EQUITRUST LIFE ANNUITY ACCOUNT, N-4, 1998-02-19

EQUITRUST LIFE ANNUITY ACCOUNT
N-4, 1998-02-19

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 19, 1998

FILE NO.
FILE NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
PRE-EFFECTIVE AMENDMENT NO. _____ / /
POST-EFFECTIVE AMENDMENT NO. / /

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /

AMENDMENT NO. / /
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EQUITRUST LIFE ANNUITY ACCOUNT
(Exact Name of Registrant)

EQUITRUST LIFE INSURANCE COMPANY
(Name of Depositor)

5400 University Avenue
West Des Moines, Iowa 50266
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number: 1-800-247-4170

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STEPHEN M. MORAIN, ESQUIRE
5400 University Avenue
West Des Moines, Iowa 50266
(Name and Address of Agent for Service of Process)

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COPY TO:
STEPHEN E. ROTH, ESQUIRE
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS
SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT.

SECURITIES BEING OFFERED: FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY CONTRACTS.

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

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<PAGE>
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>
CROSS REFERENCE SHEET
PURSUANT TO RULES 481(a) AND 495(a)

Showing location in Part A (prospectus) and Part B (statement of additional
information) of registration statement of information required by Form N-4

PART A

<TABLE>
<CAPTION>
ITEM OF FORM N-4 PROSPECTUS CAPTION
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<C> <S> <C>
1. Cover Page......................... Cover Page
2. Definitions........................ Definitions
3. Synopsis........................... Expense Tables; Summary
4. Condensed Financial Information.... Condensed Financial Information; Yields and Total Returns
5. General
(a) Depositor...................... EquiTrust Life Insurance Company
(b) Registrant..................... EquiTrust Life Annuity Account
(c) Portfolio Company.............. Investment Options
(d) Fund Prospectus................ Investment Options
(e) Voting Rights.................. Voting Rights
(f) Administrators................. N/A
6. Deductions and Expenses
(a) General........................ Charges and Deductions; Summary
(b) Sales Load %................... Charges and Deductions; Summary
(c) Special Purchase Plan.......... N/A
(d) Commissions.................... Distribution of the Contracts
(e) Expenses -- Registrant......... Charges and Deductions; Summary
(f) Fund Expenses.................. Investment Options; Charges and Deductions
(g) Organizational Expenses........ N/A
7. Contracts
(a) Persons with Rights............ Summary; Addition, Deletion or Substitution of Investments; Description of
Annuity Contract; Payment Options; Voting Rights
(b) (i) Allocation of Purchase
Payments..................... Summary; Premiums; Free-Look Period; Allocation of Premiums
(ii) Transfers..................... Summary; Transfer Privilege
(iii) Exchanges.................... Transfers, Assignments or Exchanges of a Contract
(c) Changes........................ Additions, Deletions or Substitutions of Investments; Description of Annuity
Contract; Modification;
(d) Inquiries...................... Cover page; Inquiries
8. Annuity Period..................... Summary; Payment Options
9. Death Benefit...................... Death Benefit Before the Retirement Date; Death Benefit After the Retirement
Date
10. Purchases and Contract Value
(a) Purchases...................... Summary; Issuance of a Contract; Premiums; Free Look Period; Allocation of
Premiums; Variable Cash Value;
(b) Valuation...................... Definitions; Variable Cash Value;
(c) Daily Calculation.............. Definitions; Variable Cash Value;
(d) Underwriter.................... Issuance of a Contract; Distribution of the Contracts
11. Redemptions
(a) -- By Owners................... Summary; Transfer Privilege; Surrenders and Partial Surrenders; Proceeds on the
Retirement Date; Payments; Payment Options; Federal Tax Matters
-- By Annuitant.................... Summary; Transfer Privilege; Surrenders and Partial Surrenders; Proceeds on the
Retirement Date; Payments; Payment Options; Federal Tax Matters
(b) Taxes ORP...................... N/A
(c) Check Delay.................... Payments
(d) Lapse.......................... N/A
(e) Free Look...................... Summary; Free Look Period
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
12. Taxes.............................. Summary; Federal Tax Matters
13. Legal Proceedings.................. Legal Proceedings
14. Table of Contents for the Statement Statement of Additional Information
of Additional Information......... Table of Contents
</TABLE>

PART B

<TABLE>
<CAPTION>
ITEM OF FORM N-4 PART B CAPTION
- ----------------------------------------- --------------------------------------------------------------------------------
<C> <S> <C>
15. Cover Page......................... Cover Page
16. Table of Contents.................. Table of Contents
17. General Information and History.... General Information About the Company
18. Services
(a) Fees and Expenses of N/A
Registrant........................
(b) Management Contracts........... N/A
(c) Custodian...................... N/A
Independent Public Accountant...... Experts
(d) Assets of Registrant........... N/A
(e) Affiliated Persons............. N/A
(f) Principal Underwriter.......... Distribution of the Contracts (prospectus)
19. Purchase of Securities
Being Offered...................... Distribution of the Contracts (prospectus)
Offering Sales Load................ N/A
20. Underwriters....................... Distribution of the Contracts (prospectus)
21. Calculation of Performance Data.... Calculation of Yields and Total Returns; Yields and Total Returns (prospectus)
22. Annuity Payments................... Payment Options (prospectus)
23. Financial Statements............... Financial Statements
</TABLE>

PART C -- OTHER INFORMATION

<TABLE>
<CAPTION>
ITEM OF FORM N-4 PART C CAPTION
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<C> <S> <C>
24. Financial Statements and
Exhibits.......................... Financial Statements and Exhibits
(a) Financial Statements........... (a) Financial Statements
(b) Exhibits....................... (b) Exhibits
25. Directors and Officers of the
Depositor......................... Directors and Officers of EquiTrust Life Insurance Company
26. Persons Controlled By or Under
Common Control with the Depositor
or Registrant..................... Persons Controlled By or In Common Control with the Depositor or Registrant
27. Number of Contractowners........... Number of owners
28. Indemnification.................... Indemnification
29. Principal Underwriters............. Principal Underwriter
30. Location of Accounts and Records... Location of Books and Records
31. Management Services................ Management Services
32. Undertakings....................... Undertakings and Representations
Signature Page..................... Signatures
</TABLE>
<PAGE>
[LOGO]

VARIABLE ANNUITY
July , 1998

Prospectus for:

Flexible Premium Deferred Variable
Annuity Contracts

issued by
EquiTrust Life
Insurance Company
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Call Toll-Free
1-888-349-4656
(Des Moines)
<PAGE>
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TABLE OF CONTENTS
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PAGE

DEFINITIONS................................................................ 3

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EXPENSE TABLES............................................................. 4

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SUMMARY.................................................................... 6

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THE COMPANY, ACCOUNT AND INVESTMENT OPTIONS................................ 7

EquiTrust Life Insurance Company................................ 7

EquiTrust Life Annuity Account.................................. 7

Investment Options.............................................. 8

Addition, Deletion or Substitution of Investments............... 9

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DESCRIPTION OF ANNUITY CONTRACT............................................ 10

Issuance of a Contract.......................................... 10

Premiums........................................................ 10

Free-Look Period................................................ 10

Allocation of Premiums.......................................... 10

Variable Accumulated Value...................................... 11

Transfer Privilege.............................................. 12

Partial Withdrawals and Surrenders.............................. 12

Death Benefit Before the Retirement Date........................ 13

Special Transfer and Withdrawal Options......................... 14

Death Benefit After the Retirement Date......................... 14

Proceeds on the Retirement Date................................. 14

Payments........................................................ 15

Modification.................................................... 15

Reports to Owners............................................... 15

Inquiries....................................................... 15

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THE DECLARED INTEREST OPTION............................................... 16

Minimum Guaranteed and Current Interest Rates................... 16

Transfers From Declared Interest Option......................... 16

Payment Deferral................................................ 17

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CHARGES AND DEDUCTIONS..................................................... 17

Surrender Charge (Contingent Deferred Sales Charge)............. 17

Annual Administrative Charge.................................... 18

Transfer Processing Fee......................................... 18

Mortality and Expense Risk Charge............................... 18

Investment Option Expenses...................................... 18

Premium Taxes................................................... 18

Other Taxes..................................................... 18

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PAYMENT OPTIONS............................................................ 19

Election of Options............................................. 19

Description of Options.......................................... 19

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YIELDS AND TOTAL RETURNS................................................... 20

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FEDERAL TAX MATTERS........................................................ 21

Introduction.................................................... 21

Tax Status of the Contract...................................... 22

Taxation of Annuities........................................... 23

Transfers, Assignments or Exchanges of a Contract............... 25

Withholding..................................................... 25

Multiple Contracts.............................................. 25

Taxation of Qualified Plans..................................... 25

Possible Charge for the Company's Taxes......................... 26

Other Tax Consequences.......................................... 27

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DISTRIBUTION OF THE CONTRACTS.............................................. 27

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LEGAL PROCEEDINGS.......................................................... 27

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VOTING RIGHTS.............................................................. 27

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FINANCIAL STATEMENTS....................................................... 28

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STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS...................... 29

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2
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DEFINITIONS
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<TABLE>
<S> <C>
ACCOUNT.................. EquiTrust Life Annuity Account.
ACCUMULATED VALUE........ The total amount invested under the Contract. It
is the sum of the values of the Contract in each
Subaccount of the Account plus the value of the
Contract in the Declared Interest Option.
ANNUITANT................ The person or persons whose life (or lives)
determines the annuity benefits payable under the
Contract and whose death determines the death
benefit.
BENEFICIARY.............. The person to whom the proceeds payable on the
death of the owner/annuitant will be paid.
BUSINESS DAY............. Each day that the New York Stock Exchange is open
for trading, except the day after Thanksgiving,
the Thursday before Christmas (in 1998) and any
day on which the Home Office is closed because of
a weather-related or comparable type of emergency
and is unable to segregate orders and redemption
requests received on that day.
THE CODE................. The Internal Revenue Code of 1986, as amended.
CONTRACT ANNIVERSARY..... Same date in each Contract Year as the Contract
Date.
CONTRACT DATE............ The date on which a properly completed application
is received by the Company at the Home Office. It
is the date set forth on the data page of the
Contract which is used to determine Contract Years
and Contract Anniversaries.
CONTRACT YEAR............ A twelve-month period beginning on the Contract
Date or on a Contract Anniversary.
DECLARED INTEREST An investment option under the Contract funded by
OPTION.................. the Company's General Account. It is not part of,
nor dependent upon, the investment performance of
the Account.
DUE PROOF OF DEATH....... Proof of death satisfactory to the Company. Such
proof may consist of the following if acceptable
to the Company:
(a) a certified copy of the death certificate;
(b) a certified copy of a court decree reciting a
finding of death; or
(c) any other proof satisfactory to the Company.
FUND..................... An open-end diversified management investment
company in which the Account invests.
GENERAL ACCOUNT.......... The assets of the Company other than those
allocated to the Account or any other separate
account of the Company.
HOME OFFICE.............. The principal offices of the Company at 5400
University Avenue, West Des Moines, Iowa 50266.
INVESTMENT OPTION........ A separate investment portfolio of a Fund.
NET ACCUMULATED VALUE.... The accumulated value less any applicable
surrender charge.
NON-QUALIFIED CONTRACT... A Contract that is not a "Qualified Contract."
OWNER.................... The person who owns the Contract and who is
entitled to exercise all rights and privileges
provided in the Contract.
QUALIFIED CONTRACT....... A Contract that is issued in connection with plans
that qualify for special federal income tax
treatment under Sections 401, 403(b) or 408 of the
Code.
RETIREMENT DATE.......... The date when the accumulated value will be
applied under a payment option, if the annuitant
is still living.
SEC...................... U.S. Securities and Exchange Commission.
SUBACCOUNT............... A subdivision of the Account, the assets of which
are invested in a corresponding Investment Option.
VALUATION PERIOD......... The period that starts at the close of business
(3:00 p.m. central time) on one Business Day and
ends at the close of business on the next
succeeding Business Day.
WRITTEN NOTICE........... A written request or notice in a form satisfactory
to the Company which is signed by the owner and
received at the Home Office.
</TABLE>

3
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EXPENSE TABLES
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The following expense information assumes that the entire accumulated value is
variable accumulated value.

<TABLE>
<S> <C>
OWNER TRANSACTION EXPENSES
Sales Charge Imposed on Premiums................ None
Surrender Charge (contingent deferred sales
charge) as a percentage of the amount
surrendered....................................
</TABLE>

<TABLE>
<CAPTION>
CONTRACT YEAR* SURRENDER CHARGE
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<S> <C>
1.................. 8.5%
2.................. 8
3.................. 7.5
4.................. 7
5.................. 6.5
6.................. 6
7.................. 5
8.................. 3
9.................. 1
10.................. 0
</TABLE>

* After the first Contract Year, the owner may make partial withdrawals of up to
10% of the accumulated value on the most recent Contract Anniversary without
incurring a surrender charge. If the Contract is subsequently surrendered
during the Contract Year, a surrender charge will be applied to the partial
withdrawals taken. The amount that may be withdrawn without incurring a
surrender charge is NOT cumulative from Contract Year to Contract Year.

<TABLE>
<S> <C>
Transfer Processing Fee......................... None*
</TABLE>

* The Company does not charge a fee for the first twelve transfers in a Contract
Year. The Company may charge $25 for each subsequent transfer in a Contract
Year.

<TABLE>
<S> <C>
ANNUAL ADMINISTRATIVE CHARGE...................... $ 45

ACCOUNT ANNUAL EXPENSES (as a percentage of
average net assets)
Mortality and Expense Risk Charge............... 1.40%
Other Account Expenses.......................... None
Total Account Expenses........................ 1.40%
</TABLE>

ANNUAL INVESTMENT OPTION EXPENSES (as a percentage of average net assets)

<TABLE>
<CAPTION>
ADVISORY OTHER TOTAL
INVESTMENT OPTION FEE EXPENSES EXPENSES
- -------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
EquiTrust Variable Insurance Series Fund
Value Growth....................................
High Grade Bond.................................
High Yield Bond.................................
Blue Chip.......................................
Money Market....................................

................................
................................
..........................................
........................................
...................................

...............................
...................................
............................
...................................
.................................
</TABLE>

The above tables are intended to assist the owner of
a Contract in understanding the costs and expenses
that he or she will bear directly or indirectly. The
tables reflect the expenses for the Account based on
the actual expenses for each Investment Option

4
<PAGE>
for the 1997 fiscal year. For a more complete
description of the various costs and expenses see
"Charges and Deductions" and the prospectus for each
Investment Option which accompany this Prospectus.

EXAMPLES: An owner would pay the following expenses on a $1,000 investment,
assuming a 5% annual return on assets:

1. If the Contract is surrendered or is annuitized at the end of the
applicable time period:

<TABLE>
<CAPTION>
3 5 10
SUBACCOUNT 1 YEAR YEARS YEARS YEARS
- -------------------------------------------------- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Value Growth......................................
High Grade Bond...................................
High Yield Bond...................................
Money Market......................................
Blue Chip.........................................
..................................
..................................
............................................
..........................................
.....................................
.................................
.....................................
..............................
</TABLE>

2. If the Contract is not surrendered or annuitized at the end of the
applicable time period:

The examples provided above assume that no transfer
charges or premium taxes have been assessed. The
examples also assume that the annual administrative
charge is $45 and that the accumulated value per
contract is $10,000, which translates the
administrative charge into an assumed .45% charge
for the purposes of the examples based on a $1,000
investment.

THE EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. THE
ASSUMED 5% ANNUAL RATE OF RETURN IS HYPOTHETICAL AND
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS
THAN THIS ASSUMED RATE.

5
<PAGE>
[INFORMATION AND FOOTNOTES ON ADDITIONAL INVESTMENT
OPTIONS TO BE PROVIDED BY AMENDMENT.]

6
<PAGE>
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SUMMARY
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THE CONTRACT ISSUANCE OF A CONTRACT. Contracts may be sold in
connection with retirement plans which may or may
not qualify for special federal tax treatment under
the Code. There is no maximum age for owners on the
Contract date. (See "Issuance of a Contract.")

FREE-LOOK PERIOD. The owner has the right to return
the Contract within 20 days after he or she receives
it. The returned Contract will become void. The
Company will return to the owner an amount equal to
the greater of the premiums paid or the accumulated
value on the date the returned Contract is received
at the Home Office plus administrative charges and
charges deducted from the Account. (See "Free-Look
Period.")

PREMIUMS. The minimum amount which the Company will
accept as an initial premium is $1,000 for Qualified
Contracts and $5,000 for non-Qualified Contracts.
Subsequent premiums of not less than $50 may be paid
under the Contract. (See "Premiums.")

ALLOCATION OF PREMIUMS. Premiums under a Contract
will be allocated, as designated by the owner, to
one or more Subaccounts, the Declared Interest
Option, or both. The initial premium will be
allocated to the Money Market Subaccount for a
10-day period following the Contract date. At the
end of that period, the amount in the Money Market
Subaccount will be allocated among the Subaccounts
and the Declared Interest Option in accordance with
the owner's percentage allocation in the
application. The assets of each Subaccount will be
invested solely in a corresponding Investment
Option. The accumulated value, except for amounts in
the Declared Interest Option, will vary according to
the investment performance of the Investment Option
in which the selected Subaccounts are invested.
Interest will be credited to amounts in the Declared
Interest Option at a guaranteed minimum rate of 3%
per year, or a higher current interest rate declared
by the Company. (See "Allocation of Premiums.")

TRANSFERS. On or before the retirement date, the
owner may transfer all or part of the amount in a
Subaccount or the Declared Interest Option to
another Subaccount or the Declared Interest Option
subject to certain restrictions.

The total amount transferred each time must be at
least $100 or the entire amount in the Subaccount,
if less. Transfers out of the Declared Interest
Option must be for no more than 25% of the
accumulated value in that option. No fee is
currently charged for the first twelve transfers
during a Contract year, but the Company may assess a
transfer processing fee of $25 for each subsequent
transfer during a Contract year. (See "Transfer
Privilege.")

PARTIAL WITHDRAWAL. Upon written notice at any time
before the retirement date, the owner may withdraw
part of the accumulated value subject to certain
limitations. (See "Partial Withdrawals.")

SURRENDER. Upon written notice received on or before
the retirement date, the owner may surrender the
Contract and receive its net accumulated value. (See
"Surrender.")
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CHARGES AND DEDUCTIONS The following charges and deductions are assessed
under the Contract:

SURRENDER CHARGE (CONTINGENT DEFERRED SALES CHARGE).
No charge for sales expense is deducted from
premiums at the time premiums are paid. However, if
a Contract has not been in force for nine full
Contract years, upon surrender, partial withdrawal
or the application of the accumulated value to
certain payment options under certain circumstances,
a surrender charge is deducted from the amount
surrendered, withdrawn or from the remaining
accumulated value.

7
<PAGE>
For the first Contract year, the charge is 8.5% of
the amount surrendered. Thereafter, the surrender
charge decreases each subsequent Contract Year. In
no event will the total surrender charge on any
Contract exceed 8.5% of the total premiums paid
under the Contract. (See "Charge for Partial
Withdrawal or Surrender.")

Subject to certain restrictions, for partial
withdrawals in each Contract year after the first
Contract year, up to 10% of the accumulated value on
the most recent Contract Anniversary may be
withdrawn without a current surrender charge. If the
Contract is subsequently surrendered during the
Contract Year, a surrender charge will be applied to
partial withdrawals taken. (See "Amounts Not Subject
to Surrender Charge.") The surrender charge may be
waived as provided in the Contracts. (See "Waiver of
Surrender Charge.")

ANNUAL ADMINISTRATIVE CHARGE. On the Contract date
and on each Contract anniversary prior to the
retirement date, the Company deducts an annual
administrative charge of $45 from the accumulated
value. (See "Annual Administrative Charge.")

