Minimum Annuitization Value or receive guaranteed minimum stabilized
payments.
FAMILY INCOME PROTECTOR PAYMENT OPTIONS. The amount of the first payment
provided by the Family Income Protector will be determined by multiplying each
$1,000 of Minimum Annuitization Value to the applicable annuity factor shown on
Schedule I of the Family Income Protector rider. The applicable annuity factor
depends upon the Annuitant's (and Joint Annuitant's, if any) sex (or without
regard to gender if required by law), age, and the Family Income Protector
payment option selected and is based on a guaranteed interest rate of 3% and the
"1983 Table a" mortality table improved to the year 2000 with projection Scale
G. Subsequent payments will be calculated as described in the Family
<PAGE>
Income Protector rider using a 5% assumed investment return. Subsequent payments
may fluctuate annually in accordance with the investment performance of the
annuity subaccounts. However, subsequent payments are guaranteed to never be
less than the initial payment.
The Minimum Annuitization Value and applicable annuity factor may be
applied to the following Family Income Protector payment options:
Life Income -- An election may be made for "No Period Certain" or "10 Years
Certain". In the event of the death of the Annuitant prior to the end of
the chosen period certain, the remaining period certain payments will be
continued to the beneficiary.
Joint and Full Survivor -- An election may be made for "No Period Certain"
or "10 Years Certain". Payments will be made as long as either the
Annuitant or Joint Annuitant is living. In the event of the death of both
the Annuitant and Joint Annuitant prior to the end of the chosen period
certain, the remaining period certain payments will be continued to the
beneficiary.
The Family Income Protector cannot be used with any other payment options.
GUARANTEED MINIMUM STABILIZED PAYMENTS. Annuity payments under the Family
Income Protector are guaranteed to never be less than the initial payment. The
payments will also be "stabilized" or held constant during each Policy Year.
During the first Policy Year following annuitization using the Family
Income Protector, each stabilized payment will equal the initial payment. On
each Policy Anniversary thereafter, the stabilized payment will increase or
decrease depending on the performance of the subaccounts selected, and then be
held constant at that amount for that Policy Year. The stabilized payment on
each Policy Anniversary will equal the greater of the initial payment or the
payment supportable by the annuity units in the selected subaccounts. The
supportable payment is equal to the number of variable annuity units in the
selected subaccounts multiplied by the variable annuity unit values in those
subaccounts on the date the payment is made. The variable annuity unit values
used to calculate the supportable payment will assume a 5% assumed investment
return. If the supportable payment at any payment date during a Policy Year is
greater than the stabilized payment for that Policy Year, the excess will be
used to purchase additional annuity units. Conversely, if the supportable
payment at any payment date during a Policy Year is less than the stabilized
payment for that Policy Year, there will be a reduction in the number of annuity
units credited to the Policy to fund the deficiency. In the case of a
reduction, you will not participate as fully in the future investment
performance of the subaccounts you selected since fewer annuity units are
credited to your Policy. Purchases and reductions will be allocated to each
subaccount on a proportionate basis.
PFL bears the risk that it will need to make payments if all annuity units
have been used in an attempt to maintain the stabilized payment at the initial
payment level. In such an event, PFL will make all future payments equal to the
initial payment. Once all the annuity units have been used, the amount of your
payment will not increase or decrease and will not depend upon the performance
of any subaccounts. To compensate PFL for this risk, a stabilized payment fee
will be deducted (discussed below).
<PAGE>
ANNUITY POLICY FEE TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
POLICY OWNER TRANSACTION EXPENSES | SEPARATE ACCOUNT ANNUAL EXPENSES
| (AS A PERCENTAGE OF ACCOUNT VALUE)
Sales Load On Purchase Payments.......... 0 | Mortality and Expense Risk Fee/(4)/........ 1.25%
Maximum Surrender Charge | Administrative Charge .................... 0.15%
(as a % of Premium | Distribution Financing Charge.............. 0.15%
Payment Surrendered)/(1)(2)/....... 7% |
Surrender Fees........................... 0 | TOTAL SEPARATE ACCOUNT
Annual Service Charge/(1)/............... $35 Per POlicy | ANNUAL EXPENSES.......................... 1.55%
Transfer Fee/(1)/........................ Currently No Fee |
Family Income Protector (optional)/(3)/ |
Rider Fee.......................... 0.30% |
Stabilized Payment Fee............. 1.25% |
</TABLE>
- -----------
/(1)/ The Surrender Charge and Transfer Fee, if any is imposed, applies to each
Policy, regardless of how the Policy Value is allocated among the Mutual
Fund Account, the Target Account and the Fixed Account. The annual Service
Charge is $35 per year, but not greater than 2% of the Policy Value. The
Service Charge applies to the Fixed Account, the Mutual Fund Account, and
the Target Account and is assessed on a pro rata basis relative to each
Account's Policy Value as a percentage of the Policy's total Policy Value.