MORTALITY AND EXPENSE RISK CHARGE. The Company
deducts a daily mortality and expense risk charge to
compensate it for assuming certain mortality and
expense risks. The charge is deducted from the
assets of the Account at an annual rate of 1.40%
(approximately 1.01% for mortality risk and 0.39%
for expense risks). (See "Mortality and Expense Risk
Charge.")
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ANNUITY PROVISIONS On the retirement date, the accumulated value (less
any applicable surrender charge) will be applied
under a payment option, unless the owner chooses to
receive the net accumulated value in a lump sum.
Payments under these options do not depend upon the
Account's performance. (See "Payment Options.")
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FEDERAL TAX MATTERS Generally, a distribution (including a surrender,
partial withdrawal or death benefit payment) may
result in taxable income. In certain circumstances,
a 10% penalty tax may apply. For further discussion
of the federal income status of variable annuity
contracts, see "Federal Tax Matters."
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THE COMPANY, ACCOUNT AND INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
EQUITRUST LIFE INSURANCE COMPANY
The Company is a stock life insurance company
incorporated in the State of Iowa on June 3, 1996.
The Company is principally engaged in the offering
of life insurance policies and annuity contracts and
is admitted to do business in 38 states--Alabama,
Alaska, Arizona, Arkansas, California, Colorado,
Delaware, Florida, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Louisiana, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Mexico, North Carolina, North Dakota,
Ohio, Oklahoma, Oregon, South Carolina, South
Dakota, Tennessee, Texas, Utah, Virginia,
Washington, Wisconsin and Wyoming. The principal
offices of the Company are at 5400 University
Avenue, West Des Moines, Iowa 50266
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EQUITRUST LIFE ANNUITY ACCOUNT
The Account was established by the Company as a
separate account on January 6, 1998. The Account
will receive and invest premiums paid under the
Contracts. In addition, the Account may receive and
invest premiums for any other variable annuity
contracts issued in the future by the Company.

Although the assets in the Account are the property
of the Company, the assets in the Account
attributable to the Contracts are not chargeable
with liabilities arising out of any other business
which the Company may conduct. The assets of the
Account are available to cover the general
liabilities of the Company only to the extent that
the Account's assets exceed its liabilities arising
under the Contracts and any other contracts
supported by the Account. The Company has the right
to transfer to the general account any assets of the
Account which are in excess of such reserves and
other contract liabilities. All obligations arising
under the Contracts are general corporate
obligations of the Company.

8
<PAGE>
The Account currently is divided into fifteen
Subaccounts but may, in the future, include
additional subaccounts. Each Subaccount invests
exclusively in shares of a single corresponding
Investment Option. Income and realized and
unrealized gains or losses from the assets of each
Subaccount are credited to or charged against that
Subaccount without regard to income, gains or losses
from any other Subaccount.

9
<PAGE>

The Account has been registered as a unit investment
trust under the Investment Company Act of 1940 (the
"1940 Act") and meets the definition of a separate
account under the federal securities laws.
Registration with the Securities and Exchange
Commission does not involve supervision of the
management or investment practices or policies of
the Account or the Company by the SEC. The Account
is also subject to the laws of the State of Iowa
which regulate the operations of insurance companies
domiciled in Iowa.
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INVESTMENT OPTIONS The Account invests in shares of the Investment
Options. The Investment Options currently include
the Value Growth Portfolio, High Grade Bond
Portfolio, High Yield Bond Portfolio, Money Market
Portfolio and Blue Chip Portfolio of EquiTrust
Variable Insurance Series Fund.
Portfolio,
Portfolio, Portfolio, Portfolio and
Portfolio of and
the Portfolio,
Portfolio, Portfolio,
Portfolio and Portfolio
of . The Account may, in the future,
provide for additional investment options. Each
Investment Option has its own investment objectives
and the income and losses for each Investment Option
will be determined separately.

The investment objectives and policies of each
Investment Option are summarized below. There is no
assurance that any Investment Option will achieve
its stated objectives. More detailed information,
including a description of risks and expenses, may
be found in the prospectus for each Investment
Option, which must accompany or precede this
Prospectus and which should be read carefully and
retained for future reference.

EQUITRUST VARIABLE INSURANCE SERIES FUND

VALUE GROWTH PORTFOLIO. This Portfolio seeks long-term capital appreciation.
The Portfolio pursues this objective by investing primarily in equity
securities of companies that the investment adviser believes have a
potential to earn a high return on capital and/or in equity securities that
the investment adviser believes are undervalued by the market place. Such
equity securities may include common stock, preferred stock and securities
convertible or exchangeable into common stock.

HIGH GRADE BOND PORTFOLIO. This Portfolio seeks as high a level of current
income as is consistent with an investment in a high grade portfolio of debt
securities. The Portfolio will pursue this objective by investing primarily
in debt securities rated AAA, AA or A by Standard & Poor's or Aaa, Aa or A
by Moody's Investors Service, Inc. and in securities issued or guaranteed by
the United States government or its agencies or instrumentalities.

HIGH YIELD BOND PORTFOLIO. This Portfolio seeks as a primary objective, as
high a level of current income as is consistent with investment in a
portfolio of fixed-income securities rated in the lower categories of
established rating services. As a secondary objective, the Portfolio seeks
capital appreciation when consistent with its primary objective. The
Portfolio pursues these objectives by investing primarily in fixed-income
securities rated Baa or lower by Moody's Investors Service, Inc. and/or BBB
or lower by Standards & Poor's, or in unrated securities of comparable
quality. AN INVESTMENT IN THIS PORTFOLIO MAY ENTAIL GREATER THAN ORDINARY
FINANCIAL RISK. (See the Fund Prospectus "Principal Risk Factors--Special
Considerations--High Yield Bonds.")

MONEY MARKET PORTFOLIO. This Portfolio seeks maximum current income
consistent with liquidity and stability of principal. The Portfolio will
pursue this objective by investing in high quality short-term money market
instruments. AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED
NOR GUARANTEED BY THE U .S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE
MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE.

BLUE CHIP PORTFOLIO. This Portfolio seeks growth of capital and income. The
Portfolio pursues this objective by investing primarily in common stocks of
well-capitalized, established companies. Because this Portfolio may be
invested heavily in particular stocks or industries, an investment in this
Portfolio may entail relatively greater risk of loss.

8
<PAGE>
EquiTrust Variable Insurance Series Fund currently
sells shares only to the Account and to separate
accounts of the Company supporting other variable
life insurance policies and variable annuity
contracts. EquiTrust Variable Insurance Series Fund
may in the future sell shares to other separate
accounts of the Company or its life insurance
company affiliates supporting other variable
products, or to variable life insurance and annuity
separate accounts of insurance companies not
affiliated with the Company. The other Funds
currently sell shares: (a) to the Account as well as
to separate accounts of insurance companies that may
or may not be affiliated with the Company or each
other; and (b) to separate accounts to serve as the
underlying investment for both variable insurance
policies and variable annuity contracts. The Company
currently does not foresee any disadvantages to
owners arising from the sale of shares to support
variable annuity contracts and variable life
insurance policies, or from shares being sold to
separate accounts of insurance companies that may or
may not be affiliated with the Company. However, the
Company will monitor events in order to identify any
material irreconcilable conflicts that might
possibly arise. In the event of such a conflict, it
would determine what action, if any, should be taken
in response to the conflict. In addition, if the
Company believes that a Fund's response to any such
conflicts insufficiently protects owners, it will
take appropriate action on its own, including
withdrawing the Account's investment in that Fund.
(See the Fund prospectuses for more detail.)

Each Fund is registered with the SEC as an open-end,
diversified management investment company. Such
registration does not involve supervision of the
management or investment practices or policies of
the Fund by the SEC.

[Additional Information on Investment Options to be
provided by amendment.]
- --------------------------------------------------------------------------------
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
The Company reserves the right, subject to
applicable law, to make additions to, deletions from
or substitutions for the shares that are held in the
Account or that the Account may purchase. If the
shares of an Investment Option are no longer
available for investment or if, in the Company's
judgment, further investment in any Investment
Option should become inappropriate in view of the
purposes of the Account, the Company may redeem the
shares, if any, of that Investment Option and
substitute shares of another Investment Option. The
Company will not substitute any shares attributable
to a Contract's interest in a Subaccount without
notice and prior approval of the SEC and state
insurance authorities, to the extent required by the
1940 Act or other applicable law.

The Company also reserves the right to establish
additional subaccounts of the Account, each of which
would invest in shares corresponding to an
Investment Option or in shares of another investment
company having a specified investment objective. The
Company may, in its sole discretion, establish new
subaccounts or eliminate or combine one or more
Subaccounts if marketing needs, tax considerations
or investment conditions warrant. Any new
subaccounts may be made available to existing
Contract owners on a basis to be determined by the
Company. Subject to obtaining any approvals or
consents required by applicable law, the assets of
one or more Subaccounts may be transferred to any
other Subaccount if, in the sole discretion of the
Company, marketing, tax or investment conditions
warrant.

In the event of any such substitution or change, the
Company may, by appropriate endorsement, change the
Contract to reflect the substitution or change. If
the Company deems it to be in the best interest of
Contract owners and annuitants, and subject to any
approvals that may be required under applicable law,
the Account may be operated as a management
investment company under the 1940 Act, it may be
deregistered under that Act if registration is no
longer required, it may be combined with other
Company separate accounts or its assets may be
transferred to another separate account of the
Company. In addition, the Company may, when
permitted by law, restrict or eliminate any voting
rights of owners or the persons who have such rights
under the Contracts.
- --------------------------------------------------------------------------------
DESCRIPTION OF ANNUITY CONTRACT

9
<PAGE>
- --------------------------------------------------------------------------------
ISSUANCE OF A CONTRACT In order to purchase a Contract, application must be
made to the Company through a licensed
representative of the Company, who is also a
registered representative of EquiTrust Marketing
Services, Inc. ("EquiTrust Marketing") (formerly FBL
Marketing Services, Inc.), a broker-dealer having a
selling agreement with EquiTrust Marketing or a
broker-dealer having a selling agreement with such
broker/dealer. The Contract Date will be the date
the properly completed application is received by
the Company at its Home Office. If this date is the
29th, 30th or 31st of any month, the Contract Date
will be the 28th of such month. Contracts may be
sold to or in connection with retirement plans that
do not qualify for special tax treatment as well as
retirement plans that qualify for special tax
treatment under the Code. There is no maximum age
for owners on the Contract date.
- --------------------------------------------------------------------------------
PREMIUMS The minimum initial premium which the Company will
accept is $1,000 for Qualified Contracts and $5,000
for non-Qualified Contracts. Subsequent premium
payments may be paid at any time during the
annuitant's lifetime and before the retirement date
and must be for at least $50.

At the time of application, a premium reminder
notice schedule may be selected based on an annual,
semi-annual, or quarterly payment. The owner will
receive a premium reminder notice at the specified
interval. The owner may change the amount and
schedule of the premium reminder notice. Also, under
the Automatic Payment Plan, the owner can select a
monthly payment schedule pursuant to which premium
payments will be automatically deducted from a bank
account or other source rather than being "billed."
The Contract will not necessarily lapse even if
premiums are not paid.
- --------------------------------------------------------------------------------
FREE-LOOK PERIOD The Contract provides for an initial "free-look"
period. The owner has the right to return the
Contract within 20 days of receiving it. When the
Company receives the returned Contract at its Home
Office, it will cancel the Contract and refund to
the owner an amount equal to the greater of the
premiums paid under the Contract or the sum of the
accumulated value as of the date the returned
Contract is received by the Company at its Home
Office plus the amount of the annual administration
charge and any charges deducted from the Account.
- --------------------------------------------------------------------------------
ALLOCATION OF PREMIUMS If the application for a Contract is properly
completed and is accompanied by all the information
necessary to process it, including payment of the
initial premium, the initial premium will be
allocated to the Money Market Subaccount within two
business days of receipt of such premium by the
Company at its Home Office. If the application is
not properly completed, the Company reserves the
right to retain the premium for up to five business
days while it attempts to complete the application.
If the application is not complete at the end of the
5-day period, the Company will inform the applicant
of the reason for the delay and the initial premium
will be returned immediately, unless the applicant
specifically consents to the Company retaining the
premium until the application is complete.

At the time of application, the owner selects how
the initial premium is to be allocated among the
Subaccounts and the Declared Interest Option. Any
allocation must be for at least 10% of a premium
payment and be in whole percentages.

The initial premium will be allocated to the Money
Market Subaccount for a 10-day period following the
Contract date. After the expiration of the 10-day
period, the amount in the Money Market Subaccount
will be allocated among the Subaccounts and the
Declared Interest Option in accordance with the
owner's percentage allocation in the application.
Any subsequent premiums will be allocated at the end
of the valuation period in which the subsequent
premium is received by the Company in the same
manner, unless the allocation percentages are
changed. Subsequent premiums will be allocated in
accordance with the allocation schedule in effect at
the time the premium payment is received. However,
owners may direct individual payments to a specific
Subaccount or the Declared Interest Option (or any
combination thereof) without changing the existing
allocation schedule.

10
<PAGE>
The allocation schedule may be changed by the owner
at any time by written notice. Changing the
allocation schedule will not change the allocation
of existing accumulated values among the Subaccounts
or the Declared Interest Option.

The accumulated values allocated to a Subaccount
will vary with that Subaccount's investment
experience, and the owner bears the entire
investment risk. Owners should periodically review
their premium allocation schedule in light of market
conditions and their overall financial objectives.
- --------------------------------------------------------------------------------
VARIABLE ACCUMULATED VALUE The variable accumulated value will reflect the
investment experience of the selected Subaccounts,
any premiums paid, any surrenders or partial
withdrawals, any transfers and any charges assessed
in connection with the Contract. There is no
guaranteed minimum variable accumulated value, and,
because a Contract's variable accumulated value on
any future date depends upon a number of variables,
it cannot be predetermined.

CALCULATION OF VARIABLE ACCUMULATED VALUE. The variable accumulated value is
determined at the end of each valuation period. The value will be the aggregate
of the values attributable to the Contract in each of the Subaccounts,
determined for each Subaccount by multiplying that Subaccount's unit value for
the relevant valuation period by the number of Subaccount units allocated to the
Contract.

DETERMINATION OF NUMBER OF UNITS. Any amounts allocated to the Subaccounts will
be converted into Subaccount units. The number of units to be credited to a
Contract is determined by dividing the dollar amount being allocated to a
Subaccount by the unit value for that Subaccount at the end of the valuation
period during which the amount was allocated. The number of units in any
Subaccount will be increased at the end of the valuation period by any premiums
allocated to the Subaccount during the current valuation period and by any
amounts transferred to the Subaccount from another Subaccount or the Declared
Interest Option during the current valuation period. The number of units in any
Subaccount will be decreased at the end of the valuation period by any amounts
transferred from that Subaccount to another Subaccount or the Declared Interest
Option, any amounts withdrawn during the current valuation period, any surrender
charge assessed upon a partial withdrawal or surrender and the annual
administrative charge, if assessed during the current valuation period.

DETERMINATION OF UNIT VALUE. The unit value for each Subaccount's first
valuation period is set at $10. The unit value for a Subaccount is calculated
for each subsequent valuation period by dividing (a) by (b) where:

(a) is the net result of:

1. the value of the net assets in the Subaccount at the end of the
preceding valuation period; plus

2. the investment income, dividends and capital gains, realized or
unrealized, credited to the Subaccount during the current valuation
period; minus

3. the capital losses, realized or unrealized, charged against the
Subaccount during the current valuation period; minus

4. any amount charged for taxes or any amount set aside during the
valuation period as a provision for taxes attributable to the Subaccount;
minus

5. the daily amount charged for mortality and expense risks for each
day of the current valuation period; and

(b) the number of units outstanding at the end of the preceding
valuation period.
- --------------------------------------------------------------------------------
TRANSFER PRIVILEGE Before the retirement date, an owner may transfer
all or part of an amount in a Subaccount to another
Subaccount or the Declared Interest Option at any
time, or transfer up to 25% of an amount in the
Declared Interest Option to one or more Subaccounts.
However, if a transfer request would reduce the
amount in the Declared Interest Option below $1,000,
the owner may transfer the entire amount from the
Declared Interest Option. The minimum transfer
amount must be the lesser of $100 or the entire
amount in that Subaccount or the Declared Interest
Option.

The transfer will be made as of the business day on
or next following the day written notice requesting
such transfer is received at the Home Office. There
is no limit on the number of transfers that can be
made among or between Subaccounts or the Declared
Interest Option. (See "Transfers from Declared
Interest Option.")

11
<PAGE>
There is no charge for the first twelve transfers
during a Contract Year. The Company may charge $25
for each subsequent transfer during a Contract Year.
Unless paid in cash, the transfer processing fee
will be deducted on a pro-rata basis from the
Subaccounts or Declared Interest Option to which the
transfer is made.

Transfers may be made based upon instructions given
by telephone, provided the appropriate election has
been made at the time of application or proper
authorization is provided to the Company. The
Company reserves the right to suspend telephone
transfer privileges at any time, for any class of
Contracts, for any reason.
- --------------------------------------------------------------------------------
PARTIAL WITHDRAWALS AND SURRENDERS

PARTIAL WITHDRAWALS. At any time before the retirement date, an owner may make a
partial withdrawal of the accumulated value. The minimum amount which may be
withdrawn is $500; the maximum amount is that which would leave the remaining
accumulated value equal to or less than $2,000. A partial withdrawal request
that would reduce the accumulated value to $2,000 or less will be treated as a
full surrender of the Contract. The Company will withdraw the amount requested
from the accumulated value as of the Business Day on or next following the day
written notice requesting the partial withdrawal is received at the Home Office.
Any applicable surrender charge will, at the election of the owner, be deducted
from the remaining accumulated value or be deducted from the amount withdrawn.
(See "Surrender Charge.")

The owner may specify the amount of the partial
withdrawal to be made from certain Subaccounts or
the Declared Interest Option. If the owner does not
so specify, or if the amount in the designated
Subaccount(s) or Declared Interest Option is
inadequate to comply with the request, the partial
withdrawal will be made from each Subaccount and the
Declared Interest Option based on the proportion
that the value in such Subaccount bears to the total
accumulated value on the date the request is
received at the Home Office.

A partial withdrawal may have adverse federal income
tax consequences, including a penalty tax. (See
"Taxation of Annuities.")

SURRENDER. At any time before the retirement date, the owner may request a
surrender of the contract for its net accumulated value. The net accumulated
value will be determined as of the Business Day on or next following the date
written notice requesting surrender and the Contract are received at the Home
Office. The net accumulated value will be paid in a lump sum unless the owner
requests payment under a payment option. A surrender may have adverse federal
income tax consequences. (See "Taxation of Annuities.")

SURRENDER AND PARTIAL WITHDRAWAL RESTRICTIONS. The owner's right to make
surrenders and partial withdrawals is subject to any restrictions imposed by
applicable law or employee benefit plan.

RESTRICTIONS ON DISTRIBUTIONS FROM CERTAIN TYPES OF CONTRACTS. There are certain
restrictions on surrenders and partial withdrawals of Contracts used as funding
vehicles for Code Section 403(b) retirement plans. Section 403(b)(11) of the
Code restricts the distribution under Section 403(b) annuity contracts of: (i)
elective contributions made in years beginning after December 31, 1988; (ii)
earnings on those contributions; and (iii) earnings in such years on amounts
held as of the last year beginning before January 1, 1989. Distributions of
those amounts may only occur upon the death of the employee, attainment of age
59 1/2, separation from service, disability or financial hardship. In addition,
income attributable to elective contributions may not be distributed in the case
of hardship.
- --------------------------------------------------------------------------------
DEATH BENEFIT BEFORE THE RETIREMENT DATE
DEATH OF OWNER. If an owner dies prior to the
retirement date, any surviving owner becomes the
sole owner. If there is no surviving owner, the
annuitant becomes the new owner unless the deceased
owner was also the annuitant. If the sole deceased
owner was also the annuitant, then the provisions
relating to the death of an annuitant (described
below) will govern unless the deceased owner was one
of two joint annuitants. (In the latter event, the
surviving annuitant becomes the owner.)

The following options are available to the sole
surviving owners or new owners:

1. If the owner is the spouse of the deceased owner, he or she may
continue the Contract as the new owner.

2. If the owner is not the spouse of the deceased owner:

(a) he or she may elect to receive the net accumulated value in a
single sum within 5 years of the deceased owner's death; or

12
<PAGE>
(b) he or she may elect to receive the net accumulated value paid out
under one of the annuity payment options.

Under either of these options, sole surviving owners
or new owners may exercise all ownership rights and
privileges from the date of the deceased owner's
death until the date that the net accumulated value
is paid.

DEATH OF AN ANNUITANT. If the annuitant dies before
the retirement date, the Company will pay the death
benefit under the Contract to the beneficiary. If
there is no surviving beneficiary, the Company will
pay the death benefit to the owner or the owner's
estate. The death benefit is equal to the greater of
the sum of the premiums paid less the sum of all
partial withdrawal reductions (including applicable
surrender charges), the accumulated value on the
date the Company receives due proof of the
annuitant's death, or the accumulated value on the
most recent Contract Anniversary (plus subsequent
premiums paid and less subsequent partial
withdrawals) if the annuitant's age on the Contract
Date was less than 76. If the annuitant's age on the
Contract Date was 76 or older, the death benefit is
equal to the greater of the sum of the premiums paid
less the sum of all partial withdrawal reductions
(including applicable surrender charges), as of the
date the Company receives due proof of death, or the
accumulated value as of the date the Company
receives due proof of death.