The Service Charge is deducted on each Policy Anniversary and at the time
of surrender, if surrender occurs during a Policy Year. (See "CHARGES AND
DEDUCTIONS--Administrative Charges" p. 45.) There is no fee for the first
12 transfers per year. For additional transfers PFL may charge a fee of
$10 per transfer but currently does not charge for any transfers.
/(2)/ The Surrender Charge is decreased based on the number of years since the
premium payment date in which the withdrawal is made. The charge is a
percentage of the Premium Payment: 7%, 7%, 6%, 6%, 5%, 4% and 2%; for
years one through seven, respectively, after the Premium Payment was made.
If applicable a Surrender Charge will only be applied to withdrawals that
exceed the amount available under certain listed exceptions. (See "CHARGES
AND DEDUCTIONS--Surrender Charge," p. 44, and "DISTRIBUTIONS UNDER THE
POLICY--Surrenders," p. 35.)
/(3)/ The annual Family Income Protector Rider Fee is currently equal to 0.30%
of the Minimum Annuitization Value on the previous Policy Anniversary; PFL
may at its discretion change the rate in the future, but the rate will
never be greater than 0.50% per year. The Stabilized Payment Fee is only
charged if you annuitize under the Family Income Protector rider, and then
only after annuitization. This fee is reflected in the amount of the
variable payments. The Stabilized Payment Fee is currently equal to an
effective annual rate of 1.25% of the daily net asset value in the
variable investment options; PFL may at its discretion change the rate in
the future, but the rate will never be greater than 2.25% per year. Once
the Family Income Protector rider is added to your Policy, neither the
Rider Fee nor the Stabilized Payment Fee that is in effect at that time
will change during the life of that Family Income Protector rider.
/(4)/ The Mortality and Expense Risk Fees shown (1.25%) are for the 5% Annually
Compounding Death Benefit and the Double Enhanced Death Benefit. The
corresponding fee for the Return of Premium Death Benefit is 1.10% for
each Subaccount. (See "DISTRIBUTIONS UNDER THE POLICY--Death Benefit,"
p. 41.)
The Portfolio Annual Expense section, and the footnotes thereto, of the May 1,
1998 prospectus and the June 1, 1998 prospectus supplement remain applicable.
<PAGE>
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming the
optional Family Income Protector, a hypothetical 5% annual return on assets, and
assuming the entire Policy Value is in the applicable Subaccount:
<TABLE>
<CAPTION>
A = 5 % Annually Compounding Death Benefit B = Return of Premium Death Benefit
or the Double Enhanced Death Benefit
================================================================================================================
| IF THE POLICY IS ANNUITIZED AT
IF THE POLICY IS SURRENDERED | THE END OF THE APPLICABLE TIME PERIOD OR
AT THE END OF THE APPLICABLE | IF THE POLICY IS NOT SURRENDERED OR
TIME PERIOD. | ANNUITIZED.
====================================|==========================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS | 1 YEAR 3 YEARS 5 YEARS 10 YEARS
================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Endeavor Money Market A 95 132 179 285 25 79 135 285
Portfolio -----------------------------------------------------------------------------------
B 94 128 172 270 24 74 127 270
- ----------------------------------------------------------------------------------------------------------------
Endeavor Asset Allocation A 98 139 191 309 28 86 147 309
Portfolio -----------------------------------------------------------------------------------
B 96 135 184 294 26 81 139 294
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price International A 100 146 203 332 30 93 158 332
Stock Portfolio -----------------------------------------------------------------------------------
B 99 142 195 317 29 88 151 317
- ----------------------------------------------------------------------------------------------------------------
Endeavor Value Equity A 98 141 194 314 28 87 149 314
Portfolio -----------------------------------------------------------------------------------
B 97 136 186 299 27 83 142 299
- ----------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Value A 99 141 195 316 29 88 150 316
Portfolio -----------------------------------------------------------------------------------
B 97 137 187 301 27 83 143 301
- ----------------------------------------------------------------------------------------------------------------
Dreyfus U.S. Government A 97 138 189 305 27 85 145 305
Securities Portfolio -----------------------------------------------------------------------------------
B 96 134 182 290 26 80 137 290
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity A 99 142 196 319 29 89 152 319
Income Portfolio -----------------------------------------------------------------------------------
B 97 138 189 304 27 84 144 304
- ----------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth A 99 143 197 321 29 89 153 321
Stock Portfolio -----------------------------------------------------------------------------------
B 98 138 190 306 28 85 145 306
- ----------------------------------------------------------------------------------------------------------------
Endeavor Opportunity A 101 149 207 339 31 95 162 339
Value Portfolio -----------------------------------------------------------------------------------
B 99 144 199 325 29 91 155 325
- ----------------------------------------------------------------------------------------------------------------
Endeavor Enhanced Index A 102 153 214 354 32 99 169 354
Portfolio -----------------------------------------------------------------------------------
B 101 149 207 339 31 95 162 339
- ----------------------------------------------------------------------------------------------------------------
Endeavor Select 50 A 104 159 224 372 34 105 179 372
Portfolio -----------------------------------------------------------------------------------
B 103 155 216 358 33 101 172 358
- ----------------------------------------------------------------------------------------------------------------
Endeavor High Yield A 102 153 214 354 32 99 169 354
Portfolio -----------------------------------------------------------------------------------
B 101 149 207 339 31 95 162 339
- ----------------------------------------------------------------------------------------------------------------
WRL Growth Portfolio A 98 140 193 312 28 87 148 312
-----------------------------------------------------------------------------------
B 97 136 185 297 27 82 141 297
- ----------------------------------------------------------------------------------------------------------------
The Dow Target 10 A 102 153 214 354 32 99 169 354
Subaccount -----------------------------------------------------------------------------------
B 101 149 207 339 31 95 162 339
- ----------------------------------------------------------------------------------------------------------------
The Dow Target 5 A 102 153 214 354 32 99 169 354
Subaccount -----------------------------------------------------------------------------------
B 101 149 207 339 31 95 162 339
================================================================================================================
</TABLE>
The above table is intended to assist the Owner in understanding the costs and
expenses that will be borne, directly or indirectly. These include the 1997
expenses of the Underlying Funds, except amounts shown for the Endeavor Select
50 Portfolio, the Endeavor High Yield Portfolio, The Dow Target 10 and The Dow
Target 5 are estimates for 1998. (See "CHARGES AND DEDUCTIONS," p. 44, and the
Underlying Funds' prospectuses.) In addition to the expenses listed above,
premium taxes may be applicable.
<PAGE>
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
ASSUMED 5% ANNUAL RETURN IS PURELY HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE PERFORMANCE. The figures and data for
underlying fund annual expenses have been provided by the underlying funds and
while PFL does not dispute these figures, PFL has not independently verified
their accuracy.
In these examples, the $35 Annual Service Charge is reflected as a charge
of 0.0436% based on an estimated average Policy Value of $80,328. Normally, the
$35 Service Charge would be waived if the Premium Payment(s) less partial
withdrawals, or the Policy Value is at least $50,000. However, it was included
in these examples for illustrative purposes.
FAMILY INCOME PROTECTOR RIDER FEE. The risk assumed by PFL associated with
the Family Income Protector prior to annuitization is that the annuity benefits
payable under the Family Income Protector are greater than the annuity benefits
that would have been payable had the Owner selected another annuity benefit
permitted by the Policy. To compensate PFL for this risk, PFL charges an annual
Family Income Protector rider fee. Prior to annuitization, the Family Income
Protector rider fee is deducted from the Policy Value on each Policy Anniversary
and upon the termination of the Family Income Protector. The amount of the
Family Income Protector rider fee is equal to the rider fee percentage
multiplied by the Minimum Annuitization Value on the previous Policy
Anniversary. The rider fee percentage currently is 0.30%; PFL may, at its
discretion, change this rider fee percentage in the future but it will never be
greater than 0.50%, and once the Family Income Protector rider is added to your
Policy, the rider fee percentage will not vary during the life of that Family
Income Protector rider. The Family Income Protector rider fee is deducted from
each variable investment option in proportion to the amount of Policy Value in
each subaccount.
The Family Income Protector rider fee for any given Policy Anniversary will
be waived if the Policy Value on that Policy Anniversary exceeds the fee waiver
threshold multiplied by the Minimum Annuitization Value. The fee waiver
threshold is currently two times the Minimum Annuitization Value; PFL may, at
its discretion, change the fee waiver threshold in the future, but it will never
be greater than two and one-half times the Minimum Annuitization Value, and once
the Family Income Protector rider is added to your Policy, the fee waiver
threshold will not vary during the life of that Family Income Protector rider.
The Family Income Protector rider fee will not be deducted after annuitization.
STABILIZED PAYMENT FEE. Upon annuitization under the Family Income
Protector, a "stabilized payment" fee will be imposed to reflect PFL's
additional risk from the guaranteed minimum stabilized payments. PFL bears
substantial market risk in connection with the guaranteed minimum stabilized
payments since PFL guarantees that the annuity payments will never be less than
the initial payment regardless of the investment performance of the subaccounts
you select. This market risk is in addition to the mortality and expense risk
already borne by PFL. The stabilized payment fee is currently equal to an
effective annual rate of 1.25% of the daily net asset value in the variable
investment options; PFL may, at its discretion, change this stabilized payment
fee in the future but it will never be greater than 2.25%, and once the Family
Income Protector rider is added to your Policy, the stabilized payment fee will
not vary during the life of that Family Income Protector rider. The stabilized
payment fee is included in the "Mortality and Expense Risk Fee and
Administration Charge after the Election Date" percentage set forth on page one
of the Family Income Protector rider.
TERMINATION. The Family Income Protector is irrevocable. You have the
option not to use the Family Income Protector but there will be no refund of any
fees paid for the Family Income Protector. The Family Income Protector will
terminate upon the earliest of annuitization using either the Minimum
Annuitization Value or Policy Value, upgrade of Minimum Annuitization Value to
Policy Value, termination of the Policy, or 30 days after the Policy Anniversary
after your 94th birthday (or earlier if the laws of your state require an
earlier date). However, after an upgrade, a new Family Income Protector rider
takes effect, and if annuity payments are begun using the Family Income
Protector, then the benefits of guaranteed minimum stabilized payments (and the
stabilized payment fee) remain in effect for the life of the Policy.