A partial withdrawal reduction is defined as (a) the
death benefit times (b) the amount of the partial
withdrawal divided by (c) the accumulated value
immediately prior to withdrawal.

There is no death benefit payable if the annuitant
dies after the retirement date. The death benefit
will be paid to the beneficiary in a lump sum unless
the owner or beneficiary elects a payment option.

If the annuitant who is also the the owner dies, the
provisions described immediately above apply except
that the beneficiary may only apply the death
benefit payment to an annuity payment option if:

1. payments under the option begin within 1 year of the annuitant's
death; and

2. payments under the option are payable over the beneficiary's life or
over a period not greater than the beneficiary's life expectancy.

If the owner's spouse is the designated beneficiary,
the Contract may be continued with such surviving
spouse as the new owner.
- --------------------------------------------------------------------------------
SPECIAL TRANSFER AND WITHDRAWAL OPTIONS

DOLLAR COST AVERAGING. Dollar Cost Averaging is a special type of automatic
transfer. Under this option, an owner may periodically transfer a specified
amount in a Subaccount or the Declared Interest Option to another Subaccount or
the Declared Interest Option.

SYSTEMATIC WITHDRAWALS. The Systematic Withdrawal option allows for automatic
partial withdrawals. Under this option, specified amounts may be periodically
withdrawn from the Contract's accumulated value. The owner may specify the
allocation of the withdrawals among the Subaccounts and Declared Interest
Option.

The use of Dollar Cost Averaging and Systematic
Withdrawals are subject to all the same provisions
and limitations as regular transfers and regular
partial withdrawals described above. The Company
prohibits the use of these two options at the same
time.
- --------------------------------------------------------------------------------
DEATH BENEFIT AFTER THE RETIREMENT DATE
If an owner dies on or after the retirement date,
any surviving owner becomes the sole owner. If there
is no surviving owner, the payee receiving annuity
payments becomes the new owner. Such owners will
have the rights of owners during the annuity period,
including the right to name successor payees if the
deceased owner had not previously done so.

Other rules may apply to a Qualified Contract.

13
<PAGE>
- --------------------------------------------------------------------------------
PROCEEDS ON THE RETIREMENT DATE
The retirement date is selected by the owner. For
Non-Qualified Contracts, the retirement date may not
be after the later of the annuitant's age 70 or 10
years after the Contract date. For Qualified
Contracts, the retirement date must be no later than
the annuitant's age 70 1/2 or such other date as
meets the requirements of the Code.

On the retirement date, the proceeds will be applied
under the life income annuity payment option with
ten years guaranteed, unless the owner chooses to
have the proceeds paid under another payment option
or in a lump sum. (See "Payment Options.") If a
payment option is elected, the amount that will be
applied is the accumulated value less any applicable
surrender charge. If a lump sum payment is chosen,
the amount paid will be the net accumulated value on
the retirement date.

The retirement date may be changed subject to these
limitations: the owner's written notice must be
received at the Home Office at least 30 days before
the current retirement date; the requested
retirement date must be a date that is at least 30
days after receipt of the written notice; and the
requested retirement date must be no later than the
annuitant's 70th birthday or any earlier date
required by law.
- --------------------------------------------------------------------------------
PAYMENTS Any surrender, partial withdrawal or death benefit
will usually be paid within seven days of receipt of
a written request, any information or documentation
reasonably necessary to process the request and, in
the case of a death benefit, receipt and filing of
due proof of death. However, payments may be
postponed if:

1. the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on the exchange is restricted as determined
by the SEC; or

2. the SEC permits by an order the postponement for the protection of
owners; or

3. the SEC determines that an emergency exists that would make the
disposal of securities held in the Account or the determination of the value
of the Account's net assets not reasonably practicable.

If a recent check or draft has been submitted, the
Company has the right to delay payment until it has
assured itself that the check or draft has been
honored.

The Company has the right to defer payment of any
surrender, partial withdrawal or transfer from the
Declared Interest Option for up to six months from
the date of receipt of written notice for such a
surrender, withdrawal or transfer. If payment is not
made within 30 days after receipt of documentation
necessary to complete the transaction, or such
shorter period as required by a particular
jurisdiction, interest will be added to the amount
paid from the date of receipt of documentation at 3%
or such higher rate required for a particular state.
- --------------------------------------------------------------------------------
MODIFICATION Upon notice to the owner, the Company may modify the
Contract if:

1. necessary to make the Contract or the Account comply with any law or
regulation issued by a governmental agency to which the Company is subject;
or

2. necessary to assure continued qualification of the Contract under
the Code or other federal or state laws relating to retirement annuities or
variable annuity contracts; or

3. necessary to reflect a change in the operation of the Account; or

4. the modification provides additional Account and/or fixed
accumulation options.

In the event of most such modifications, the Company
will make appropriate endorsement to the Contract.
- --------------------------------------------------------------------------------
REPORTS TO OWNERS At least annually, the Company will mail to each
owner, at such owner's last known address of record,
a report containing the accumulated value (including
the accumulated value in each Subaccount and the
Declared Interest Option) of the Contract, premiums
paid and charges deducted since the last report,
partial withdrawals made since the last report and
any further information required by any applicable
law or regulation.
- --------------------------------------------------------------------------------

14
<PAGE>
INQUIRIES Inquiries regarding a Contract may be made by
writing to the Company at its Home Office.

15
<PAGE>
- --------------------------------------------------------------------------------
THE DECLARED INTEREST OPTION
- --------------------------------------------------------------------------------
An owner may allocate some or all of the premiums
and transfer some or all of the accumulated value to
the Declared Interest Option, which is part of the
General Account and pays interest at declared rates
guaranteed for each Contract year (subject to a
minimum guaranteed interest rate of 3%). The
principal, after deductions, is also guaranteed. The
Company's General Account supports its insurance and
annuity obligations.

The Declared Interest Option has not been, and is
not required to be, registered with the SEC under
the Securities Act of 1933 ("the 1933 Act"), and
neither the Declared Interest Option nor the
Company's General Account has been registered as an
investment company under the 1940 Act. Therefore,
neither the Company's General Account, the Declared
Interest Option, nor any interests therein are
generally subject to regulation under the 1933 Act
or the 1940 Act. The disclosures relating to these
accounts which are included in this Prospectus are
for the owner's information and have not been
reviewed by the SEC. However, such disclosures may
be subject to certain generally applicable
provisions of Federal securities laws relating to
the accuracy and completeness of statements made in
prospectuses.

The portion of the accumulated value allocated to
the Declared Interest Option (the "Declared Interest
Option accumulated value") will be credited with
rates of interest, as described below. Since the
Declared Interest Option is part of the General
Account, the Company assumes the risk of investment
gain or loss on this amount. All assets in the
General Account are subject to the Company's general
liabilities from business operations.
- --------------------------------------------------------------------------------
MINIMUM GUARANTEED
AND CURRENT INTEREST
RATES
The Declared Interest Option cash value is
guaranteed to accumulate at a minimum effective
annual interest rate of 3%. The Company intends
to credit the Declared Interest Option
accumulated value with current rates in excess
of the minimum guarantee but is not obligated to
do so. These current interest rates are
influenced by, but do not necessarily correspond
to, prevailing general market interest rates.
Any interest credited on the amounts in the
Declared Interest Option in excess of the
minimum guaranteed rate of 3% per year will be
determined in the sole discretion of the
Company. The owner, therefore, assumes the risk
that interest credited may not exceed the
guaranteed rate.
From time to time, the Company establishes new
current interest rates for the Declared Interest
Option under the Contracts. The rate applicable for
a particular Contract is the rate in effect on the
most recent Contract anniversary. This rate remains
unchanged for that Contract until the next Contract
anniversary (i.e., for the entire Contract year).
During each Contract year, the entire Declared
Interest Option accumulated value (including amounts
allocated or transferred to the Declared Interest
Option during that year) is credited with the
interest rate in effect for that Contract year. Once
credited, interest becomes part of the Declared
Interest Option accumulated value.

The Company reserves the right to change the method
of crediting interest from time to time, provided
that such changes do not have the effect of reducing
the guaranteed rate of interest below 3% per annum
or shorten the period for which the current interest
rate applies to less than a Contract year (except
for the year in which such amount is received or
transferred).

CALCULATION OF DECLARED INTEREST OPTION ACCUMULATED VALUE. The Declared Interest
Option accumulated value at any time is equal to amounts allocated and
transferred to it, plus interest credited less amounts deducted, transferred or
withdrawn.
- --------------------------------------------------------------------------------
TRANSFERS FROM DECLARED INTEREST OPTION
An unlimited number of transfers are allowed from
the Declared Interest Option to any or all of the
Subaccounts in each Contract year. The amount
transferred from the Declared

16
<PAGE>
Interest Option may not exceed 25% of the Declared
Interest Option accumulated value on the date of
transfer, unless the balance after the transfer
would be less than $1,000, in which case the entire
amount may be transferred.
- --------------------------------------------------------------------------------
PAYMENT DEFERRAL The Company has the right to defer payment of any
surrender, partial withdrawal or transfer from the
Declared Interest Option up to six months from the
date of receipt of the written notice for surrender
or transfer.
- --------------------------------------------------------------------------------
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
SURRENDER CHARGE (CONTINGENT DEFERRED SALES CHARGE)
GENERAL. No charge for sales expenses is deducted
from premiums at the time premiums are paid.
However, within certain time limits described below,
a surrender charge (contingent deferred sales
charge) is deducted from the accumulated value if a
partial withdrawal or surrender is made before the
retirement date. Also, as described below, a
surrender charge may be deducted from amounts
applied to certain payment options.

In the event surrender charges are not sufficient to
cover sales expenses, the loss will be borne by the
Company; conversely, if the amount of such charges
proves more than enough, the excess will be retained
by the Company.

CHARGE FOR PARTIAL WITHDRAWAL OR SURRENDER. During the first nine Contract
years, if a partial withdrawal or surrender is made, the applicable surrender
charge will be as follows:

<TABLE>
<CAPTION>
CONTRACT YEAR IN CHARGE AS PERCENTAGE
WHICH SURRENDER OCCURS OF AMOUNT SURRENDERED
- -------------------------------------- ---------------------
<S> <C>
1..................................... 8.5%
2..................................... 8
3..................................... 7.5
4..................................... 7
5..................................... 6.5
6..................................... 6
7..................................... 5
8..................................... 3
9..................................... 1
10 and after.......................... 0
</TABLE>

No surrender charge is deducted if the partial
withdrawal or surrender occurs after nine full
Contract years.

In no event will the total surrender charges
assessed under a Contract exceed 8.5% of the total
premiums paid under that Contract.

If the Contract is being surrendered, the surrender
charge is deducted from the accumulated value in
determining the net accumulated value. For a partial
withdrawal, the surrender charge may, at the
election of the owner, be deducted from the
accumulated value remaining after the amount
requested is withdrawn or be deducted from the
amount of the withdrawal requested.

AMOUNTS NOT SUBJECT TO SURRENDER CHARGE. For partial withdrawals in each
Contract year after the first Contract year, up to 10% of the accumulated value
on the most recent Contract Anniversary may be withdrawn without a current
surrender charge. If the Contract is subsequently surrendered during the
Contract Year, a surrender charge will be applied to partial withdrawals taken
during that Contract Year, as well as to the amount surrendered.

Any amounts surrendered in excess of 10% of the
accumulated value will be assessed a surrender
charge. This right is not cumulative from Contract
year to Contract year.

SURRENDER CHARGE AT THE RETIREMENT DATE. If any payment option is selected at
the retirement date other than options 2-5 described below (see "Payment
Options"), the surrender charge is assessed against the accumulated value
applied to that option. If payment options 3 or 5 are selected, no surrender
charge is assessed and if payment options 2 or 4 are selected, the surrender
charge is applied by adding the fixed number of years for which payments will be
made under the option to the number of Contract years since the Contract date
and using this sum in the surrender charge table.

17
<PAGE>
WAIVER OF SURRENDER CHARGE. Upon written notice from the owner before the
retirement date, the surrender charge may be waived on any partial withdrawal or
surrender if the annuitant is terminally ill, as defined in the Contract, stays
in a qualified nursing center for 90 days, or is required to satisfy Internal
Revenue Code minimum distribution requirements.
- --------------------------------------------------------------------------------
ANNUAL ADMINISTRATIVE CHARGEOn the Contract date and on each Contract
anniversary prior to the retirement date, the
Company deducts from the accumulated value an annual
administrative charge of $45 to reimburse it for
administrative expenses relating to the Contract.
(If the Contract date falls on Thanksgiving, the
Friday following Thanksgiving or the weekend
following Thanksgiving, the annual administrative
charge will be deducted on the preceding Business
Day.) The charge will be deducted from each
Subaccount and the Declared Interest Option based on
the proportion that the value in each such
Subaccount bears to the total accumulated value. No
annual administrative charge is payable during the
annuity payment period.
- --------------------------------------------------------------------------------
TRANSFER PROCESSING FEE There is no charge for the first twelve transfers
during a Contract Year. The Company may charge $25
for each subsequent transfer during a Contract year.
Unless paid in cash, the transfer processing fee
will be deducted on a pro-rata basis from the
Subaccounts or Declared Interest Option to which the
transfer is made.
- --------------------------------------------------------------------------------
MORTALITY AND EXPENSE RISK CHARGE
To compensate the Company for assuming mortality and
expense risks, the Company deducts a daily mortality
and expense risk charge from the assets of the
Account. The charge is at an annual rate of 1.40%
(daily rate of 0.0038091%) (approximately 1.01% for
mortality risk and 0.39% for expense risk).

The mortality risk the Company assumes is that
annuitants may live for a longer period of time than
estimated when the guarantees in the Contract were
established. Because of these guarantees, each payee
is assured that longevity will not have an adverse
effect on the annuity payments received. The
mortality risk that the Company assumes also
includes a guarantee to pay a death benefit if the
owner/annuitant dies before the retirement date. The
expense risk that the Company assumes is the risk
that the administrative fees and transfer fees may
be insufficient to cover actual future expenses.
- --------------------------------------------------------------------------------
INVESTMENT OPTION EXPENSES Because the Account purchases shares of the
Investment Options, the net assets of the Account
will reflect the investment advisory fees and other
operating expenses incurred by each Investment
Option. (See the Expense Tables in this prospectus
and the accompanying Investment Option
prospectuses.)
- --------------------------------------------------------------------------------
PREMIUM TAXES Currently, no charge or deduction is made under the
Contracts for premium taxes. The Company reserves
the right, however, to deduct such taxes from
accumulated value. Various states and other
governmental entities levy a premium tax, currently
ranging up to 3.5%, on annuity contracts issued by
insurance companies. Premium tax rates are subject
to change, from time to time, by legislative and
other governmental action.
- --------------------------------------------------------------------------------
OTHER TAXES Currently, no charge is made against the Account for
any federal, state or local taxes that the Company
incurs or that may be attributable to the Account or
the Contracts. The Company may, however, make such a
charge in the future for any such tax or economic
burden on the Company resulting from the application
of the tax laws that it determines to be properly
attributable to the Account or Contracts.

18
<PAGE>
- --------------------------------------------------------------------------------
PAYMENT OPTIONS
- --------------------------------------------------------------------------------
The Contract ends on the retirement date, at which
time the accumulated value (or, under certain
options, the net accumulated value) will be applied
under a payment option, unless the owner elects to
receive the net accumulated value in a single sum.
If an election of a payment option has not been
filed at the Home Office on the retirement date, the
proceeds will be paid as a life income annuity with
payments for ten years guaranteed. Prior to the
retirement date, the owner can have the entire net
accumulated value applied under a payment option, or
a beneficiary can have the death benefit applied
under a payment option. The Contract must be
surrendered so that the applicable amount can be
paid in a lump sum or a supplemental contract for
the applicable payment option can be issued.

The payment options available are described below.
The term "payee" means a person who is entitled to
receive payment under that option. The payment
options are fixed, which means that each option has
a fixed and guaranteed amount to be paid during the
annuity payment period that is not in any way
dependent upon the investment experience of the
Account.
- --------------------------------------------------------------------------------
ELECTION OF OPTIONS An option may be elected, revoked or changed at any
time before the retirement date while the annuitant
is living. If an election is not in effect at the
annuitant's death or if payment is to be made in one
sum under an existing election, the beneficiary may
elect one of the options after the death of the
owner/annuitant.

An election of payment options and any revocation or
change must be made by written notice and signed by
the owner or beneficiary, as appropriate.

The Company reserves the right to refuse the
election of a payment option other than paying the
proceeds in a lump sum if: 1) the total payments
together would be less than $2,000; 2) each payment
would be less than $20; or 3) the payee is an
assignee, estate, trustee, partnership, corporation
or association.
- --------------------------------------------------------------------------------
DESCRIPTION OF OPTIONS

OPTION 1--INTEREST INCOME. To have the proceeds left
with the Company to earn interest at a rate to be
determined by the Company. Interest will be paid
every month or every 3, 6 or 12 months as the payee
selects. Under this option, the payee may withdraw
part or all of the proceeds at any time.

OPTION 2--INCOME FOR A FIXED TERM. To have the
proceeds paid out in equal installments for a fixed
number of years.

OPTION 3--LIFE INCOME OPTION WITH TERM CERTAIN. To
have the proceeds paid in equal amounts (at
intervals elected by the payee) during the payee's
lifetime with the guarantee that payments will be
made for a period of not less than the specified
number of years. Under this option, at the death of
a payee having no beneficiary (or where the
beneficiary died prior to the payee), the present
value of the current dollar amount on the date of
death of any remaining guaranteed payments will be
paid in one sum to the executors or administrators
of the payee's estate. Also under this option, if
any beneficiary dies while receiving payment, the
present value of the current dollar amount on the
date of death of any remaining guaranteed payments
will be paid in one sum to the executors or
administrators of the beneficiary's estate.
Calculation of such present value shall be no less
than 3%.

OPTION 4--INCOME FOR FIXED AMOUNT. To have the
proceeds paid out in equal installments (at
intervals elected by the payee) of a specific
amount. The payments will continue until all the
proceeds plus interest have been paid out.

OPTION 5--JOINT AND TWO-THIRDS TO SURVIVOR MONTHLY
LIFE INCOME. To have proceeds paid out in equal
installments for as long as two joint payees live.
When one payee dies, installments of two-thirds of
the first installment will be paid to the surviving
payee until he or she dies.

19
<PAGE>
The amount of each payment will be determined from
the tables in the Contract which apply to the
particular option using the payee's age and sex. Age
will be determined from the last birthday at the due
date of the first payment.

ALTERNATE PAYMENT OPTION. In lieu of one of the above options, the cash value,
cash surrender value or death benefit, as applicable, may be settled under any
other payment option made available by the Company or requested and agreed to by
the Company.
- --------------------------------------------------------------------------------
YIELDS AND TOTAL RETURNS
- --------------------------------------------------------------------------------
From time to time, the Company may advertise or
include in sales literature yields, effective yields
and total returns for the Subaccounts. THESE FIGURES
ARE BASED ON HISTORICAL EARNINGS AND DO NOT INDICATE
OR PROJECT FUTURE PERFORMANCE. Each Subaccount may,
from time to time, advertise or include in sales
literature performance relative to certain
performance rankings and indices compiled by
independent organizations. More detailed information
as to the calculation of performance, as well as
comparisons with unmanaged market indices, appears
in the Statement of Additional Information.

Effective yields and total returns for the
Subaccounts are based on the investment performance
of the corresponding Investment Option. Each
Investment Option's performance in part reflects the
Investment Option's expenses. (See the accompanying
Investment Option Prospectuses.)

The yield of the Money Market Subaccount refers to
the annualized income generated by an investment in
the Subaccount over a specified seven-day period.
The yield is calculated by assuming that the income
generated for that seven-day period is generated
each seven-day period over a 52-week period and is
shown as a percentage of the investment. The
effective yield is calculated similarly but, when
annualized, the income earned by an investment in
the Subaccount is assumed to be reinvested. The
effective yield will be slightly higher than the
yield because of the compounding effect of this
assumed reinvestment.

The yield of a Subaccount (except the Money Market
Subaccount) refers to the annualized income
generated by an investment in the Subaccount over a
specified 30-day or one-month period. The yield is
calculated by assuming that the income generated by
the investment during that 30-day or one-month
period is generated each period over a 12-month
period and is shown as a percentage of the
investment.