<PAGE>
THE ENDEAVOR ML VARIABLE ANNUITY
ISSUED BY
PFL LIFE INSURANCE COMPANY
Supplement Dated December 18, 1998
To The
Prospectus Dated May 1, 1998
An optional rider for the Family Income Protector benefit has been added to
The Endeavor ML Variable Annuity. The rights and benefits under the Family
Income Protector are summarized below; however, the description of the Family
Income Protector contained in this prospectus supplement is qualified in its
entirety by reference to the rider itself, a copy of which is available upon
request from PFL.
All capitalized terms used, which are not defined in this supplement, shall
have the same meanings as the same terms used in the accompanying prospectus.
The Family Income Protector may not be available in all states at the date
of this supplement. Please contact PFL at (800) 525-6205 for additional
information regarding the availability of the Family Income Protector in your
state.
_______________
FAMILY INCOME PROTECTOR
You may elect to purchase this benefit, which guarantees the total amount
you will have to apply to a Family Income Protector payment option and which
guarantees the amounts of those payments once you begin to receive them. The
Family Income Protector assures you of a minimum level of income in the future
by guaranteeing a Minimum Annuitization Value (discussed below) after 10 years,
based on the Policy Value at the date the rider is issued (adjusted for any
withdrawals and applicable taxes and charges), increased by a guaranteed annual
growth rate. By electing the Family Income Protector, you can participate in the
gains of the underlying variable investment options you select while knowing
that you are guaranteed a minimum level of income in the future, regardless of
the performance of the underlying variable investment options.
You may elect to purchase the Family Income Protector at the time you
purchase the Policy or on subsequent Policy Anniversaries. A Family Income
Protector Rider Fee, currently 0.30% of the Minimum Annuitization Value is
charged prior to annuitization. You cannot begin to obtain payments under the
Family Income Protector until the tenth Policy Anniversary after it is added to
your Policy. A Stabilized Payment Fee, currently equal to an effective annual
rate of 1.25% of the daily net asset value in the variable investment options,
is reflected in the amount of the variable payments you receive if you annuitize
under the Family Income Protector rider.
THIS PROSPECTUS SUPPLEMENT MUST BE ACCOMPANIED
BY THE PROSPECTUS FOR
THE ENDEAVOR ML VARIABLE ANNUITY DATED MAY 1, 1998
<PAGE>
THE FAMILY INCOME PROTECTOR DOES NOT ESTABLISH OR GUARANTEE POLICY VALUE OR
GUARANTEE PERFORMANCE OF ANY INVESTMENT OPTION. Because this benefit is based on
conservative actuarial factors, the level of lifetime income that it guarantees
may often be less than the level that would be provided by application of the
Policy Value at otherwise applicable annuity factors. Therefore, the Family
Income Protector should be regarded as a safety net. As described herein under
"MIMIMUM ANNUITIZATION VALUE," withdrawals will reduce the Minimum Annuitization
Value, and may reduce the Minimum Annuitization Value on a basis greater than
dollar-for-dollar.
Hypothetical Illustration
- -------------------------
The amounts shown below are hypothetical guaranteed minimum monthly payment
amounts under the Family Income Protector for a $100,000 premium when annuity
payments do not begin until the rider anniversary indicated in the left-hand
column. These figures assume that there were no subsequent premium payments, or
withdrawals, that there were no premium taxes and that the $100,000 premium is
subject to the Family Income Protector. Six different annuity payment options
are illustrated: a male annuitant, a female annuitant and a joint and survivor
annuity, each on a Life Only and a Life with 10 Year Certain basis. These
hypothetical illustrations assume that the annuitant is (or both annuitants are)
60 years old when the rider is issued, that the annual growth rate is 6.0% (once
established an annual growth rate will not change during the life of the Family
Income Protector rider), and that there was no upgrade of the Minimum
Annuitization Value. The figures below, which are the amount of the first
monthly payment, are based on an assumed investment return of 3%. Subsequent
payments will never be less than the amount of the first payment (although
subsequent payments are calculated using a 5% assumed investment return).
Illustrations of guaranteed minimum payments based on other assumptions
will be provided upon request.
Life Only = Life Annuity with No Period Certain Life 10 = Life Annuity
with 10 Years Certain
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Rider Anniversary at Male Female Joint & Survivor
Exercise Date ------------------------------------------------------------------------------------------
Life Only Life 10 Life Only Life 10 Life Only Life 10
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 (age 70) $1,135 $1,067 $ 976 $ 949 $ 854 $ 852
- -------------------------------------------------------------------------------------------------------------------
15 1,833 1,634 1,562 1,469 1,332 1,318
- -------------------------------------------------------------------------------------------------------------------
20 (age 80) 3,049 2,479 2,597 2,286 2,145 2,078
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
This hypothetical illustration should not be deemed representative of past or
future performance of any underlying variable investment option.