The total return of a Subaccount refers to return
quotations assuming an investment under a Contract
has been held in the Subaccount for various periods
of time. When a Subaccount has been in operation for
one, five and ten years, respectively, the total
return for these periods will be provided. For
periods prior to the date the Account commenced
operations, performance information will be
calculated based on the performance of the
Investment Options and the assumption that the
Subaccounts were in existence for the same periods
as those indicated for the Investment Options, with
the level of Contract charges that were in effect at
the inception of the Subaccounts for the Contracts.

The average annual total return quotations represent
the average annual compounded rates of return that
would equate an initial investment of $1,000 under a
Contract to the redemption value of that investment
as of the last day of each of the periods for which
total return quotations are provided. Average annual
total return information shows the average
percentage change in the value of an investment in
the Subaccount from the beginning date of the
measuring period to the end of that period. This
standardized version of average annual total return
reflects all historical investment results less all
charges and deductions applied against the
Subaccount (including any surrender charge that
would apply if an owner terminated the Contract at
the end of each period indicated, but excluding any
deductions for premium taxes).

20
<PAGE>
In addition to the standard version described above,
total return performance information computed on two
different non-standard bases may be used in
advertisements or sales literature. Average annual
total return information may be presented, computed
on the same basis as described above, except
deductions will not include the surrender charge. In
addition, the Company may, from time to time,
disclose cumulative total return for Contracts
funded by Subaccounts.

From time to time, yields, standard average annual
total returns and non-standard total returns for the
Fund's Investment Options may be disclosed,
including such disclosures for periods prior to the
date the Account commenced operations.

Non-standard performance data will only be disclosed
if the standard performance data for the required
periods is also disclosed. For additional
information regarding the calculation of other
performance data, please refer to the Statement of
Additional Information.

In advertising and sales literature, the performance
of each Subaccount may be compared to the
performance of other variable annuity issuers in
general, or to the performance of particular types
of variable annuities investing in mutual funds or
investment portfolios of mutual funds with
investment objectives similar to each of the
Subaccounts. Lipper Analytical Services, Inc.
("Lipper") and the Variable Annuity Research Data
Service ("VARDS") are independent services which
monitor and rank the performance of variable annuity
issuers in each of the major categories of
investment objectives on an industry-wide basis.

Lipper's rankings include variable life insurance
issuers as well as variable annuity issuers. VARDS
rankings compare only variable annuity issuers. The
performance analyses prepared by Lipper and VARDS
each rank such issuers on the basis of total return,
assuming reinvestment of distributions, but do not
take sales charges, redemption fees or certain
expense deductions at the separate account level
into consideration. In addition, VARDS prepares risk
rankings, which consider the effects of market risk
on total return performance. This type of ranking
provides data as to which funds provide the highest
total return within various categories of funds
defined by the degree of risk inherent in their
investment objectives.

Advertising and sales literature may also compare
the performance of each Subaccount to the Standard &
Poor's Index of 500 Common Stocks, a widely used
measure of stock performance. This unmanaged index
assumes the reinvestment of dividends but does not
reflect any "deduction" for the expense of operating
or managing an investment portfolio. Other
independent ranking services and indices may also be
used as a source of performance comparison.

The Company may also report other information
including the effect of tax-deferred compounding on
a Subaccount's investment returns, or returns in
general, which may be illustrated by tables, graphs
or charts. All income and capital gains derived from
Subaccount investments are reinvested and can lead
to substantial long-term accumulation of assets,
provided that the underlying Portfolio's investment
experience is positive.
- --------------------------------------------------------------------------------
FEDERAL TAX MATTERS
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE
- --------------------------------------------------------------------------------
INTRODUCTION This discussion is not intended to address the tax
consequences resulting from all of the situations in
which a person may be entitled to or may receive a
distribution under the annuity contract issued by
the Company. Any person concerned about these tax
implications should consult a competent tax adviser
before initiating any transaction. This discussion
is based upon the Company's understanding of the
present Federal income tax laws, as they are
currently interpreted by the Internal Revenue
Service. No representation is made as to the
likelihood of the continuation of the present
federal income tax laws or of the current
interpretation by the Internal Revenue Service.
Moreover, no attempt has been made to consider any
applicable state or other tax laws.

21
<PAGE>
The Contract may be purchased on a non-qualified
basis ("Non-Qualified Contract") or purchased and
used in connection with plans qualifying for
favorable tax treatment ("Qualified Contract"). The
Qualified Contract is designed for use by
individuals whose premium payments are comprised
solely of proceeds from and/or contributions under
retirement plans which are intended to qualify as
plans entitled to special income tax treatment under
Sections 401(a), 403(b), or 408 of the Internal
Revenue Code of 1986, as amended (the "Code"). The
ultimate effect of federal income taxes on the
amounts held under a Contract, or annuity payments,
and on the economic benefit to the owner, the
annuitant or the beneficiary depends on the type of
retirement plan, on the tax and employment status of
the individual concerned, and on the Company's tax
status. In addition, certain requirements must be
satisfied in purchasing a Qualified Contract with
proceeds from a tax-qualified plan and receiving
distributions from a Qualified Contract in order to
continue receiving favorable tax treatment.
Therefore, purchasers of Qualified Contracts should
seek competent legal and tax advice regarding the
suitability of a Contract for their situation, the
applicable requirements and the tax treatment of the
rights and benefits of a Contract. The following
discussion assumes that Qualified Contracts are
purchased with proceeds from and/or contributions
under retirement plans that qualify for the intended
special federal income tax treatment.
- --------------------------------------------------------------------------------
TAX STATUS OF THE CONTRACT

DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Code provides that separate
account investments underlying a contract must be "adequately diversified" in
accordance with Treasury regulations in order for the contract to qualify as an
annuity contract under Section 72 of the Code. The Account, through each
Portfolio of the Fund, intends to comply with the diversification requirements
prescribed in regulations under Section 817(h) of the Code, which affect how the
assets in the various Subaccounts may be invested. Although the Company does not
have control over the Fund in which the Account invests, we believe that each
Portfolio in which the Account owns shares will meet the diversification
requirements, and therefore, the Contract will be treated as an annuity contract
under the Code.

In certain circumstances, owners of variable annuity
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 includible in the variable
annuity contract owner's gross income. Several years
ago, the IRS stated in published rulings that a
variable contract owner will be considered the owner
of separate account assets if the contract owner
possesses incident of ownership in those assets,
such as the ability to exercise investment control
over the assets. More recently, the Treasury
Department announced, in connection with the
issuance of regulations concerning investment
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 contract owner), rather than the
insurance company, to be treated as the owner of the
assets in the account." This announcement also
states 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 Contracts are similar
to, but different in certain respects from, those
described by the Service in rulings in which it was
determined that contract owners were not owners of
separate account assets. For example, the owner of a
Contract has the choice of one or more Subaccounts
in which to allocate premiums and Contract values,
and may be able to transfer among Subaccounts more
frequently than in such rulings. These differences
could result in the contract owner being treated as
the owner of the assets of the Account. In addition,
the Company does not know what standards will be set
forth, if any, in the regulations or rulings which
the Treasury Department has stated it expects to
issue. The Company therefore reserves the right to
modify the Contract as necessary to attempt to
prevent the contract owner from being considered the
owner of the assets of the Account.

22
<PAGE>
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for
federal income tax purposes, Section 72(s) of the Code requires any
Non-Qualified Contract to provide that: (a) if any owner dies on or after the
retirement date but prior to the time the entire interest in the contract has
been distributed, the remaining portion of such interest will be distributed at
least as rapidly as under the method of distribution being used as of the date
of that owner's death; and (b) if any owner dies prior to the annuity
commencement date, the entire interest in the Contract will be distributed
within five years after the date of the owner's death. These requirements will
be considered satisfied as to any portion of the owner's interest which is
payable to or for the benefit of a "designated beneficiary" and which is
distributed over the life of such beneficiary or over a period not extending
beyond the life expectancy of that beneficiary, provided that such distributions
begin within one year of that owner's death. The owner's "designated
beneficiary" is the person designated by such owner as a beneficiary and to whom
ownership of the contract passes by reason of death and must be a natural
person. However, if the owner's "designated beneficiary" is the surviving spouse
of the owner, the Contract may be continued with the surviving spouse as the new
owner.

The Non-Qualified Contracts contain provisions which
are intended to comply with the requirements of
Section 72(s) of the Code, although no regulations
interpreting these requirements have yet been
issued. The Company intends to review such
provisions and modify them if necessary to assure
that they comply with the requirements of Code
Section 72(s) when clarified by regulation or
otherwise.

Other rules may apply to Qualified Contracts.

The following discussion assumes that the Contracts
will qualify as annuity contracts for federal income
tax purposes.
- --------------------------------------------------------------------------------
TAXATION OF ANNUITIES

IN GENERAL. Section 72 of the Code governs taxation of annuities in general. The
Company believes that an owner who is a natural person is not taxed on increases
in the value of a Contract until distribution occurs by withdrawing all or part
of the cash value (e.g., partial surrenders and surrenders) or as annuity
payments under the payment option elected. For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the cash value (and in
the case of a Qualified Contract, any portion of an interest in the qualified
plan) generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or payment option) is taxable
as ordinary income.

The owner of any annuity contract who is not a
natural person generally must include in income any
increase in the excess of the cash value over the
"investment in the contract" during the taxable
year. There are some exceptions to this rule, and a
prospective owner that is not a natural person may
wish to discuss these with a competent tax adviser.

The following discussion generally applies to
Contracts owned by natural persons.

PARTIAL WITHDRAWALS. In the case of a partial withdrawal from a Qualified
Contract, under Section 72(e) of the Code, a ratable portion of the amount
received is taxable, generally based on the ratio of the "investment in the
contract" to the participant's total accrued benefit or balance under the
retirement plan. The "investment in the contract" generally equals the portion,
if any, of any premium payments paid by or on behalf of the individual under a
Contract which was not excluded from the individual's gross income. For
Contracts issued in connection with qualified plans, the "investment in the
contract" can be zero. Special tax rules may be available for certain
distributions from Qualified Contracts.

In the case of a partial withdrawal from a
Non-Qualified Contract, under Section 72(e) amounts
received are generally first treated as taxable
income to the extent that the cash value immediately
before the partial withdrawal exceeds the
"investment in the contract" at that time. Any
additional amount withdrawn is not taxable.

In the case of a surrender under a Qualified or
Non-Qualified Contract, the amount received
generally will be taxable only to the extent it
exceeds the "investment in the contract."

Section 1035 of the Code provides that no gain or
loss shall be recognized on the exchange of one
annuity contract for another. If the surrendered
contract was issued prior to August 14, 1982, the
tax rules formerly provided that the surrender was
taxable only to the extent the amount received
exceeds the owner's investment in the

23
<PAGE>
contract will continue to apply to amounts allocable
to investments in that contract prior to August 14,
1982. In contrast, contracts issued after January
19, 1985 in a Code Section 1035 exchange are treated
as new contracts for purposes of the penalty and
distribution-at-death rules. Special rules and
procedures apply to Section 1035 transactions.
Prospective owners wishing to take advantage of
Section 1035 should consult their tax adviser.

ANNUITY PAYMENTS. Although tax consequences may vary depending on the payment
option elected under an annuity contract, under Code Section 72(b), generally
(prior to recovery of the investment in the contract) gross income does not
include that part of any amount received as an annuity under an annuity contract
that bears the same ratio to such amount as the investment in the contract bears
to the expected return at the annuity starting date. Stated differently, prior
to recovery of the investment in the contract, generally, there is no tax on the
amount of each payment which represents the same ratio that the "investment in
the contract" bears to the total expected value of the annuity payments for the
term of the payment; however, the remainder of each income payment is taxable.
After the "investment in the contract" is recovered, the full amount of any
additional annuity payments is taxable.

TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a Contract
because of the death of the owner. Generally, such amounts are includible in the
income of the recipient as follows: (i) if distributed in a lump sum, they are
taxed in the same manner as a surrender of the contract or (ii) if distributed
under a payment option, they are taxed in the same way as annuity payments. For
these purposes, the investment in the Contract is not affected by the owner's
death. That is, the investment in the Contract remains the amount of any
purchase payments which were not excluded from gross income.

PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution pursuant to a
Non-Qualified Contract, there may be imposed a federal penalty tax equal to 10%
of the amount treated as taxable income. In general, however, there is no
penalty on distributions:

1. made on or after the taxpayer reaches age 59 1/2;

2. made on or after the death of the holder (or if the holder is not an
individual, the death of the primary annuitant);

3. attributable to the taxpayer becoming disabled;

4. as part of a series of substantially equal periodic payments (not
less frequently than annually) for the life (or life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the taxpayer and
his or her designated beneficiary;

5. made under certain annuities issued in connection with structured
settlement agreements;

6. made under an annuity contract that is purchased with a single
premium when the retirement date is no later than a year from purchase of
the annuity and substantially equal periodic payments are made, not less
frequently than annually, during the annuity payment period; and

7. any payment allocable to an investment (including earnings thereon)
made before August 14, 1982 in a contract issued before that date.

Other tax penalties may apply to certain
distributions under a Qualified Contract.

POSSIBLE CHANGES IN TAXATION. In past years, legislation has been proposed that
would have adversely modified the federal taxation of certain annuities. For
example, one such proposal would have changed the tax treatment of non-qualified
annuities that did not have "substantial life contingencies" by taxing income as
it is credited to the annuity. Although as of the date of this prospectus
Congress is not considering any legislation regarding taxation of annuities,
there is always the possibility that the tax treatment of annuities could change
by legislation or other means (such as IRS regulations, revenue rulings,
judicial decisions, etc.). Moreover, it is also possible that any change could
be retroactive (that is, effective prior to the date of the change).
- --------------------------------------------------------------------------------
TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A CONTRACT
A transfer of ownership of a Contract, the
designation of an annuitant, payee or other
beneficiary who is not also the owner, the selection
of certain retirement dates or the exchange of a
Contract may result in certain tax consequences to
the owner that are not discussed herein. An owner
contemplating any such transfer, assignment,
selection or exchange of a Contract should contact a
competent tax adviser with respect to the potential
tax effects of such a transaction.
- --------------------------------------------------------------------------------

24
<PAGE>
WITHHOLDING Pension and annuity distributions generally are
subject to withholding for the recipient's federal
income tax liability at rates that vary according to
the type of distribution and the recipient's tax
status. Recipients, however, generally are provided
the opportunity to elect not to have tax withheld
from distributions. Effective January 1, 1993,
distributions from certain qualified plans are
generally subject to mandatory withholding. Certain
states also require withholding of state income tax
whenever federal income tax is withheld.
- --------------------------------------------------------------------------------
MULTIPLE CONTRACTS All non-qualified deferred annuity contracts entered
into after October 21, 1988 that are issued by the
Company (or its affiliates) to the same owner during
any calendar year are treated as one annuity
Contract for purposes of determining the amount
includible in gross income under Section 72(e). This
rule could affect the time when income is taxable
and the amount that might be subject to the 10%
penalty tax described above. In addition, the
Treasury Department has specific authority to issue
regulations that prevent the avoidance of Section
72(e) through the serial purchase of annuity
contracts or otherwise. There may also be other
situations in which the Treasury may conclude that
it would be appropriate to aggregate two or more
annuity contracts purchased by the same owner.
Accordingly, a Contract owner should consult a
competent tax adviser before purchasing more than
one annuity contract.
- --------------------------------------------------------------------------------
TAXATION OF QUALIFIED PLANS The Contracts are designed for use with several
types of qualified plans. The tax rules applicable
to participants in these qualified plans vary
according to the type of plan and the terms and
conditions of the plan itself. Special favorable tax
treatment may be available for certain types of
contributions and distributions. Adverse tax
consequences may result from contributions in excess
of specified limits; distributions prior to age
59 1/2 (subject to certain exceptions);
distributions that do not conform to specified
commencement and minimum distribution rules;
aggregate distributions in excess of a specified
annual amount; and in other specified circumstances.
Therefore, no attempt is made to provide more than
general information about the use of the Contracts
with the various types of qualified retirement
plans. Contract owners, the annuitants, and
beneficiaries are cautioned that the rights of any
person to any benefits under these qualified
retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of
the terms and conditions of the Contract, but the
Company shall not be bound by the terms and
conditions of such plans to the extent such terms
contradict the Contract, unless the Company
consents. Some retirement plans are subject to
distribution and other requirements that are not
incorporated into our Contract administration
procedures. Owners, participants and beneficiaries
are responsible for determining that contributions,
distributions and other transactions with respect to
the Contracts comply with applicable law. Brief
descriptions follow of the various types of
qualified retirement plans available in connection
with a Contract. The Company will amend the Contract
as necessary to conform it to the requirements of
the Code.

CORPORATE PENSION AND PROFIT SHARING PLANS AND H.R. 10 PLANS. Section 401(a) of
the Code permits corporate employers to establish various types of retirement
plans for employees, and permits self-employed individuals to establish these
plans for themselves and their employees. These retirement plans may permit the
purchase of the Contracts to accumulate retirement savings under the plans.
Adverse tax or other legal consequences to the plan, to the participant or both
may result if this Contract is assigned or transferred to any individual as a
means to provide benefit payments, unless the plan complies with all legal
requirements applicable to such benefits prior to transfer of the Contract.
Employers intending to use the Contract with such plans should seek competent
advice.

INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
"Individual Retirement Annuity" or "IRA". These IRAs are subject to limits on
the amount that may be contributed, the persons who may be eligible and on the
time when distributions may commence. Also, distributions from certain other
types of qualified retirement plans may be "rolled over" on a tax-deferred basis
into an IRA. Sales of the Contract for use with IRAs may be subject to special
requirements of the Internal Revenue Service. Employers may establish Simplified
Employee Pension (SEP) Plans to provide IRA contributions on behalf of their
employees.

SIMPLE RETIREMENT ACCOUNTS. Beginning January 1, 1997, certain small employers
may establish Simple Retirement Accounts as provided by Section 408(p) of the
Code, under which employees may elect to defer up to $6,000 (as increased for
cost of living adjustments) as a percentage of compensation. The sponsoring
employer is required to

25
<PAGE>
make a matching contribution on behalf of contributing employees. Distributions
from a Simple Retirement Account are subject to the same restrictions that apply
to IRA distributions and are taxed as ordinary income. Subject to certain
exceptions, premature distributions prior to age 59 1/2 are subject to a 10%
penalty tax, which is increased to 25% if the distribution occurs within the
first two years after the commencement of the employee's participation in the
plan. The failure of the Simple Retirement Account to meet Code requirements may
result in adverse tax consequences.

TAX SHELTERED ANNUITIES. Section 403(b) of the Code allows employees of certain
Section 501(c)(3) organizations and public schools to exclude from their gross
income the premiums paid, within certain limits, on a Contract that will provide
an annuity for the employee's retirement. These premiums may be subject to FICA
(social security) tax. Code section 403(b)(11) restricts the distribution under
Code section 403(b) annuity contracts of: (1) elective contributions made in
years beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings in such years on amounts held as of the last year beginning
before January 1, 1989. Distribution of those amounts may only occur upon death
of the employee, attainment of age 59 1/2, separation from service, disability,
or financial hardship. In addition, income attributable to elective
contributions may not be distributed in the case of hardship.

RESTRICTIONS UNDER QUALIFIED CONTRACTS. Other restrictions with respect to the
election, commencement or distribution of benefits may apply under Qualified
Contracts or under the terms of the plans in respect of which Qualified
Contracts are issued.
- --------------------------------------------------------------------------------
POSSIBLE CHARGE FOR THE COMPANY'S TAXES
At the present time, the Company makes no charge to
the Subaccounts for any Federal, state or local
taxes that the Company incurs which may be
attributable to such Subaccounts or the Contracts.
The Company, however, reserves the right in the
future to make a charge for any such tax or other
economic burden resulting from the application of
the tax laws that it determines to be properly
attributable to the Subaccounts or to the Contracts.
- --------------------------------------------------------------------------------
OTHER TAX CONSEQUENCES As noted above, the foregoing comments about the
Federal tax consequences under these Contracts are
not exhaustive, and special rules are provided with
respect to other tax situations not discussed in the
Prospectus. Further, the Federal income tax
consequences discussed herein reflect the Company's
understanding of current law and the law may change.
Federal estate and state and local estate,
inheritance and other tax consequences of ownership
or receipt of distributions under a Contract depend
on the individual circumstances of each owner or
recipient of the distribution. A competent tax
adviser should be consulted for further information.
- --------------------------------------------------------------------------------
DISTRIBUTION OF THE CONTRACTS
- --------------------------------------------------------------------------------
The Contracts will be offered to the public on a
continuous basis. The Company does not anticipate
discontinuing the offering of the Contracts, but
reserves the right to discontinue the offering.
Applications for Contracts are solicited by agents
who are licensed by applicable state insurance
authorities to sell the Company's variable annuity
contracts and who are also registered
representatives of EquiTrust Marketing,
broker/dealers having selling agreements with
EquiTrust Marketing or broker/dealers having selling
agreements with such broker/dealers. EquiTrust
Marketing (formerly FBL Marketing Services, Inc.) is
registered with the SEC under the Securities
Exchange Act of 1934 as a broker-dealer and is a
member of the National Association of Securities
Dealers, Inc.