Because the annuity payment options provided for in the Policy are based on
the Policy Value at the time you start receiving annuity payments, the amount of
those annuity payments may exceed the payments provided by the Family Income
Protector. Accordingly, you may elect to receive annuity payments from either
the Policy using the Policy Value or the Family Income Protector using the
Minimum Annuitization Value.
MIMIMUM ANNUITIZATION VALUE. On the rider date, the Minimum Annuitization
Value is the Policy Value. Thereafter, the Minimum Annuitization Value will be
the Policy Value on the date the rider is issued, plus any additional payments,
minus an adjustment for any withdrawals made after the date the rider is issued,
accumulated at the annual growth rate written on page one of the Family Income
Protector rider minus any premium taxes. The annual growth rate is currently 6%
per year; PFL may, at its discretion, change the rate in the future, but the
rate will never be less than 3% per year, and once the
<PAGE>
Family Income Protector rider is added to your Policy, the annual growth rate
will not vary during the life of that Family Income Protector rider.
Withdrawals will affect the Minimum Annuitization Value as follows: Each
Policy Year, withdrawals up to the limit of the total free amount (the Minimum
Annuitization Value on the last Policy Anniversary multiplied by the annual
growth rate) reduce the Minimum Annuitization Value on a dollar-for-dollar
basis. Withdrawals over this free amount will reduce the Minimum Annuitization
Value on a pro rata basis by an amount equal to the Minimum Annuitization Value
immediately prior to the excess withdrawal multiplied by the percentage
reduction in the Policy Value resulting from the excess withdrawal. The free
amount will always be a relatively small fraction of the Minimum Annuitization
Value.
The Minimum Annuitization Value may only be used to annuitize using the
Family Income Protector payment options (discussed below) and may not be used
with any of the annuitization options shown in the Policy.
The Minimum Annuitization Value is used solely for purposes of calculating
the Family Income Protector payment and does not establish or guarantee a Policy
Value or guarantee performance of any investment option.
MINIMUM ANNUITIZATION VALUE UPGRADE. Within 30 days after a Policy
Anniversary, you may elect to upgrade the Minimum Annuitization Value to the
Policy Value on that anniversary if the Policy Value is greater than the Minimum
Annuitization Value. The last date to elect to upgrade the Minimum
Annuitization Value is the Policy Anniversary immediately before your 85/(th)/
birthday. The laws of some states may require an earlier date. For your
convenience, the last date to upgrade will be set forth on page one of the
Family Income Protector rider.
Upon upgrading, the current Family Income Protector rider will terminate
and a new one will be issued with its own specified guaranteed benefits and
fees. The benefits and fees under the new rider may differ from your benefits
and fees prior to upgrading (the benefits and fees that may change include the
annual growth rate, the Family Income Protector rider fee, the fee waiver
threshold, the stabilized payment fee, and the waiting period before the Family
Income Protector can be exercised).
CONDITIONS OF EXERCISE OF THE FAMILY INCOME PROTECTOR. The Family Income
Protector may only be exercised within the 30 days immediately following the
tenth or later Policy Anniversary after the Family Income Protector is elected
or, in the case of an upgrade of the Minimum Annuitization Value, the tenth or
later Policy Anniversary following the upgrade; PFL may, at its discretion,
change the waiting period before the Family Income Protector can be exercised in
the future, but once the Family Income Protector rider is added to your Policy,
the waiting period will not vary during the life of that Family Income Protector
rider. For your convenience, the first date to exercise the Family Income
Protector will be set forth on page one of the Family Income Protector rider.
The Family Income Protector may not, however, be exercised after the Policy
Anniversary after your 94th birthday. The laws of some states may require an
earlier date. For your convenience, the last date to exercise the Family Income
Protector will be set forth on page one of the Family Income Protector rider.
If you annuitize your Policy at any time other than indicated above, the
Family Income Protector cannot be exercised and, accordingly, the Family Income
Protector will provide no benefits. For example, if you annuitized your Policy
twelve and one-half years after you purchased the Policy and Family Income
Protector rider, you would not be able to exercise the Family Income Protector
and use the Minimum Annuitization Value or receive guaranteed minimum stabilized
payments.
FAMILY INCOME PROTECTOR PAYMENT OPTIONS. The amount of the first payment
provided by the Family Income Protector will be determined by multiplying each
$1,000 of Minimum Annuitization Value to the applicable annuity factor shown on
Schedule I of the Family Income Protector
<PAGE>
rider. The applicable annuity factor depends upon the Annuitant's (and Joint
Annuitant's, if any) sex (or without regard to gender if required by law), age,
and the Family Income Protector payment option selected and is based on a
guaranteed interest rate of 3% and the "1983 Table a" mortality table improved
to the year 2000 with projection Scale G. Subsequent payments will be calculated
as described in the Family Income Protector rider using a 5% assumed investment
return. Subsequent payments may fluctuate annually in accordance with the
investment performance of the annuity subaccounts. However, subsequent payments
are guaranteed to never be less than the initial payment.