EquiTrust Marketing acts as the Principal
Underwriter, as defined in the 1940 Act, of the
Contracts for the Account pursuant to an
Underwriting Agreement between the Company and
EquiTrust Marketing. EquiTrust Marketing is not
obligated to sell any specific number of Contracts.
EquiTrust Marketing's principal business address is
the same as that of the Company.

The Company may pay broker/dealers with selling
agreements up to an amount equal to 8.5% of the
premiums paid under a Contract during the first
Contract year, 3% of the premiums paid in the second
through ninth Contract years and 1% of the premiums
paid in the tenth and subsequent Contract years. The
Company also may pay other distribution expenses
such as production incentive bonuses, agent's

26
<PAGE>
insurance and pension benefits, and agency expense
allowances. These distribution expenses do not
result in any additional charges against the
Contracts that are not described under "Charges and
Deductions."
- --------------------------------------------------------------------------------
LEGAL PROCEEDINGS
- --------------------------------------------------------------------------------
There are no legal proceedings to which the Account
is a party or the assets of the Account are subject.
The Company is not involved in any litigation that
is of material importance in relation to its total
assets or that relates to the Account.
- --------------------------------------------------------------------------------
VOTING RIGHTS
- --------------------------------------------------------------------------------
In accordance with its view of current applicable
law, the Company will vote the Fund shares held in
the Account at regular and special shareholder
meetings of the Funds, 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 accumulated value is allocated. The owner
only has voting interest prior to the retirement
date. For each owner, the number of votes
attributable to a Subaccount will be determined by
dividing the accumulated value attributable to that
owner's Contract in that Subaccount by the net asset
value per share of the Investment Option in which
that Subaccount invests.

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

Fund 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
Contracts 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.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The statutory-basis balance sheets of the Company at
December 31, 1997 and 1996, and the related
statutory-basis statements of income, changes in
stockholders' equity and cash flows for the years
then ended, as well as the related Report of
Independent Auditors are contained in the Statement
of Additional Information.

It is anticipated that the Variable Account will
commence operations in 1998; accordingly, no
financial statements currently exist.

[Financial statements to be provided by amendment.]

27
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION TABLE OF
CONTENTS
- --------------------------------------------------------------------------------

PAGE

<TABLE>
<S> <C>
GENERAL INFORMATION ABOUT THE COMPANY............................................................. 1
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ADDITIONAL CONTRACT PROVISIONS.................................................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
The Contract......................................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
Incontestability..................................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
Misstatement of Age or Sex........................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
Non-Participation.................................................... 1
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
CALCULATION OF YIELDS AND TOTAL RETURNS........................................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
Money Market Subaccount Yields....................................... 1
</TABLE>

<TABLE>
<S> <C> <C>
Other Subaccount Yields.............................................. 3
</TABLE>

<TABLE>
<S> <C> <C>
Average Annual Total Returns......................................... 4
</TABLE>

<TABLE>
<S> <C> <C>
Other Total Returns.................................................. 6
</TABLE>

<TABLE>
<S> <C> <C>
Effect of the Administrative Charge on Performance Data.............. 6
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
LEGAL MATTERS..................................................................................... 6
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
EXPERTS........................................................................................... 7
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
OTHER INFORMATION................................................................................. 7
</TABLE>

- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
FINANCIAL STATEMENTS.............................................................................. 7
</TABLE>

- --------------------------------------------------------------------------------

29
<PAGE>
EQUITRUST LIFE INSURANCE COMPANY
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

EQUITRUST LIFE INSURANCE COMPANY
5400 University Avenue
West Des Moines, Iowa 50266
1-888-349-4656
EQUITRUST LIFE ANNUITY ACCOUNT
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT

This Statement of Additional Information contains information in addition to the
information described in the Prospectus for the flexible premium deferred
variable annuity contract (the "Contract") offered by EquiTrust Life Insurance
Company (the "Company"). This Statement of Additional Information is not a
Prospectus, and it should be read only in conjunction with the Prospectuses for
the Contract, EquiTrust Variable Insurance Series Fund, and . The
Prospectuses are dated the same as this Statement of Additional information. You
may obtain a copy of the Prospectuses by writing or calling us at our address or
phone number shown above.

July , 1998
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<S> <C>
GENERAL INFORMATION ABOUT THE COMPANY............................................................... 1
ADDITIONAL CONTRACT PROVISIONS...................................................................... 1
The Contract...................................................................................... 1
Incontestability.................................................................................. 1
Misstatement of Age or Sex........................................................................ 1
Non-Participation................................................................................. 1
CALCULATION OF YIELDS AND TOTAL RETURNS............................................................. 1
Money Market Subaccount Yields.................................................................... 1
Other Subaccount Yields........................................................................... 3
Average Annual Total Returns...................................................................... 4
Other Total Returns............................................................................... 6
Effect of the Administrative Fee On Performance Data.............................................. 6
LEGAL MATTERS....................................................................................... 6
EXPERTS............................................................................................. 7
OTHER INFORMATION................................................................................... 7
FINANCIAL STATEMENTS................................................................................ 7
</TABLE>
<PAGE>
GENERAL INFORMATION ABOUT THE COMPANY

One hundred percent of the outstanding voting shares of the Company are owned by
Farm Bureau Life Insurance Company which is 100% owned by FBL Financial Group,
Inc. At December 31, 1997, Iowa Farm Bureau Federation owned 66.36% of the
outstanding voting stock of FBL Financial Group, Inc.

Iowa Farm Bureau Federation is an Iowa not-for-profit corporation, the members
of which are county Farm Bureau organizations and their individual members. Iowa
Farm Bureau Federation is primarily engaged, through various divisions and
subsidiaries, in the formulation, analysis and promotion of programs (at local,
state, national and international levels) that are designed to foster the
educational, social and economic advancement of its members. The principal
offices of Iowa Farm Bureau Federation are at 5400 University Avenue, West Des
Moines, Iowa 50266.

ADDITIONAL CONTRACT PROVISIONS

THE CONTRACT

The application and all other attached papers are part of the Contract. The
statements made in the application are deemed representations and not
warranties. The Company will not use any statement in defense of a claim or to
void the Contract unless it is contained in the application.

INCONTESTABILITY

The Company will not contest the Contract from its Contract date.

MISSTATEMENT OF AGE OR SEX

If the age or sex of the annuitant has been misstated, the amount which will be
paid is that which the proceeds would have purchased at the correct age and sex.

NON-PARTICIPATION

The Contracts are not eligible for dividends and will not participate in the
Company's divisible surplus.

CALCULATION OF YIELDS AND TOTAL RETURNS

From time to time, the Company may disclose yields, total returns and other
performance data pertaining to the contracts for a Subaccount. Such performance
data will be computed, or accompanied by performance data computed, in
accordance with the standards defined by the SEC.

MONEY MARKET SUBACCOUNT YIELDS

From time to time, advertisements and sales literature may quote the current
annualized yield of the Money Market Subaccount for a seven-day period in a
manner which does not take into consideration any realized or unrealized gains
or losses on shares of the Money Market Investment Option or on its portfolio
securities.

This current annualized yield is computed by determining the net change
(exclusive or realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the seven-day period in the value
of a hypothetical account under a Contract having a balance of 1 unit of the
Money Market Subaccount at the beginning of the period, dividing such net change
in account value by the value of the hypothetical account at the beginning of
the period to determine the base period return, and annualizing this quotient on
a 365-day basis.

1
<PAGE>
The net change in account value reflects: 1) net income from the Investment
Option attributable to the hypothetical account; and 2) charges and deductions
imposed under the Contract which are attributable to the hypothetical account.
The charges and deductions include the per unit charges for the hypothetical
account for: 1) the annual administrative fee and 2) the mortality and expense
risk charge. For purposes of calculating current yields for a Contract, an
average per unit administrative fee is used based on the $45 administrative fee
deducted at the beginning of each Contract Year. Current Yield will be
calculated according to the following formula:

<TABLE>
<S> <C> <C>
Current Yield = ((NCS - ES)/UV) X (365/7)
Where:
NCS = the net change in the value of the Investment Option (exclusive or realized gains
or losses on the sale of securities and unrealized appreciation and depreciation)
for the seven-day period attributable to a hypothetical account having a balance of
1 subaccount unit.
ES = per unit expenses attributable to the hypothetical account for the seven-day
period.
UV = the unit value for the first day of the seven-day period.

Effective Yield = (1 + ((NCS-ES)/UV))365/7 - 1
Where:
NCS = the net change in the value of the Investment Option (exclusive of realized gains
or losses on the sale of securities and unrealized appreciation and depreciation)
for the seven-day period attributable to a hypothetical account having a balance of
1 subaccount unit.
ES = per unit expenses attributable to the hypothetical account for the seven-day
period.
UV = the unit value for the first day of the seven-day period.
</TABLE>

Because of the charges and deductions imposed under the Contract, the yield for
the Money Market Subaccount will be lower than the yield for the Money Market
Investment Option.

2
<PAGE>
- -

The current and effective yields on amounts held in the Money Market Subaccount
normally will fluctuate on a daily basis. THEREFORE, THE DISCLOSED YIELD FOR ANY
GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF FUTURE YIELDS OR
RATES OF RETURN. The Money Market Subaccount's actual yield is affected by
changes in interest rates on money market securities, average portfolio maturity
of the Money Market Investment Option, the types of quality of portfolio
securities held by the Money Market Investment Option and the Money Market
Investment Option operating expenses. Yields on amounts held in the Money Market
Subaccount may also be presented for periods other than a seven-day period.

OTHER SUBACCOUNT YIELDS

From time to time, sales literature or advertisements may quote the current
annualized yield of one or more of the subaccounts (except the Money Market
Subaccount) for a Contract for 30-day or one month periods. The annualized yield
or a subaccount refers to income generated by the subaccount during a 30-day or
one-month period is assumed to be generated each period over a 12-month period.

The yield is computed by: 1) dividing net investment income of the Investment
Option attributable to the subaccount units less subaccount expenses for the
period; by 2) the maximum offering price per unit on the last day of the period
times the daily average number of units outstanding for the period; by 3)
compounding that yield for a six-month period; and by 4) multiplying that result
by 2. Expenses attributable to the subaccount include the annual administrative
fee and the mortality and expense risk charge. The yield calculation assumes an
administrative fee of $45 per year per Contract deducted at the beginning of
each Contract year. For purposes of calculating the 30-day or one-month yield,
an average administrative fee per dollar of Contract value in the Account issued
to determine the amount of the charge attributable to the subaccount for the
30-day or one-month period. The 30-day or one-month yield is calculated
according to the following formula:

<TABLE>
<S> <C> <C>
Yield = 2 X ((NI - ES)/(U X UV)) + 1)6 - 1
Where:
NI = net income of the Investment Option for the 30-day or one-month period attributable
to the subaccount's units.
ES = expenses of the subaccount for the 30-day or one-month period.
U = the average number of units outstanding.
UV = the unit value at the close of the last day in the 30-day one-month period.
</TABLE>

3
<PAGE>
Because of the charges and deductions imposed under the Contracts, the yield for
the subaccount will be lower that the yield for the corresponding Investment
Option.

The yield on the amounts held in the subaccounts normally will fluctuate over
time. THEREFORE, THE DISCLOSED YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN
INDICATION OR REPRESENTATION OF FUTURE YIELDS OR RATES OF RETURN. A subaccount's
actual yield is affected by the types and quality of Investment Option
securities held by the corresponding Investment Option and its operating
expenses.

Yield calculations do not take into account the Surrender Charge under the
Contract equal to 1% to 8.5% of the amount withdrawn or surrendered during the
first nine Contract years. For partial withdrawals in each Contract year after
the first Contract year, up to 10% of the accumulated value on the most recent
Contract Anniversary may be withdrawn without a current surrender charge.

AVERAGE ANNUAL TOTAL RETURNS

From time to time, sales literature or advertisements may also quote average
annual total returns for one or more of the subaccounts for various periods of
time.

When a subaccount has been in operation for 1, 5 and 10 years, respectively, the
average annual total return for these periods will be provided. Average annual
total returns for other periods of time may, from time to time, also be
disclosed.

Standard average annual total returns represent the average annual compounded
rates of return that would equate an initial investment of $1,000 under a
Contract to the redemption value of that investment as of the last day of each
of the periods. The ending date for each period for which total return
quotations are provided will be for the most recent month-end practicable,
considering the type and media of the communication that will be stated in the
communication.

Standard average annual total returns will be calculated using subaccount unit
values which the Company calculates on each valuation day based on the
performance of the subaccount's underlying portfolio, the deductions for the
mortality and expense risk charge, and the annual administrative fee. The
calculation assumes that the administrative fee is $45 per year per Contract
deducted at the beginning of each Contract year. For purposes of calculating
average annual total return, an average per dollar administrative fee
attributable to the hypothetical account for the period is used.

4
<PAGE>
The calculation also assumes surrender of the Contract at the end of the period
for the return quotation. Total returns will therefore reflect a deduction of
the surrender charge for any period less than ten years. The total return will
then be calculated according to the following formula:

<TABLE>
<S> <C> <C>
TR = ((ERV/P)/N)-1
Where:
TR = the average annual total return net of subaccount recurring charges.
EHV = the ending redeemable value (net of any applicable surrender charge) of the
hypothetical account at the end of the period.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
</TABLE>

From time to time, sales literature or advertisements may also quote average
annual total returns for periods prior to the date the Account commenced
operations. Such performance information for the subaccounts will be calculated
based on the performance of the Investment Option and the assumption that the
subaccounts were in existence for the same periods as those indicated for the
Investment Option, with the level of Contract charges that were in effect at the
inception of the subaccounts.

Such average annual total return information for the Subaccounts is as follows:

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
DATE OF INCEPTION OF
FOR THE 1-YEAR PERIOD FOR THE 5-YEAR PERIOD INVESTMENT OPTION
SUBACCOUNT ENDED 12/31/97 ENDED 12/31/97 TO 12/31/97
- ----------------------------------- ----------------------- ----------------------- -------------------------
<S> <C> <C> <C>
Value Growth.......................
High Grade Bond....................
High Yield Bond....................
Money Market (1)...................

Blue Chip (2)......................
</TABLE>

- ------------------------
(1) The Money Market Portfolio commenced operations on February 20, 1990.

(2) The Blue Chip Portfolio commenced operations on October 15, 1990.

5
<PAGE>
OTHER TOTAL RETURNS

From time to time, sales literature or advertisements may also quote average
annual total returns that do not reflect the surrender charge. These are
calculated in exactly the same way as average annual total returns described
above, except that the ending redeemable value of the hypothetical account for
the period is replaced with an ending value for the period that does not take
into account any charges on amounts surrendered or withdrawn.

The Company may disclose cumulative total returns in conjunction with the
standard formats described above. The cumulative total returns will be
calculated using the following formula:

<TABLE>
<S> <C> <C>
CTR = (ERV/P) - 1
Where:
CTR = The cumulative total return net of subaccount recurring charges for the period.
ERV = The ending redeemable value of the hypothetical investment at the end of the
period.
P = A hypothetical single payment of $1,000.
</TABLE>

EFFECT OF THE ADMINISTRATIVE FEE ON PERFORMANCE DATA

The Contract provides for a $45 annual administrative fee to be deducted
annually at the beginning of each Contract Year, from the subaccounts and the
Declared Interest Option based, on the proportion that the value of each such
account bears to the total cash value. For purposes of reflecting the
administrative fee in yield and total return quotations, the annual charge is
converted into a per-dollar per-day charge based on the average contract value
in the Account of all Contracts on the last day of the period for which
quotations are provided. The per-dollar per-day average charge will then be
adjusted to reflect the basis upon which the particular quotation is calculated.

LEGAL MATTERS

All matters relating to Iowa law pertaining to the Contracts, including the
validity of the Contracts and the Company's authority to issue the Contracts,
have been passed upon by Stephen M. Morain, Esquire, Senior Vice President and
General Counsel of the Company. Sutherland, Asbill & Brennan LLP, Washington
D.C. has provided advice on certain matters relating to the federal securities
laws.

6
<PAGE>
EXPERTS

The statutory basis financial statements of the Company at December 31, 1997 and
1996 and for the years then ended, appearing herein, have been audited by Ernst
& ']Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

[Financial statements to be provided by amendment.]

OTHER INFORMATION

A registration statement has been filed with the SEC under the Securities Act of
1933 as amended, with respect to the Contracts discussed in this Statement of
Additional Information. Not all the information set forth in the registration
statement, amendments and exhibits thereto has been included in this Statement
of Additional Information. Statements contained in this Statement of Additional
Information concerning the content of the Contracts and other legal instruments
are intended to be summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with the SEC.

FINANCIAL STATEMENTS

The Company's financial statements included in this Statement of Additional
Information should be considered only as bearing on the Company's ability to
meet its obligations under the Contracts. They should not be considered as
bearing on the investment performance of the assets held in the Account.

[Financial statements to be provided by amendment.]

7
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

All required financial statements are included in Part B.

(b) Exhibits

<TABLE>
<C> <C> <S>
(1) *Certified resolution of the board of directors of EquiTrust Life Insurance Company (the
"Company") establishing EquiTrust Life Annuity Account (the "Account").
(2) Not Applicable.
(3) Underwriting agreement among the Company, the Account and EquiTrust Marketing Services, Inc.
("EquiTrust Marketing").
(4) *(a) Contract Form
(5) (a) Contract Application.
(6) *(a) Articles of Incorporation of the Company.
*(b) By-Laws of the Company.
(7) Not Applicable.
(8) Participation agreement between the registrant and the Company.
(9) *Opinion and Consent of Stephen M. Morain, Esquire.
(10) (a) Consent of Sutherland, Asbill & Brennan LLP
(b) Consent of Ernst & Young LLP.
*(c) Opinion and Consent of Christopher G. Daniels, FSA, MSAA, Life Product Development and
Pricing Vice President.
(11) Not Applicable.
(12) Not Applicable.
(13) Not Applicable.
(14) *Powers of Attorney.
</TABLE>

- ------------------------
* Attached as an exhibit.

ITEM 25. DIRECTORS AND OFFICERS OF THE COMPANY

Incorporated herein by reference to the prospectus in the Form S-6 registration
statement (File No. 333-45813) for certain variable life insurance contracts
issued by the Company filed with the Commission on February 6, 1998.

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT

The registrant is a segregated asset account of the Company and is therefore
owned and controlled by the Company. All of the Company's outstanding voting
common stock is owned by FBL Financial Group, Inc. This Company and its
affiliates are described more fully in the prospectus included in this
registration statement. Various companies and other entities controlled by FBL
Financial Group, Inc., may therefore be considered to be under common control
with the registrant or the Company. Such other companies and entities, together
with the identity of the owners of their common stock (where applicable), are
set forth on the following diagram.

SEE ORGANIZATION CHART ON FOLLOWING PAGE

1
<PAGE>
FBL FINANCIAL GROUP, INC.

OWNERSHIP CHART
01/01/98

[CHART]

2
<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS

As of the date of the prospectus included in this registration statement, no
Contracts have been sold.

ITEM 28. INDEMNIFICATION

Article XII of the Company's By-Laws provides for the indemnification by the
Company of any person who is a party or who is threatened to be made a party to
any threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director or
officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or enterprise, against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Article
XII also provides for the indemnification by the Company of any person who was
or is a party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or another enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, except that no indemnification will be made in respect of any claim,
issue, or matter as to which such person shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the Company
unless and only to the extent that the court in which such action or suit was
brought determines upon application that, despite the adjudication of liability
but in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.

Insofar as indemnification for liability arising under the Securities Act of
1933 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.

ITEM 29. PRINCIPAL UNDERWRITER

(a) EquiTrust Marketing Services, Inc. is the registrant's principal
underwriter and also serves as the principal underwriter of certain variable
life insurance contracts issued by Farm Bureau Life Variable Account, Farm
Bureau Life Variable Account II and the Company.

(b) Officers and Directors of EquiTrust Marketing Services, Inc.