The Minimum Annuitization Value and applicable annuity factor may be
applied to the following Family Income Protector payment options:
Life Income -- An election may be made for "No Period Certain" or
"10 Years Certain". In the event of the death of the Annuitant
prior to the end of the chosen period certain, the remaining period
certain payments will be continued to the beneficiary.
Joint and Full Survivor -- An election may be made for "No Period
Certain" or "10 Years Certain". Payments will be made as long as
either the Annuitant or Joint Annuitant is living. In the event of
the death of both the Annuitant and Joint Annuitant prior to the end
of the chosen period certain, the remaining period certain payments
will be continued to the beneficiary.
The Family Income Protector cannot be used with any other payment options.
GUARANTEED MINIMUM STABILIZED PAYMENTS. Annuity payments under the Family
Income Protector are guaranteed to never be less than the initial payment. The
payments will also be "stabilized" or held constant during each Policy Year.
During the first Policy Year following annuitization using the Family
Income Protector, each stabilized payment will equal the initial payment. On
each Policy Anniversary thereafter, the stabilized payment will increase or
decrease depending on the performance of the subaccounts selected, and then be
held constant at that amount for that Policy Year. The stabilized payment on
each Policy Anniversary will equal the greater of the initial payment or the
payment supportable by the annuity units in the selected subaccounts. The
supportable payment is equal to the number of variable annuity units in the
selected subaccounts multiplied by the variable annuity unit values in those
subaccounts on the date the payment is made. The variable annuity unit values
used to calculate the supportable payment will assume a 5% assumed investment
return. If the supportable payment at any payment date during a Policy Year is
greater than the stabilized payment for that Policy Year, the excess will be
used to purchase additional annuity units. Conversely, if the supportable
payment at any payment date during a Policy Year is less than the stabilized
payment for that Policy Year, there will be a reduction in the number of annuity
units credited to the Policy to fund the deficiency. In the case of a
reduction, you will not participate as fully in the future investment
performance of the subaccounts you selected since fewer annuity units are
credited to your Policy. Purchases and reductions will be allocated to each
subaccount on a proportionate basis.
PFL bears the risk that it will need to make payments if all annuity units
have been used in an attempt to maintain the stabilized payment at the initial
payment level. In such an event, PFL will make all future payments equal to the
initial payment. Once all the annuity units have been used, the amount of your
payment will not increase or decrease and will not depend upon the performance
of any subaccounts. To compensate PFL for this risk, a stabilized payment fee
will be deducted (discussed below).
<PAGE>
ANNUITY POLICY FEE TABLE
<TABLE>
<CAPTION>
POLICY OWNER TRANSACTION EXPENSES SEPARATE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF ACCOUNT VALUE)
<S> <C> <C> <C>
Sales Load On Purchase Payments............. 0 Mortality and Expense Risk Fee/(4)/ 1.25%
Maximum Surrender Charge Administrative Charge .................... 0.15%
(as a % of Premium Distribution Financing Charge.............. 0.15%
Payment Surrendered)/(1)(2)/.......... 7%
Surrender Fees.............................. 0 TOTAL SEPARATE ACCOUNT
Annual Service Charge/(1)/.................. $35 Per Policy ANNUAL EXPENSES.......................... 1.55%
Transfer Fee/(1)/........................... Currently No Fee
Family Income Protector (optional)/(3)/
Rider Fee............................ 0.30%
Stabilized Payment Fee............... 1.25%
</TABLE>
- -------------------------
/(1)/ The Surrender Charge and Transfer Fee, if any is imposed, apply to each
Policy, regardless of how the Policy Value is allocated among the Mutual
Fund Account, the Target Account and the Fixed Account. The annual
Service Charge is $35 per year, but not greater than 2% of the Policy
Value. The Service Charge applies to the Fixed Account, the Mutual Fund
Account, and the Target Account and is assessed on a pro rata basis
relative to each Account's Policy Value as a percentage of the Policy's
total Policy Value. The Service Charge is deducted on each Policy
Anniversary and at the time of surrender, if surrender occurs during a
Policy Year. (See "CHARGES AND DEDUCTIONS--Administrative Charges,"
p. 47.) There is no fee for the first 12 transfers per year. For
additional transfers PFL may charge a fee of $10 per transfer but
currently does not charge for any transfers.
/(2)/ The Surrender Charge is decreased based on the number of years since the
premium payment date in which the withdrawal is made. The charge is a
percentage of the Premium Payment: 7%, 7%, 6%, 6%, 5%, 4% and 2%; for
years one through seven, respectively, after the Premium Payment was
made. If applicable, a Surrender Charge will only be applied to
withdrawals that exceed the amount available under certain listed
exceptions. (See "CHARGES AND DEDUCTIONS--Surrender Charge," p. 46, and
"DISTRIBUTIONS UNDER THE POLICIES--Surrenders," p. 36.)
/(3)/ The annual Family Income Protector Rider Fee is currently equal to 0.30%
of the Minimum Annuitization Value on the previous Policy Anniversary;
PFL may at its discretion change the rate in the future, but the rate
will never be greater than 0.50% per year. The Stabilized Payment Fee is
only charged if you annuitize under the Family Income Protector rider,
and then only after annuitization. This fee is reflected in the amount
of the variable payments. The Stabilized Payment Fee is currently equal
to an effective annual rate of 1.25% of the daily net asset value in the
variable investment options; PFL may at its discretion change the rate
in the future, but the rate will never be greater than 2.25% per year.
Once the Family Income Protector rider is added to your Policy, neither
the Rider Fee nor the Stabilized Payment Fee that is in effect at that
time will change during the life of that Family Income Protector rider.
/(4)/ The Mortality and Expense Risk Fees shown (1.25%) are for the 5%
Annually Compounding Death Benefit and the Double Enhanced Death
Benefit. The corresponding fee for the Return of Premium Death Benefit
is 1.10% for each Subaccount. (See "DISTRIBUTIONS UNDER THE POLICY--
Death Benefit," p. 43.)
The Portfolio Annual Expense section, and the footnotes thereto, of the May 1,
1998 prospectus and the June 1, 1998 prospectus supplement remain applicable.
<PAGE>
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming the
optional Family Income Protector, a hypothetical 5% annual return on assets, and
assuming the entire Policy Value is in the applicable Subaccount:
A = 5 % Annually Compounding Death Benefit B = Return of Premium Death
or the Double Enhanced Death Benefit Benefit
<TABLE>
<CAPTION>
IF THE POLICY IS ANNUITIZED AT
IF THE POLICY IS SURRENDERED THE END OF THE APPLICABLE TIME PERIOD OR
AT THE END OF THE APPLICABLE IF THE POLICY IS NOT SURRENDERED OR
TIME PERIOD. ANNUITIZED.
===============================================================================
1 3 5 10 1 3 5 10
YEAR YEARS YEARS YEARS YEAR YEARS YEARS YEARS
===================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Basic Value A 96 134 182 290 26 80 137 290
-----------------------------------------------------------------------------------
Focus Fund B 94 129 174 275 24 76 130 275
- -------------------------------------------------------------------------------------------------------------------
Merrill Lynch Developing A 102 152 212 349 32 98 167 349
-----------------------------------------------------------------------------------
Capital Markets Focus Fund B 100 147 204 335 30 94 160 335
- -------------------------------------------------------------------------------------------------------------------
Merrill Lynch High Current A 95 130 176 279 25 77 132 279
-----------------------------------------------------------------------------------
Income Fund B 93 126 169 264 23 72 124 264
- -------------------------------------------------------------------------------------------------------------------
Endeavor Money Market A 95 132 179 285 25 79 135 285
-----------------------------------------------------------------------------------
Portfolio B 94 128 172 270 24 74 127 270
- -------------------------------------------------------------------------------------------------------------------
Endeavor Asset Allocation A 98 139 191 309 28 86 147 309
-----------------------------------------------------------------------------------
Portfolio B 96 135 184 294 26 81 139 294
- -------------------------------------------------------------------------------------------------------------------
T. Rowe Price International A 100 146 203 332 30 93 158 332
-----------------------------------------------------------------------------------
Stock Portfolio B 99 142 195 317 29 88 151 317
- -------------------------------------------------------------------------------------------------------------------
Endeavor Value Equity A 98 141 194 314 28 87 149 314
-----------------------------------------------------------------------------------
Portfolio B 97 136 186 299 27 83 142 299
- -------------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Value A 99 141 195 316 29 88 150 316
-----------------------------------------------------------------------------------
Portfolio B 97 137 187 301 27 83 143 301
- -------------------------------------------------------------------------------------------------------------------
Dreyfus U.S. Government A 97 138 189 305 27 85 145 305
-----------------------------------------------------------------------------------
Securities Portfolio B 96 134 182 290 26 80 137 290
- -------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity A 99 142 196 319 29 89 152 319
-----------------------------------------------------------------------------------
Income Portfolio B 97 138 189 304 27 84 144 304
- -------------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth A 99 143 197 321 29 89 153 321
-----------------------------------------------------------------------------------
Stock Portfolio B 98 138 190 306 28 85 145 306
- -------------------------------------------------------------------------------------------------------------------
Endeavor Opportunity A 101 149 207 339 31 95 162 339
-----------------------------------------------------------------------------------
Value Portfolio B 99 144 199 325 29 91 155 325
- -------------------------------------------------------------------------------------------------------------------
Endeavor Enhanced Index A 102 153 214 354 32 99 169 354
-----------------------------------------------------------------------------------
Portfolio B 101 149 207 339 31 95 162 339
- -------------------------------------------------------------------------------------------------------------------
Endeavor Select 50 A 104 159 224 372 34 105 179 372
-----------------------------------------------------------------------------------
Portfolio B 103 155 216 358 33 101 172 358
- -------------------------------------------------------------------------------------------------------------------
Endeavor High Yield A 102 153 214 354 32 99 169 354
-----------------------------------------------------------------------------------
Portfolio B 101 149 207 339 31 95 162 339
- -------------------------------------------------------------------------------------------------------------------
WRL Growth Portfolio A 98 140 193 312 28 87 148 312
-----------------------------------------------------------------------------------
B 97 136 185 297 27 82 141 297
- -------------------------------------------------------------------------------------------------------------------
The Dow Target 10 A 102 153 214 354 32 99 169 354
-----------------------------------------------------------------------------------
Subaccount B 101 149 207 339 31 95 162 339
- -------------------------------------------------------------------------------------------------------------------
The Dow Target 5 A 102 153 214 354 32 99 169 354
-----------------------------------------------------------------------------------
Subaccount B 101 149 207 339 31 95 162 339
===================================================================================================================
</TABLE>
<PAGE>
The above table is intended to assist the Owner in understanding the costs and
expenses that will be borne, directly or indirectly. These include the 1997
expenses of the Underlying Funds, except amounts shown for the Endeavor Select
50 Portfolio, the Endeavor High Yield Portfolio, The Dow Target 10 and The Dow
Target 5 are estimates for 1998. (See "CHARGES AND DEDUCTIONS," p. 45, and the
Underlying Funds' prospectuses.) In addition to the expenses listed above,
premium taxes may be applicable.