<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS ADDRESS* POSITIONS AND OFFICES WITH THE COMPANY
- ------------------------------------------------------ ------------------------------------------------------------------------
<S> <C>
Stephen M. Morain General Counsel and Assistant Secretary, Iowa Farm Bureau Federation;
Senior Vice President, General Counsel and Director General Counsel, Secretary and Director, Farm Bureau Management
Corporation; Senior Vice President, General Counsel and Director, FBL
Financial Group, Inc.; Senior Vice President and General Counsel, Farm
Bureau Life Insurance Company and other affiliates of the foregoing.
Holds various positions with affiliates of the foregoing. Director,
Computer Aided Design Software, Inc., and Iowa Business Development
Finance Corporation Chairman, Edge Technologies, Inc.
William J. Oddy Chief Operating Officer, FBL Financial Group, Inc., Farm Bureau Life
Chief Operating Officer and Director Insurance Company, Western Farm Bureau Life Insurance Company and other
affiliates of the foregoing. Holds various positions with affiliates of
the foregoing.
</TABLE>

3
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS ADDRESS* POSITIONS AND OFFICES WITH THE COMPANY
- ------------------------------------------------------ ------------------------------------------------------------------------
<S> <C>
Dennis M. Marker Investment Vice President, Administration, FBL Financial Group, Inc.
Investment Vice President, Administration, Secretary Holds various positions with affiliates of the foregoing.
and Director
Richard D. Warming Chief Investment Officer and Assistant Treasurer, Farm Bureau Life
Chief Investment Officer and Director Insurance Company, FBL Financial Group, Inc., Western Farm Bureau Life
Insurance Company and other affiliates of the foregoing. Holds various
positions with affiliates of the foregoing.
Thomas R. Gibson Chief Executive Officer and Director, FBL Financial Group, Inc.; Chief
Chief Executive Officer and Director Executive Officer, Farm Bureau Life Insurance Company, Western Farm
Bureau Life Insurance Company and other affiliates of the foregoing.
Holds various positions with affiliates of the foregoing.
Timothy J. Hoffman Chief Property/Casualty Officer, FBL Financial Group, Inc.; Vice
Vice President and Director President, Farm Bureau Life Insurance Company, Western Farm Bureau Life
Insurance Company and other affiliates of the foregoing. Holds various
positions with affiliates of the foregoing.
James W. Noyce Chief Financial Officer, Farm Bureau Life Insurance Company, FBL
Chief Financial Officer, Treasurer and Director Financial Group, Inc., Western Farm Bureau Life Insurance Company and
other affiliates of the foregoing. Holds various positions with
affiliates of the foregoing.
Thomas E. Burlingame Vice President - Associate General Counsel, FBL Financial Group, Inc.
Vice President - Associate General Counsel and and FBL Investment Advisory Services, Inc.
Director
F. Walter Tomenga Vice President - Corporate Affairs and Marketing Services, FBL Financial
Vice President and Director Group, Inc. Holds various positions with affiliates of the foregoing.
Lynn E. Wilson Vice President - Life Sales, FBL Financial Group, Inc. Holds various
President and Director positions with affiliates of the foregoing.
Sue A. Cornick Market Conduct and Mutual Funds Vice President and Assistant Secretary,
Market Conduct and Mutual Funds Vice President and FBL Investment Advisory Services, Inc., FBL Money Market Fund, Inc.,
Assistant Secretary FBL Series Fund, Inc. and FBL Variable Insurance Series Fund.
Kristi Rojohn Assistant Mutual Funds Manager and Assistant Secretary, FBL Investment
Assistant Mutual Funds Manager and Assistant Secretary Advisory Services, Inc.; Assistant Secretary, FBL Money Market Fund,
Inc., FBL Series Fund, Inc. and FBL Variable Insurance SeriesFund.
Elaine A. Followwill Compliance Assistant and Assistant Secretary, FBL Investment Advisory
Compliance Assistant and Assistant Secretary Services, Inc.; Assistant Secretary, FBL Money Market Fund, Inc., FBL
Series Fund, Inc. and FBL Variable Insurance Series Fund
Roger F. Grefe Investment Management Vice President, FBL Financial Group, Inc. and FBL
Investment Management Vice President Investment Advisory Services, Inc.
Lou Ann Sandburg Vice President, Investments, FBL Financial Group, Inc. and FBL
Vice President, Investments Investment Advisory Services, Inc.
Robert Rummelhart Fixed Income Vice President, FBL Financial Group, Inc. and FBL
Fixed Income Vice President Investment Advisory Services, Inc.
</TABLE>

4
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS ADDRESS* POSITIONS AND OFFICES WITH THE COMPANY
- ------------------------------------------------------ ------------------------------------------------------------------------
<S> <C>
Charles T. Happel Portfolio Manager, FBL Investment Advisory Services, Inc.
Portfolio Manager
Laura Kellen Beebe Portfolio Manager, FBL Investment Advisory Services, Inc.
Portfolio Manager
</TABLE>

- ------------------------
* The principal business address of all of the persons listed above is 5400
University Avenue, West Des Moines, Iowa 50266.

ITEM 30. LOCATION BOOKS AND RECORDS

All of the accounts, books, records or other documents required to be kept by
Section 31(a) of the Investment Company Act of 1940 and rules thereunder, are
maintained by the Company at 5400 University Avenue, West Des Moines, Iowa
50266.

ITEM 31. MANAGEMENT SERVICES

All management contracts are discussed in Part A or Part B of this registration
statement.

ITEM 32. UNDERTAKINGS AND REPRESENTATIONS

(a) The registrant undertakes that it will file a post-effective amendment
to this registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more than
16 months old for as long as purchase payments under the contracts offered
herein are being accepted.

(b) The registrant undertakes that it will include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a statement of additional information, or (2) a
post card or similar written communication affixed to or included in the
prospectus that the applicant can remove and send to the Company for a statement
of additional information.

(c) The registrant undertakes to deliver any statement of additional
information and any financial statements required to be made available under
this Form N-4 promptly upon written or oral request to the Company at the
address or phone number listed in the prospectus.

(d) The Company represents that in connection with its offering of the
contracts as funding vehicles for retirement plans meeting the requirements of
Section 403(b) of the Internal Revenue Code of 1986, it is relying on a no-
action letter dated November 28, 1988, to the American Council of Life Insurance
(Ref. No. IP-6-88) regarding Sections 22(e), 27(c)(1), and 27(d) of the
Investment Company Act of 1940, and that paragraphs numbered (1) through (4) of
that letter will be complied with.

(e) The Company represents that the aggregate charges under the Contracts
are reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by the Company.

5
<PAGE>
SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, EquiTrust Life Annuity Account has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized in the City of West Des Moines, State of Iowa, on the 6th day of
January, 1998.

EquiTrust Life Insurance Company
EquiTrust Life Annuity Account

By: /s/ EDWARD M. WIEDERSTEIN

-----------------------------------
Edward M. Wiederstein
PRESIDENT
EquiTrust Life Insurance Company

Attest: /s/ RICHARD D. HARRIS

---------------------------------
Richard D. Harris
SENIOR VICE PRESIDENT AND
SECRETARY-TREASURER
EquiTrust Life Insurance Company

As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities indicated on the dates
set forth below.

SIGNATURE TITLE DATE
- ----------------------------------- ------------------------- ----------------

/s/ EDWARD M. WIEDERSTEIN President and Director
- ----------------------------------- [Principal Executive January 6, 1998
Edward M. Wiederstein Officer]

Senior Vice President and
/s/ RICHARD D. HARRIS Secretary-Treasurer
- ----------------------------------- [Principal Financial January 6, 1998
Richard D. Harris Officer]

/s/ JAMES W. NOYCE Chief Financial Officer
- ----------------------------------- [Principal Accounting January 6, 1998
James W. Noyce Officer]

/s/ THOMAS R. GIBSON
- ----------------------------------- Director January 6, 1998
Thomas R. Gibson

/s/ TIMOTHY J. HOFFMAN
- ----------------------------------- Director January 6, 1998
Timothy J. Hoffman

/s/ STEPHEN M. MORAIN
- ----------------------------------- Director January 6, 1998
Stephen M. Morain

/s/ WILLIAM J. ODDY
- ----------------------------------- Director January 6, 1998
William J. Oddy

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, EquiTrust Life
Annuity Account, has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized in the City of West Des
Moines, State of Iowa, on the 6th day of January, 1998.

EquiTrust Life Annuity Account
(Registrant)

By: EquiTrust Life Insurance Company
(Depositor)

By: /s/ EDWARD M. WIEDERSTEIN

-----------------------------------
Edward M. Wiederstein
PRESIDENT
EquiTrust Life Insurance Company
<PAGE>
EXHIBIT INDEX

<TABLE>
<C> <S> <C>
1 Certified resolution of the board of directors of EquiTrust Life Insurance Company
establishing EquiTrust Life Annuity Account.

4(a) Contract Form

6(a) Articles of Incorporation of the Company.

6(b) By Laws of the Company.

9 Opinion and consent of Stephen M. Morain, Esquire.

10(c) Opinion and Consent of Christopher G. Daniels, FSA, MSAA, Life Product Development and
Pricing Vice President.

14 Powers of Attorney.
</TABLE>

<PAGE>

RESOLUTIONS ADOPTED BY
THE BOARD OF DIRECTORS OF
EQUITRUST LIFE INSURANCE COMPANY
January 6, 1998

RESOLVED, that the Board of Directors of EquiTrust Life Insurance Company (the
"Company"), hereby establishes a separate account, pursuant to the provisions of
Section 508A.1 of the Insurance Laws of the State of Iowa, designated Farm
Bureau Life Annuity Account (hereinafter the "Variable Account"), for the
following use and purposes, and subject to such conditions as hereinafter set
forth; and

FURTHER RESOLVED, that the Variable Account is established for the purpose of
providing for the issuance by the Company of certain variable life insurance
policies (the "Policies"), and shall constitute a funding medium to support
reserves under such Policies issued by the Company; and

FURTHER RESOLVED, that the income, gains and losses, realized or unrealized,
from assets allocated to the Variable Account shall be credited to or charged
against the Variable Account, without regard to other income, gains or losses of
the Company; and

FURTHER RESOLVED, that the assets of the Variable Account equal to the reserves
and other liabilities under the Policies and any other variable life insurance
policies issued through the Variable Account may not be charged with liabilities
arising out of any other business the Company may conduct; and

FURTHER RESOLVED, that the Variable Account shall be divided into investment
subaccounts (the "Subaccounts"), each of which shall invest in the shares of a
mutual fund portfolio, and net premiums under the Policies shall be allocated
among the Subaccounts in accordance with instructions received from owners of
the Policies; and

FURTHER RESOLVED, that the Executive Committee be, and hereby is, authorized
to add or remove any Subaccount of the Variable Account or add or remove any
mutual fund portfolio as may hereafter be deemed necessary or appropriate; and

FURTHER RESOLVED, that the income, gains and losses, realized or unrealized,
from assets allocated to each Subaccount of the Variable Account shall be
credited to or charged against such Subaccount of the Variable Account, without
regard to other income, gains or losses of any other Subaccount of the Variable
Account; and

1
<PAGE>

FURTHER RESOLVED, that the Executive Committee be, and it hereby is,
authorized to invest such amount or amounts of the Company's cash in the
Variable Account or in any Subaccount thereof or in any mutual fund portfolio
as may be deemed necessary or appropriate to facilitate the commencement of
the Variable Account's and/ or the mutual fund portfolio's operations and/or
to meet any minimum capital requirements under the Investment Company Act of
1940, as amended (the "1940 Act"); and

FURTHER RESOLVED, that the Chief Executive Officer, Chief Operating Officer, and
Chief Financial Officer (hereafter, the "empowered officers") and each of them,
with full power to act without the others, be, and they hereby are, severally
authorized to transfer cash from time to time from the Company's general account
to the Variable Account, or from the Variable Account to the general account, as
deemed necessary or appropriate and consistent with the terms of the Policies;
and

FURTHER RESOLVED, that the Board of Directors of the Company reserves the right
to change the designation of the Variable Account hereafter to such other
designation as it may deem necessary or appropriate; and

FURTHER RESOLVED, that the empowered officers and each of them, with full
power to act without the others, with such assistance from the Company's
independent certified public accountants, legal counsel and independent
consultants or others as they may require, be, and they hereby are, severally
authorized and directed to take all action necessary to: (a) register the
Variable Account as a unit investment trust under the 1940 Act; (b) register
the Policies under the Securities Act of 1933 (the "1933 Act"); and (c) take
all other actions that are necessary in connection with the offering of the
Policies for sale and the operation of the Variable Account in order to
comply with the 1940 Act, the 1933 Act, the Securities Exchange Act of 1934
and other applicable Federal laws, including the filing of any registration
statements, any undertakings, no-action requests, consents, applications for
exemptions from the 1940 Act or other applicable federal laws, and any
amendments to the foregoing as the empowered officers of the Company shall
deem necessary or appropriate; and

FURTHER RESOLVED, that the empowered officers and each of them, with full
power to act without the others, are severally authorized to prepare, execute
and cause to be filed with the Securities and Exchange Commission on behalf
of the Variable Account, and by the Company as sponsor and depositor, a
Notification of Registration on Form N-8A, and a N-4 registering the Variable
Account under the 1940 Act and registering the Policies under the 1933 Act,
and any and all amendments to the foregoing on behalf of the Variable Account
and the Company and on behalf of and as attorneys-in-fact for the empowered
officers and/ or any other officer of the Company; and

FURTHER RESOLVED, that Stephen M. Morain, Senior Vice President and General
Counsel (and any successor to such position), is duly appointed as agent for
service under any such registration statement, duly authorized to receive
communications and notices from the Securities and Exchange Commission with
respect thereto; and

2
<PAGE>

FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are severally authorized on behalf of the Variable
Account and on behalf of the Company to take any and all such action that each
of them may deem necessary or advisable in order to offer and sell the Policies,
including any registrations, filings and qualifications both of the Company, its
officers, agents and employees, and of the Policies, under the insurance and
securities laws of any of the states of the United States of America or other
jurisdictions, and in connection therewith to prepare, execute, deliver and file
all such applications, requests, undertakings, reports, covenants, resolutions,
applications for exemptions, consents to service of process and other papers and
instruments as may be required under such laws, and to take any and all further
action which such officers or legal counsel of the Company may deem necessary or
desirable (including entering into whatever agreements and contracts may be
necessary) in order to maintain such registrations or qualifications for as long
as the officers or legal counsel deem it to be in the best interests of the
Variable Account and the Company; and

FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and they hereby are, severally authorized in the
names and on behalf of the Variable Account and the Company: (a) to execute and
file irrevocable written consents on the part of the Variable Account and of the
Company to be used in such states wherein such consents to service of process
may be required under the insurance or securities laws therein in connection
with the registration or qualification of the Policies; and (b) to appoint the
appropriate state official, or such other person as may be allowed by insurance
or securities laws, agent of the Variable Account and of the Company for the
purpose of receiving and accepting process; and

FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and hereby are, severally authorized to establish
procedures under which the Company will provide voting rights for owners of the
Policies with respect to securities owned by the Variable Account; and

FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are hereby severally authorized to execute such
agreement or agreements as deemed necessary and appropriate (a) with a qualified
entity under which such entity will be appointed principal underwriter and
distributor for the Policies, (b) with one or more qualified entities to provide
administrative services in connection with the establishment and maintenance

3
<PAGE>

of the Variable Account and the administration of the Policies, and (c) with the
designated mutual fund portfolios and/ or the principal underwriter and
distributor of such mutual fund portfolios for the purchase and redemption of
portfolio shares; and

FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are hereby severally authorized to execute and
deliver such agreements and other documents and do such acts and things as each
of them may deem necessary or desirable to carry out the foregoing resolutions
and the intent and purposes thereof.

<PAGE>

- --------------------------------------------------------------------------------

NON-PARTICIPATING
FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY POLICY

RETIREMENT BENEFIT PAYABLE ON THE RETIREMENT DATE. DEATH BENEFIT PAYABLE AT
DEATH BEFORE THE RETIREMENT DATE. FLEXIBLE PREMIUMS PAYABLE FOR THE
ANNUITANT'S LIFE OR UNTIL THE RETIREMENT DATE. THE ACCUMULATED VALUE IN THE
VARIABLE ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND
MAY INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. THE
VARIABLE FEATURES OF THIS POLICY ARE DESCRIBED ON PAGES 9 AND 10.

EquiTrust Life Insurance Company will pay the benefits of this policy subject
to all of its terms.

RIGHT TO EXAMINE POLICY

The owner may cancel this policy by delivering or mailing a written notice or
sending a telegram or fax to the agent through whom it was purchased or the
EquiTrust Life Insurance Company, 5400 University Avenue, West Des Moines,
Iowa 50266-5997 and by returning the policy or contract before midnight of
the twentieth day after the date you receive the policy. Notice given by mail
and return of the policy or contract by mail are effective on being
postmarked, properly addressed and postage prepaid. EquiTrust Life will
refund, within seven days after it receives the returned policy, an amount
equal to the greater of the premiums paid or the sum of:

a) the accumulated value of the policy on the date the policy is received at
the home office;
b) any administrative charges which were deducted; and
c) amounts approximating daily charges against the variable account.

Signed for and on behalf of EquiTrust Life Insurance Company at its home
office at 5400 University Avenue, West Des Moines, Iowa, 50266-5997, effective
as of the date of issue of this policy.

/s/ Edward M. Wiederstein /s/ Richard D. Harris
President Secretary

EQUITRUST LIFE INSURANCE COMPANY [LOGO]
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266-5997

- --------------------------------------------------------------------------------

<PAGE>

This policy is a legal contract between the owner and EquiTrust Life Insurance
Company.

READ YOUR POLICY CAREFULLY

INDEX OF MAJOR POLICY PROVISIONS

POLICY DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Annuitant; Age; Sex; Policy Number; Policy Date; Owner(s);
Normal Retirement Date; Interest Rates; Schedule of Forms
and Premiums; Schedule of Charges; Schedule of Investment
Options.

SECTION 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . Page 5
1.1 You or Your; 1.2 Annual Administrative Charge; 1.3
Annuitant; 1.4 Age; 1.5 Beneficiary; 1.6 Business Day; 1.7
Declared Interest Option; 1.8 Due Proof of Death; 1.9
Eligibility for Waiver of Surrender Charge; 1.10 Fund;
1.11 General Account; 1.12 Home Office; 1.13 Owner;
1.14 Physician; 1.15 Policy Anniversary; 1.16 Policy
Date; 1.17 Policy Year; 1.18 Retirement Date; 1.19 SEC;
1.20 Surrender Charge; 1.21 Qualified Nursing Care Center;
1.22 Valuation Period; 1.23 Variable Account; 1.24 We, Our,
Us or the Company.

SECTION 2 - THE CONTRACT. . . . . . . . . . . . . . . . . . . . . . . Page 6
2.1 Retirement Date; 2.2 Contract; 2.3 Modification; 2.4
Incontestable Clause; 2.5 Misstatement of Age or Sex; 2.6
Return of Policy and Policy Settlement; 2.7 Termination;
2.8 Non-Participation.

SECTION 3 - OWNERSHIP AND BENEFICIARIES . . . . . . . . . . . . . . . Page 7
3.1 Ownership; 3.2 Beneficiary; 3.3 Change of Owner or
Beneficiary; 3.4 Assignment.

SECTION 4 - PREMIUMS. . . . . . . . . . . . . . . . . . . . . . . . . Page 7
4.1 Premium Payment; 4.2 Payment Frequency; 4.3 Unscheduled
Premiums; 4.4 Allocation of Premiums.

SECTION 5 - ANNUITY AND DEATH BENEFITS. . . . . . . . . . . . . . . . Page 8
5.1 Annuity Benefit; 5.2 Death Benefit; 5.3 Death of Owner;
5.4 Death Proceeds at Death of Annuity During Accumulation
Period.

SECTION 6 - VARIABLE ACCOUNT . . . . . . . . . . . . . . . . . . . . Page 9
6.1 Variable Account; 6.2 Subaccounts; 6.3 Fund Portfolios;
6.4 Transfers.

SECTION 7 - ACCUMULATED VALUE BENEFITS. . . . . . . . . . . . . . . . Page 10
7.1 Accumulated Value; 7.2 Net Accumulated Value; 7.3
Variable Accumulated Value; 7.4 Subaccount Units; 7.5 Unit
Value; 7.6 Declared Interest Option Accumulated Value;
7.7 Declared Interest Option Interest; 7.8 Surrender; 7.9
Surrender Charge; 7.10 Ten Percent Withdrawal Privilege;
7.11 Waiver of Surrender Charge; 7.12 Partial Withdrawal;
7.13 Delay of Payment; 7.14 Tax Charges; 7.15 Annual Report.