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
ASSUMED 5% ANNUAL RETURN IS PURELY HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE PERFORMANCE. The figures and data for
underlying fund annual expenses have been provided by the underlying funds and
while PFL does not dispute these figures, PFL has not independently verified
their accuracy.
In these examples, the $35 Annual Service Charge is reflected as a charge of
0.0436% based on an estimated average Policy Value of $80,328. Normally, the $35
Service Charge would be waived if the Premium Payment(s) less partial
withdrawals, or the Policy Value is at least $50,000. However, it was included
in these examples for illustrative purposes.
FAMILY INCOME PROTECTOR RIDER FEE. The risk assumed by PFL associated with the
Family Income Protector prior to annuitization is that the annuity benefits
payable under the Family Income Protector are greater than the annuity benefits
that would have been payable had the Owner selected another annuity benefit
permitted by the Policy. To compensate PFL for this risk, PFL charges an annual
Family Income Protector rider fee. Prior to annuitization, the Family Income
Protector rider fee is deducted from the Policy Value on each Policy Anniversary
and upon the termination of the Family Income Protector. The amount of the
Family Income Protector rider fee is equal to the rider fee percentage
multiplied by the Minimum Annuitization Value on the previous Policy
Anniversary. The rider fee percentage currently is 0.30%; PFL may, at its
discretion, change this rider fee percentage in the future but it will never be
greater than 0.50%, and once the Family Income Protector rider is added to your
Policy, the rider fee percentage will not vary during the life of that Family
Income Protector rider. The Family Income Protector rider fee is deducted from
each variable investment option in proportion to the amount of Policy Value in
each subaccount.
The Family Income Protector rider fee for any given Policy Anniversary will
be waived if the Policy Value on that Policy Anniversary exceeds the fee waiver
threshold multiplied by the Minimum Annuitization Value. The fee waiver
threshold is currently two times the Minimum Annuitization Value; PFL may, at
its discretion, change the fee waiver threshold in the future, but it will never
be greater than two and one-half times the Minimum Annuitization Value, and once
the Family Income Protector rider is added to your Policy, the fee waiver
threshold will not vary during the life of that Family Income Protector rider.
The Family Income Protector rider fee will not be deducted after annuitization.
STABILIZED PAYMENT FEE. Upon annuitization under the Family Income Protector,
a "stabilized payment" fee will be imposed to reflect PFL's additional risk from
the guaranteed minimum stabilized payments. PFL bears substantial market risk in
connection with the guaranteed minimum stabilized payments since PFL guarantees
that the annuity payments will never be less than the initial payment regardless
of the investment performance of the subaccounts you select. This market risk is
in addition to the mortality and expense risk already borne by PFL. The
stabilized payment fee is currently equal to an effective annual rate of 1.25%
of the daily net asset value in the variable investment options; PFL may, at its
discretion, change this stabilized payment fee in the future but it will never
be greater than 2.25%, and once the Family Income Protector rider is added to
your Policy, the stabilized payment fee will not vary during the life of that
Family Income Protector rider. The stabilized payment fee is included in the
"Mortality and Expense Risk Fee and Administration Charge after the Election
Date" percentage set forth on page one of the Family Income Protector rider.
<PAGE>
TERMINATION. The Family Income Protector is irrevocable. You have the option
not to use the Family Income Protector but there will be no refund of any fees
paid for the Family Income Protector. The Family Income Protector will
terminate upon the earliest of annuitization using either the Minimum
Annuitization Value or Policy Value, upgrade of Minimum Annuitization Value to
Policy Value, termination of the Policy, or 30 days after the Policy Anniversary
after your 94/(th)/ birthday (or earlier if the laws of your state require an
earlier date). However, after an upgrade, a new Family Income Protector rider
takes effect, and if annuity payments are begun using the Family Income
Protector, then the benefits of guaranteed minimum stabilized payments (and the
stabilized payment fee) remain in effect for the life of the Policy.