SECTION 8 - PAYMENT OF PROCEEDS . . . . . . . . . . . . . . . . . . . Page 14
8.1 Choice of Options; 8.2 Payment Options; 8.3 Interest
and Mortality; 8.4 Requirements; 8.5 Effective Date;
8.6 Death of Payee; 8.7 Withdrawal of Proceeds; 8.8 Claims
of Creditors.

PAYMENT OPTION TABLES . . . . . . . . . . . . . . . . . . . . . . . . Page 15

Any additional benefits and endorsements which apply to this policy are listed
on the policy data page and are described in the forms which follow page 15 of
this policy.

<PAGE>

POLICY DATA

Annuitant [JOHN DOE]

Age [35]

Sex [MALE]

Policy Number [12345]

Policy Date [03-01-1998]

Owner(s) [JOHN DOE]

Normal Retirement Date [11-01-2026]

On Declared Interest Option:
Guaranteed Interest Rate 3.00%
Current Interest Rate [5.50%]
Current Interest Rate guaranteed to: [03-01-1999]

*************************SCHEDULE OF FORMS AND PREMIUMS*************************

Form No. Description
- ------- -----------
434-062(06-98) NON-PARTICIPATING FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY

<PAGE>

SCHEDULE OF CHARGES

Annual Administrative Charge: [$45.00 per year]
Transfer Charge: [$25]
Mortality and Expense Risk Charge: [.0038091% of the variable
cash value per day (equivalent
to 1.40% per year).]

A surrender charge will apply during the first [9] policy years.
[The surrender charge will be as shown in the following table:

Surrender Charge
Policy Year (as a percent of Accumulated Value)
- ----------- -----------------------------------
1 8.5%
2 8.0%
3 7.5%
4 7.0%
5 6.5%
6 6.0%
7 5.0%
8 3.0%
9 1.0%
Thereafter 0%]

However, the total surrender charge assessed will never exceed 8.5% of the
premiums paid.

SCHEDULE OF INVESTMENT OPTIONS

General Account: The general assets of EquiTrust Life Insurance
Company.

Separate Account: EquiTrust Life Annuity Account

Subaccounts: Fund
[Subaccount A [Investment Option A
Subaccount B Investment Option B
Subaccount C Investment Option C
Subaccount D Investment Option D
Subaccount E Investment Option E
Subaccount F Investment Option F
Subaccount G Investment Option G
Subaccount H Investment Option H
Subaccount I Investment Option I
Subaccount J Investment Option J
Subaccount K Investment Option K
Subaccount L Investment Option L
Subaccount M Investment Option M
Subaccount N Investment Option N
Subaccount 0] Investment Option 0]

Form Number 434-062(06-98)
Policy Number 1234567

<PAGE>

- --------------------------------------------------------------------------------
SECTION 1 - DEFINITIONS
- --------------------------------------------------------------------------------

1.1 YOU OR YOUR
means the owner, or owners, of this policy.

1.2 ANNUAL ADMINISTRATIVE CHARGE
means a fee that is charged yearly. The annual administrative charge may go up
or down but is guaranteed not to exceed $45. The annual administrative charge as
of the policy date is shown on the policy data page.

1.3 ANNUITANT
The person (or persons) whose life (or lives) determine(s) the annuity and
death benefit. No more than two Annuitants may be named. Provisions referring to
the death of an Annuitant mean the last surviving Annuitant.

1.4 AGE
means age at the last birthday.

1.5 BENEFICIARY
The person (or persons) named by you to whom the proceeds payable on the
death of the Annuitant will be paid. Prior to the retirement date, if no
beneficiary survives the annuitant, you or your estate will be the
beneficiary.

1.6 BUSINESS DAY
means a day when the New York Stock Exchange is open for trading, except for the
day after Thanksgiving, any other designated Company holidays, and any day the
home office is closed because of a weather-related or comparable type of
emergency. Assets are valued at the close of the business day.

1.7 DECLARED INTEREST OPTION
means an option pursuant to which accumulated value accrues interest at a
guaranteed minimum rate. The declared interest option is supported by the
general account.

1.8 DUE PROOF OF DEATH
Proof of death satisfactory to us. Such proof may consist of a certified copy
of the death record, a certified copy of a court decree reciting a finding of
death, or any other proof satisfactory to us.

1.9 ELIGIBILITY FOR WAIVER OF SURRENDER CHARGE
means the annuitant:
a) is diagnosed by a Qualified Physician as having a terminal illness. A
terminal illness is any disease or medical condition which the
Qualified Physician expects will result in death within one year;
b) stays in a Qualified Nursing Care Center for 90 days; or
d) is required to satisfy the minimum distribution requirement of
Sec. 401(a) 9 of the Internal Revenue Code.

1.10 FUND
means the investment options shown on the policy data page. The corresponding
funds are registered with the SEC under the Investment Company Act of 1940 as
open-end diversified management investment companies or unit investment trusts.

1.11 GENERAL ACCOUNT
means all our assets other than those allocated to the variable account or any
other separate account. We have complete ownership and control of the assets of
the general account.

1.12 HOME OFFICE
means EquiTrust Life Insurance Company at its home office, 5400 University
Avenue, West Des Moines, Iowa, 50266-5997.

1.13 OWNER
The person (or persons) who own(s) the policy and who is entitled to exercise
all rights and privileges provided in the policy. The original owner(s) is shown
on the policy data page.

1.14 QUALIFIED PHYSICIAN
means a licensed, medical practitioner performing within the scope of his/her
license. Such person must be someone other than you, the annuitant, or a member
of the immediate family of either you or the annuitant.

1.15 POLICY ANNIVERSARY
means the same date in each year as the policy date.

1.16 POLICY DATE
means the policy date shown on the policy data page. This date is used to
determine policy years and anniversaries. The date of issue is equal to the
policy date.

1.17 POLICY YEAR
means the 12-month period that begins on the policy date or on a policy
anniversary.

1.18 RETIREMENT DATE
means the policy anniversary nearest the

<PAGE>

retirement age chosen in the application. If no age is chosen, age 70 will be
used. Subject to the payment option provisions, the owner may change the
retirement date at any time. However, the retirement date may not be changed
after payments begin.

1.19 SEC
means the Securities and Exchange Commission, a U.S. government agency.

1.20 SURRENDER CHARGE
means a fee that is applied at the time of any partial or full surrender. The
surrender charges are shown on the policy data page.

1.21 QUALIFIED NURSING CARE CENTER
means a long term care center that is licensed to operate according to the laws
of their location. The following are qualified nursing care centers:
a) Skilled Nursing Center - means a center:
i) That provides skilled nursing care supervised by a licensed
physician;
ii) That provides 24-hour nursing care by, or supervised, an R.N.;
and
iii) That keeps daily medical record of each patient.

b) Intermediate Care Center - means a center:

i) That provides 24-hour nursing care by, or supervised by an R.N.
or an L.P.N.; and
ii) That keeps a daily medical record of each patient.

c) Hospital - means a center:

i) That operates for the care and treatment of sick or injured
persons as inpatients;
ii) That provides 24-hour nursing care by, or supervised by, an R.N.;
iii) That is supervised by a staff of licensed physicians; and
iv) That has medical, diagnostic, and major surgery capabilities or
access to such capabilities.

Qualified Nursing Care Center does not include:
a) Drug or alcohol treatment centers;
b) Home for the aged or mentally ill, community living centers, or places
that primarily provide domiciliary, residency or retirement care;
c) Places owned or operated by a member of the annuitant's immediate
family.

1.22 VALUATION PERIOD
means the period between the close of business on a business day and the close
of business on the next business day.

1.23 VARIABLE ACCOUNT
means the Separate Account shown on the policy data page. It is a unit
investment trust registered with the SEC under the Investment Company Act of
1940.

1.24 OUR, US OR THE COMPANY
means the EquiTrust Life Insurance Company.

- --------------------------------------------------------------------------------
SECTION 2 - THE CONTRACT
- --------------------------------------------------------------------------------

2.1 RETIREMENT DATE
The owner may choose a retirement date on the application. However, such
retirement date may not be after the latest of the annuitant's 70th birthday or
the 10th policy anniversary. If no date is chosen on the application, age 70
will be used. The owner may change the retirement date at any time. However, the
retirement date may not be changed after payments begin. However, if the policy
is subject to Internal Revenue Service minimum distribution requirements, we
will begin distributions as required.

2.2 CONTRACT
This policy is a legal contract. We issue this policy in consideration of the
first premium and the statements in the application. The entire contract
consists of:
a) the basic policy;
b) any endorsements or additional benefit riders;
c) the attached copy of your application; and
d) any amendments, supplemental applications or other attached papers.

We rely on statements made in the application for the policy. These statements
in the absence of fraud are deemed representations and not warranties. No
statement will void this policy or be used in defense of a claim unless:
a) it is contained in the application; and
b) such application is attached to this policy.

2.3 MODIFICATION
No one can change any part of this policy except

6
<PAGE>

the owner and one of our officers. Both must agree to a change, and it must be
in writing. No agent may change this policy or waive any of its provisions.

2.4 INCONTESTABLE CLAUSE
We will not contest this policy from its policy date.

2.5 MISSTATEMENT OF AGE OR SEX
We have the right to correct benefits for misstated age or sex. In such an
event, benefits will be the amount the premium actually paid would have bought
at the correct age or sex.

2.6 RETURN OF POLICY AND POLICY SETTLEMENT
We reserve the right to have this policy sent to us for any:
a) modification; b) death settlement; c) surrender or partial surrender;
d) assignment; e) change of owner or beneficiary; f) election; or g) exercise
of any policy privilege.

We will send a payment contract to replace this policy if any payment option is
chosen. All sums to be paid by us under this policy are considered paid when
tendered by us at our home office.

2.7 TERMINATION
This policy ends when any one of the following events occurs:
a) the owner requests that the policy be canceled;
b) the annuitant dies; or
c) the policy is surrendered.

2.8 NON-PARTICIPATION
This policy does not share in the Company's surplus or profits.

- --------------------------------------------------------------------------------
SECTION 3 - OWNERSHIP AND BENEFICIARIES
- --------------------------------------------------------------------------------

3.1 OWNERSHIP
The owner has all rights, title and interest in the policy during the
accumulation period and while the annuitant is living. You may exercise all
rights and options stated in the policy, subject to the rights of any
irrevocable beneficiary.

3.2 BENEFICIARY
Beneficiaries are as named in the application, unless changed by the owner. The
interests of any beneficiary in a class who dies before the annuitant will pass
to any survivors of the class, unless the policy provides otherwise. Secondary
beneficiaries will have the right to receive the proceeds only if no primary
beneficiary survives. If no beneficiary survives the annuitant, we will pay the
proceeds to you or your estate.

In finding and identifying beneficiaries we may rely on sworn statements, other
facts, or evidence we deem satisfactory. Any benefits we pay based on such
information will be a valid discharge of our duty up to the amount paid.

3.3 CHANGE OF OWNER OR BENEFICIARY
While the annuitant lives, a change of owner or beneficiary can be made at any
time, subject to the following rules:
a) the change must be in writing on a form acceptable to us;
b) it must be signed by the owner;
c) if the owner is more than one person, the written notice for change must be
signed by all persons named as owner;
d) the form must be sent to and recorded by us;
e) a request for change of beneficiary must be signed by any irrevocable
beneficiary; and
f) the change will take effect on the date signed, but it will not apply to
any payment or action by us before we receive the form.

3.4 ASSIGNMENT
No assignment of this policy will bind us unless:
a) it is in writing on a form acceptable to us;
b) signed by the owner; and
c) received by us at our home office.

We will not be responsible for the validity of an assignment.

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SECTION 4 - PREMIUMS
- --------------------------------------------------------------------------------

4.1 PREMIUM PAYMENT
Premium payments may be made at any time. However, we reserve the right to limit
or restrict the amount of a premium payment as we deem appropriate. Premiums are
to be paid at our home office. The first premium must be equal to or greater
than $1,000. Thereafter, premium payments are flexible as to both timing and
amount. Each premium is to be paid at our home office. No payment may be less
than $50 without our consent.

4.2 PAYMENT FREQUENCY
The first premium is due on or prior to the policy

7
<PAGE>

date. We will send periodic reminder notices to the owner. The minimum amount
for which such notice will be sent will be $50. A reminder notice may be sent
for different periods, which may be 12, 6, or 3 months. The reminder notice
period may be changed upon request.

4.3 UNSCHEDULED PREMIUMS
Unscheduled premium payments of at least $50 may be made at any time prior to
the maturity date. The Company may, in its discretion, waive the $50 minimum
requirements. The Company reserves the right to limit the number and amount
of unscheduled premium payments.

4.4 ALLOCATION OF PREMIUM
The owner will determine the percentage of premium that will be allocated to
each subaccount of the variable account and to the declared interest option. The
owner may choose to allocate all the premium, a percentage or nothing to a
particular subaccount or to the declared interest option. Any allocation must be
for at least 10% of the premium. A fractional percent may not be chosen.

On the policy date, premiums will be initially allocated to the money market
subaccount. On the eleventh day following the policy date, we will transfer part
or all of the accumulated value in the money market subaccount to the
subaccounts or the declared interest option in accordance with the premium
allocation percentages shown in the application. For any premium received after
we receive the signed form, the premium will be allocated in accordance with the
premium allocation percentages shown in the application or the most recent
written instructions of the owner.

The owner may change the allocation for future premiums at any time, subject to
the following rules:
a) the policy must be in force;
b) there must be an accumulated value;
c) the change must be in writing on a form acceptable to us;
d) the form must be signed by the owner;
e) the change will take effect on the business day on or next following the
date we receive the signed form at our home office.

A change of allocation of future premiums does not affect current accumulated
values.

- --------------------------------------------------------------------------------
SECTION 5 - ANNUITY AND DEATH BENEFITS
- --------------------------------------------------------------------------------

5.1 ANNUITY BENEFIT
If the annuitant lives to the retirement date, we will pay the annuitant a
monthly income for the rest of the annuitant's life beginning on the retirement
date if:
a) this policy is in force on the retirement date;
b) the owner has not elected to have the accumulated value paid in a single
sum; and
c) the owner has not elected a payment option.

The amount of payments will be obtained by applying the accumulated value under
payment option 3. We will make at least 120 payments. After 120 payments the
annuitant must be living to receive further payments. If the annuitant dies
before 120 payments have been received, any remaining payments will be paid to
the beneficiary. If no beneficiary survives, we will pay the commuted value, as
determined by us, of any remaining payments to the estate of the last
beneficiary to die.

5.2 DEATH OF ANNUITANT DURING ACCUMULATION PERIOD
If the sole annuitant dies during the accumulation period and the annuitant is
not an owner, we will pay the death benefit to the beneficiary. The beneficiary
may elect to apply this sum under one of the annuity payment options as payee.
See Section 5.3 if you are the annuitant.

5.3 DEATH OF OWNER
If any owner dies prior to the retirement date and the deceased owner is the
sole annuitant, we will pay the death benefit to the beneficiary in one sum
within five (5) years of the deceased owner's death. The beneficiary may elect
(within 60 days of the date we receive due proof of death) to apply this sum
under one of the annuity payment options as payee, provided:

a) payments under the annuity payment option begin not later than one (1)
year after the owner's death; and
b) payments will be payable for the life of the beneficiary, or over a
period not greater than the beneficiary's life expectancy.

If any owner dies and the deceased owner is not the annuitant (or a co-annuitant
survives the

8
<PAGE>

deceased owner/annuitant), the new owner will be the surviving owner if any. The
new owner will be the annuitant (unless otherwise provided) if there are no
surviving owners. If the sole new owner is the deceased owner's spouse, the
contract may be continued. If the new owner is someone other than the deceased
owner's spouse, the surrender value of the policy must be distributed within
five (5) years of the deceased owner's death.

If any owner dies on or after the retirement date, but before all proceeds
payable under this contract have been distributed, we will continue payments to
the annuitant (or, if the deceased owner was the annuitant, to the beneficiary)
under the payment method in effect at the time of the deceased owner's death.

For purposes of this section, if any owner of this contract is not an
individual, the death or change of any annuitant shall be treated as the death
of an owner.

5.4 DEATH PROCEEDS AT DEATH OF ANNUITANT DURING ACCUMULATION PERIOD
The death proceeds will be determined based on the annuitant's age on the policy
date. If there is more than one annuitant, we will use the age of the last
surviving annuitant.

If the annuitant's age on the policy date is:
a) less than 76, the death proceeds will be equal to the greater of:
1) the sum of all premium payments less any partial withdrawals, as of
the date due proof of death is received;
2) the accumulated value as of the date due proof of death is received;
3) the death benefit anniversary amount as of the date of death plus any
premium payment made and less any partial withdrawals since the most
recent death benefit anniversary prior to death;

The death benefit anniversary amount is equal to the accumulated value
on the most recent policy anniversary. The death benefit anniversary
amount is determined on the first policy anniversary and on each
subsequent policy anniversary thereafter.

b) 76 or greater, the death benefit is equal to the greater of:
1) the sum of all premium payments less any partial withdrawals, as of
the date due proof of death is received; or
2) the accumulated value as of the date due proof of death is received.

- --------------------------------------------------------------------------------
SECTION 6 - VARIABLE ACCOUNT
- --------------------------------------------------------------------------------

6.1 VARIABLE ACCOUNT
We own the assets of the variable account. We will value the assets of the
variable account each business day. The assets of such account will be kept
separate from the assets of our general account and any other separate accounts.
Income, and realized and unrealized gains or losses from assets in the variable
account will be credited to or charged against such account without regard to
our other income, gains or losses.

That portion of the assets of the variable account which equals the reserves and
other policy liabilities of the policies which are supported by the variable
account will not be charged with liabilities arising from any other business we
conduct. We have the right to transfer to our general account any assets of the
variable account which are in excess of such reserves and other policy
liabilities.

While the variable account is registered with the SEC and thereby subject to SEC
rules and regulations, it is also subject to the laws of the State of Iowa which
regulate the operations of insurance companies incorporated in Iowa. The
investment policy of the variable account will not be changed without the
approval of the Insurance Commissioner of the State of Iowa. The approval
process is on file with the insurance commissioner of the state in which this
policy was delivered.

We also reserve the right to transfer assets of the variable account, which we
determine to be associated with the class of policies to which this policy
belongs, to another separate account. If this type of transfer is made, the term
"variable account," as used in this policy, shall then mean the variable account
to which the assets were transferred.

When permitted by law, we also reserve the right to:
a) deregister the variable account under the Investment Company Act of 1940;
b) manage the variable account under the direction

<PAGE>

of a committee;
c) restrict or eliminate any voting rights of owners, or other persons who
have voting rights as to the variable account; and
d) combine the variable account with other separate accounts.

6.2 SUBACCOUNTS
The variable account is divided into subaccounts. The subaccounts are listed on
page 4. Subject to obtaining any approvals or consents required by applicable
law, we reserve the right to eliminate or combine any subaccounts and the right
to transfer the assets of one or more subaccounts to any other subaccount. We
also reserve the right to add new subaccounts and make such subaccounts
available to any class or series of policies as we deem appropriate. Each new
subaccount would invest in a new investment option of the fund, or in shares of
another investment company. The owner will determine the percentage of premium
that will be allocated to each subaccount in accordance with the allocation of
premium provision.

6.3 FUND INVESTMENT OPTIONS
The fund has several investment options each of which corresponds to one of the
subaccounts of the variable account. The investment options are listed on the
policy data page. Premiums allocated to a subaccount will automatically be
invested in the fund investment option associated with that subaccount. The
owner will share only in the income, gains or losses of the investment option(s)
where shares are held.

We have the right, subject to compliance with any applicable laws, to make:
a) additions to;
b) deletions from; or
c) substitutions for;
the shares of a fund investment option that are held by the variable account or
that the account may purchase.

We also reserve the right to dispose of the shares of an investment option of
the fund listed on page 4 and to substitute shares of another investment option
of such fund or another mutual fund investment option, if:

a) the shares of the investment option are no longer available for investment;
or
b) if in our judgment further investment in the investment option should
become inappropriate in view of the purposes of the variable account.

In the event of any substitution or change, we may, by appropriate endorsement,
make such changes in this and other policies as may be necessary or appropriate
to reflect the substitution or change.

6.4 TRANSFERS
The owner may transfer all or part of the accumulated value among the
subaccounts of the variable account and between the subaccounts and
the declared interest option, subject to the following rules:
a) The transfer request must be in writing on a form acceptable to us.
b) The form must be signed by the owner.
c) The transfer will take effect as of the end of the valuation period during
which we receive the signed form at our home office.
d) The owner may transfer amounts among the subaccounts of the variable
account an unlimited number of times in a policy year.
e) The owner may transfer amounts from the declared interest option to the
variable account an unlimited number of times. Amounts transferred from the
declared interest option are considered transferred on a last-in-first-out
basis.
f) The first twelve transfers in each policy year will be made without a
transfer charge. Thereafter, each time amounts are transferred a transfer
charge may be imposed. This transfer charge is shown on the policy data
page.
g) The accumulated value on the date of the transfer will not be affected by
the transfer except to the extent of the transfer charge. Unless paid in
cash, the transfer charge will be deducted on a pro rata basis from the
declared interest option and/or the subaccounts to which the transfer is
made.
h) The owner must transfer at least:
(1) a total of $100; or
(2) the total accumulated value in the subaccount or the total
accumulated value in the declared interest option, if the total
amount transferred is less than $100.
i) No more than 25% of the accumulated value in the declared interest option
may be transferred unless the balance in the declared interest option after
the transfer would be less than $1,000. If the balance in the declared
interest option would fail below $1,000, the accumulated value in the
declared interest option may be transferred.

<PAGE>

- --------------------------------------------------------------------------------
SECTION 7 - ACCUMULATED VALUE BENEFITS
- --------------------------------------------------------------------------------

7.1 ACCUMULATED VALUE
The accumulated value of this policy will be the sum of:
a) the accumulated value in the subaccounts of the variable account; plus
b) the accumulated value in the declared interest option.

All of the values are the same or more than the minimums set by the laws of the
state where the policy is delivered.

7.2 NET ACCUMULATED VALUE
The net accumulated value of this policy will be the accumulated value less a
surrender charge. All of the values are the same or more than the minimums set
by the laws of the state where the policy is delivered.

7.3 VARIABLE ACCUMULATED VALUE
On the business day on or next following the day we receive a completed
application and the minimum initial premium, the variable accumulated value is
the total amount of premium, if any, allocated to the subaccounts of the
variable account. After such date, the policy's variable accumulated value is
equal to the sum of the policy's accumulated value in each subaccount. The value
in a subaccount is equal to a) multiplied by b) where:
a) is the current number of subaccount units; and
b) is the current unit value.

The variable accumulated value will vary from business day to business day
reflecting changes in a) and b) above.

7.4 SUBACCOUNT UNITS
When transactions are made which affect the variable accumulated value, dollar
amounts are converted to subaccount units. The number of subaccount units for a
transaction is determined by dividing the dollar amount of the transaction by
the current unit value.

The number of units for a subaccount attributable to a policy increases when:
a) premiums are allocated under the policy to that subaccount; or
b) transfers from the declared interest option or other subaccounts are
credited under the policy to that subaccount.

The number of units for a subaccount attributable to a policy decreases when:
a) the owner makes a surrender or partial withdrawal from that subaccount;
b) transfers are made from that subaccount to the declared interest option
or other subaccounts; or
c) the annual administrative charge shown on the policy data page is deducted
(the annual administrative charge will be prorated among the subaccounts
and the declared interest option).

7.5 UNIT VALUE
The unit value for a subaccount on any business day is determined by dividing
each subaccount's net asset value by the number of units outstanding
at the time of calculation. The unit value for each subaccount was set initially
at $10.00 when the subaccounts first purchased fund shares. The
unit value for each subsequent valuation period is calculated by dividing a) by
b), where:
a) is:
(1) the value of the net assets of the subaccount at the end of the
preceding valuation period; plus
(2) the investment income and capital gains, realized or unrealized,
credited to the net assets of that subaccount during the valuation
period for which the unit value is being determined; minus
(3) the capital losses, realized or unrealized, charged against those net
assets during the valuation period; minus
(4) any amount charged against the subaccount for taxes, or any amount set
aside during the valuation period by the Company as a provision for
taxes attributable to the operation or maintenance of that subaccount;
minus
(5) the mortality and expense risk shown on the policy data page. This
charge may go up or down but will never exceed 0.0038091% of the net
daily assets in that subaccount for each day in the valuation period.
The maximum charge corresponds to a charge of 1.40% per year of the
average daily net assets of the subaccount for mortality and expense
risks.

b) is the number of units outstanding at the end of the preceding valuation
period.

<PAGE>

The unit value for a valuation period applies for each day in the period. We
will value the net assets in each subaccount at their fair market value in
accordance with accepted accounting practices and applicable laws and
regulations.

7.6 DECLARED INTEREST OPTION ACCUMULATED VALUE
The declared interest option accumulated value as of the eleventh day following
the policy date is the premium allocated to the declared interest option as of
that date. Thereafter, the declared interest option accumulated value changes
every valuation period.

The declared interest option accumulated value increases when:
a) premiums are allocated to the declared interest option; or
b) transfers from the other subaccounts are credited to the declared interest
option; or
c) any interest is credited to the declared interest option.

The declared interest option accumulated value decreases when:
a) the owner makes a surrender or partial withdrawal from the declared
interest option; or
b) transfers are made from the declared interest option to other subaccounts;
or
c) the annual administrative charge shown on the policy data page is deducted
(the annual administrative charge will be prorated among the subaccounts
and the declared interest option).

For the purposes of the above calculation, interest does not accrue on amounts
deducted for policy charges, amounts transferred from or on amounts surrendered
or withdrawn from the declared interest option. Interest is accrued on the
accumulated value of the declared interest option on a daily basis and is
credited no less frequently than once a policy year.

7.7 DECLARED INTEREST OPTION INTEREST
The guaranteed minimum interest rate applied to the declared interest option
accumulated value is an effective rate of 3.0% per year. Interest in excess of
the minimum rate may be applied. The amount of the excess interest credited for
any policy year will be set by us at the start of that policy year and will be
guaranteed for such year.

7.8 SURRENDER
Before the retirement date, the owner may surrender the policy, subject to the
following rules:
a) The owner must send a written request to us along with such information or
evidence as may be required by law or as may be needed to process the
request.
b) The amount of any such surrender may be paid in cash or we will apply part
or all of it under a payment option.
c) We have the right to defer payment of a surrender from the declared
interest option for up to 6 months.
d) The amount of accumulated value surrendered will be subject to a surrender
charge.
e) Upon surrender, the policy will terminate.

7.9 SURRENDER CHARGE
The surrender charge is shown on the policy data page. The total surrender
charges assessed will never exceed 8.5% of premiums paid.

If all of the accumulated value is applied under payment option 2, 3, 4 or 5,
the surrender charge will be reduced as follows:
a) if option 3 or 5 is used, the surrender charge will be zero; or
b) if option 2 or 4 is used, the surrender charge will be applied, however,
the fixed number of years for which payment will be made is added to the
number of years the contract has been in force to determine what the charge
will be.

All of the values are the same or more than the minimums set by the laws of the
state where the policy is delivered.

7.10 TEN PERCENT WITHDRAWAL PRIVILEGE
After the first policy year, amounts up to the "withdrawal privilege amount" may
be withdrawn from the policy during each policy year without being subject to
the surrender charge. The withdrawal privilege amount will be equal to 10% of
the accumulated value on the most recent policy anniversary. If the policy is
subsequently surrendered during the policy year, the surrender charge will be
applied to any partial withdrawals taken during that policy year, as well as the
amount surrendered.

7.11 WAIVER OF SURRENDER CHARGE
The owner may make a surrender of this policy without incurring a surrender
charge if the annuitant becomes eligible for waiver of the surrender charge.

<PAGE>

The waiver of the surrender charge is subject to the following rules:
a) We must receive a written request on our form signed by the owner.
b) The policy must be in force or not providing benefits under any payment
option.
c) Proof must be provided that the conditions of eligibility requirements for
waiver of the surrender charge have been met, including an attending
physician's statement and any other proof we may require. We reserve the
right to seek a second medical opinion or have an examination performed at
our expense by a physician we choose.
d) If there are joint annuitants, you may exercise this waiver privilege once,
for either the first or second annuitant, but not both.
e) The annuitant must become eligible for waiver of surrender charge after the
first contract year ends.

7.12 PARTIAL WITHDRAWAL
Before the retirement date, the owner may obtain a partial withdrawal of the
accumulated value, subject to the following rules:
a) The amount of any partial withdrawal must be at least $500;
b) If the accumulated value after a partial withdrawal is less than $2,000, we
have the right to pay the remaining accumulated value to the owner as a
full surrender;
c) The accumulated value will be reduced by the amount of any partial
withdrawal and any surrender charge applying to such withdrawal. The owner
may tell us how to allocate a partial withdrawal among the subaccounts and
the declared interest option. If the owner does not so instruct, we will
prorate the partial withdrawal among the subaccounts and the declared
interest option. The allocation will be in the same proportion that the
accumulated value in each of the subaccounts and the accumulated value in
the declared interest option bears to the total accumulated value on the
date we receive the request;
d) Amounts withdrawn from the declared interest option are considered
withdrawn on the last-in-first-out basis.

7.13 DELAY OF PAYMENT
Proceeds from full surrenders and partial surrenders will usually be mailed to
the owner within seven days after the owner's signed request is received in our
home office. We will usually mail any death claim proceeds within seven days
after we receive due proof of death. We have the right to delay such payment
whenever:
a) the New York Stock Exchange is closed other than on customary weekend and
any holiday closing;
b) trading on the New York Stock Exchange is restricted as determined by the
SEC;
c) the SEC, by order, permits postponement for the protection of policyowners;
d) as a result of an emergency, as determined by the SEC, it is not reasonably
possible to dispose of securities or to determine the value of the net
assets of the variable account.

We have the right to defer payment which is derived from any amount paid to us
by check or draft until we are satisfied the check or draft has been paid by the
bank on which it is drawn.

We also have the right to delay making a full surrender or partial surrender,
from the declared interest option for up to six months from the date we receive
the owner's request.

7.14 TAX CHARGES
The Company may deduct state and local government premium tax from the
accumulated value, if such taxes are applicable in your state. The Company may
also make a charge against the accumulated value of this policy for any tax or
economic burden on the Company resulting from the application of federal, state
or local tax laws that the Company determines to be properly attributable to the
separate account or the policies. The charge will be applied by:
a) redeeming the number of subaccount units from the separate account equal to
the pro rata share of the charge applicable to the subaccounts; or
b) deducting from the declared interest option accumulated value the pro rata
portion of the charge applicable to the declared interest option.

7.15 ANNUAL REPORT
At least once each year we will send a report, without charge, to the owner
which shows:
a) all premiums paid and charges made since the last report;
b) the current accumulated value including the value in each subaccount and
the declared interest option; and
c) any partial surrenders since the last report.

<PAGE>

An illustrative report will be sent to the owner upon request. A fee may be
charged for this report.

- --------------------------------------------------------------------------------
SECTION 8 - PAYMENT OF PROCEEDS
- --------------------------------------------------------------------------------

8.1 CHOICE OF OPTIONS
The owner may choose to have the proceeds of this policy paid under a payment
option. After the annuitant's death, the beneficiary may choose an option if the
owner had not done so before the annuitant's death. If no payment option is
chosen, we will pay the proceeds of this policy in one sum. We may also fulfill
our obligation under this policy by paying the proceeds in one sum if:

a) the proceeds are less than $2,000;
b) periodic payments become less than $20; or
c) the payee is an assignee, estate, trustee, partnership, corporation, or
association.

8.2 PAYMENT OPTIONS
The choice of payment options are:
1) INTEREST INCOME -- The proceeds will be left with us to earn interest. The
interest will be paid every 1, 3, 6 or 12 months as the payee chooses. The
rate of interest will be determined by us. The payee may withdraw all or
part of the proceeds at any time.

2) INCOME FOR FIXED TERM -- The proceeds will be paid out in equal
installments for a fixed term of years.

3) LIFE INCOME WITH TERM CERTAIN -- The proceeds will be paid out in equal
installments for as long as the payee lives, but for not less than a term
certain. The owner or payee may choose one of the terms certain shown in
the payment option tables.

4) INCOME FOR FIXED AMOUNT -- The proceeds will be paid out in equal
installments of a specified amount. The payments will continue until all
proceeds plus interest have been paid out.

5) JOINT AND TWO-THIRDS TO SURVIVOR MONTHLY LIFE INCOME -- The proceeds will
be paid out in equal monthly installments for as long as two joint payees
live. When one payee dies, installments of two-thirds of the first
installment will be paid to the surviving payee. Payments will stop when
the surviving payee dies.

The proceeds may be paid in any other manner requested and agreed to by us, or
under any other payment options made available by the Company.

8.3 INTEREST AND MORTALITY
The minimum interest rate used in computing any payment option is 3% per year.
Higher interest rates may be used on the effective date of the payment contract.
We may at any time declare additional interest on these funds. The amount of
additional interest and how it is determined will be set by us.

The mortality table which is used for options 3) and 5) is the "1983 Table a"
individual annuity mortality table.

8.4 WITHDRAWAL OF PROCEEDS
The payee may not withdraw the funds under a payment option unless agreed to in
the payment contract. We have the right to defer a withdrawal for up to 6
months. We may also refuse to allow partial withdrawals of less than $250.

8.5 CLAIMS OF CREDITORS
Payments under any payment option will be exempt from the claims of creditors to
the maximum extent allowed by law.

<PAGE>

PAYMENT OPTION TABLES
(PER $1,000 OF PROCEEDS)

- --------------------------------------------------------------------------------
Option 2 - Income for Fixed Term
Installments per $1,000 of Proceeds
- --------------------------------------------------------------------------------
Number of
Years Annual Monthly
- --------------------------------------------------------------------------------
5 211.99 17.91
10 113.82 9.61
15 81.33 6.87
20 65.26 5.51
25 55.76 4.71
30 49.53 4.18
- --------------------------------------------------------------------------------

Guaranteed Settlement Option 5
Joint and Two-thirds to Survivor Monthly Life Income
Monthly Installments per $1,000 of Proceeds
- --------------------------------------------------------------------------------
Female Age
Male
Age 55 60 62 65 70
-----------------------------------------------------------------
60 4.44 4.71 4.82 5.01 5.34
62 4.53 4.81 4.93 5.13 5.50
65 4.65 4.97 5.11 5.33 5.75
70 4.88 5.24 5.41 5.68 6.20
75 5.11 5.52 5.71 6.04 6.68
- --------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------
GUARANTEED SETTLEMENT OPTION 3
LIFE INCOME WITH TERM CERTAIN
MONTLY INSTALLMENTS PER $1,000 PROCEEDS
- ---------------------------------------------------------------------------------------------------------
MALE FEMALE
- ---------------------------------------------------------------------------------------------------------
YEARS CERTAIN YEARS CERTAIN

Age 0 5 10 15 20 0 5 10 15 20
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $4.70 4.68 4.62 4.53 4.39 4.25 4.25 4.22 4.18 4.11
56 4.80 4.78 4.72 4.61 4.45 4.34 4.33 4.30 4.25 4.17
57 4.91 4.89 4.82 4.69 4.51 4.42 4.41 4.38 4.32 4.23
58 5.03 5.00 4.92 4.78 4.58 4.52 4.50 4.47 4.40 4.30
59 5.15 5.12 5.03 4.87 4.64 4.61 4.60 4.56 4.48 4.37
60 5.28 5.25 5.14 4.96 4.71 4.72 4.70 4.66 4.57 4.44

- ---------------------------------------------------------------------------------------------------------

61 5.42 5.39 5.26 5.06 4.78 4.83 4.81 4.76 4.66 4.51
62 5.57 5.53 5.39 5.16 4.84 4.95 4.93 4.86 4.75 4.58
63 5.74 5.69 5.52 5.26 4.90 5.07 5.05 4.98 4.85 4.65
64 5.91 5.85 5.66 5.36 4.96 5.21 5.18 5.10 4.95 4.72
65 6.10 6.03 5.81 5.46 5.02 5.35 5.32 5.22 5.05 4.79

- ---------------------------------------------------------------------------------------------------------

66 6.29 6.21 5.96 5.56 5.08 5.51 5.47 5.36 5.16 4.86
67 6.50 6.41 6.11 5.66 5.13 5.67 5.63 5.50 5.26 4.93
68 6.73 6.62 6.28 5.76 5.18 5.85 5.80 5.65 5.37 5.00
69 6.97 6.84 6.44 5.86 5.23 6.04 5.98 5.80 5.49 5.06
70 7.23 7.07 6.61 5.96 5.27 6.25 6.18 5.96 5.60 5.12

- ---------------------------------------------------------------------------------------------------------

71 7.51 7.32 6.78 6.05 5.31 6.47 6.39 6.14 5.71 5.18
72 7.80 7.58 6.96 6.14 5.34 6.71 6.62 6.31 5.83 5.23
73 8.12 7.85 7.14 6.23 5.37 6.97 6.86 6.50 5.94 5.28
74 8.45 8.14 7.32 6.31 5.40 7.26 7.12 6.69 6.04 5.32
75 8.82 8.44 7.49 6.38 5.42 7.56 7.39 6.89 6.14 5.35
- ---------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

NON-PARTICIPATING
FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY POLICY

If you have any questions concerning this policy or if anyone
suggests that you change or replace this policy, please contact
your EquiTrust Life agent or our home office. (515-225-5400)

EQUITRUST LIFE INSURANCE COMPANY
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266-5997

- --------------------------------------------------------------------------------

<PAGE>

CERTIFICATE OF APPROVAL
ATTORNEY GENERAL

Pursuant to provisions of the Iowa Code, the undersigned approves the
Articles of Amendment (adopted December 31, 1997) to the Articles of
Incorporation for Continental Western Life Insurance Company and finds them
in conformance with the laws of the United States and with the laws and
Constitution of the State of Iowa.

THOMAS J. MILLER
Attorney General of Iowa

12-31-97 /s/ Scott M. Galenbeck
- -------- -----------------------
Date By: SCOTT M. GALENBECK
Assistant Attorney General

CERTIFICATE OF APPROVAL
COMMISSIONER OF INSURANCE

THERESE M. VAUGHAN
Commissioner of Insurance

12-31-97 /s/ Robert L. Howe
- -------- -----------------------
Date By: ROBERT L. HOWE
Deputy Commissioner of Insurance

<PAGE>

ARTICLES OF AMENDMENT
0F
CONTINENTAL WESTERN LIFE INSURANCE COMPANY

TO THE SECRETARY OF STATE OF THE STATE OF IOWA:

Pursuant to Section 1006 of the Iowa Business Corporation Act, the
undersigned corporation adopts the following amendment to the corporation's
Articles of Incorporation.

1. The name of the corporation is Continental Western Life Insurance Company.

2. The text of the amendment to the Articles of Incorporation affected
hereby is as follows:

Article I of the Articles of Incorporation is hereby amended by deleting
it in its entirety and substituting the following in lieu thereof:

ARTICLE I

NAME AND ADDRESS OF COMPANY
---------------------------

The name of the Corporation is EquiTrust Life Insurance Company and
its principal place of business is 5400 University Avenue, West Des Moines,
Iowa 50266.

ARTICLE IX of the Articles of Incorporation is hereby amended by
deleting it in its entirety and substituting the following in lieu thereof:

ARTICLE IX

REGISTERED OFFICE AND REGISTERED AGENT
--------------------------------------

The address of the registered office of the Corporation is 5400
University Avenue, West Des Moines, Iowa 50266, and the name of its
registered agent at such address is Stephen M. Morain, General Counsel.

3. The date of adoption of this amendment was December 31, 1997.

4. The amendment was approved by the shareholders. The designation, number
of outstanding shares, number of votes entitled to be cast by each voting
group entitled

<PAGE>

to vote separately on the amendment, and the number of votes of each
voting group indisputably represented at the meeting is as follows:

VOTES VOTES
DESIGNATION SHARES ENTITLED REPRESENTED
OF GROUP OUTSTANDING TO BE CAST AT MEETING
------------ ------------ ----------- -----------
Common Stock 2,000 2,000 2,000

5. The total number of votes cast for and against the amendment was as follows:

VOTES VOTES
FOR AGAINST
----- -------
2,000 0

6. The number of votes cast for the amendment was sufficient for approval.

7. The effective date and time of this document is the 31st day of December,
1997 at 11:30 a.m.

CONTINENTAL WESTERN LIFE
INSURANCE COMPANY

Dated: December 31, 1997 By: /s/ Richard D. Harris
--------------------------------
Richard D. Harris, Senior Vice
President and Secretary-Treasurer

2
<PAGE>

- ------------------------------------------------------------------------------

STATE OF IOWA

INSURANCE DIVISION

CERTIFICATE OF SIMILARITY

I, THERESE M. VAUGHAN, COMMISSIONER OF INSURANCE DO HEREBY CERTIFY THAT
I AM THE OFFICIAL CHARGED WITH THE GENERAL CONTROL, SUPERVISION AND DIRECTION
OF ALL INSURANCE BUSINESS TRANSACTED IN THE STATE OF IOWA, AND CHARGED WITH
THE EXECUTION OF THE LAWS RELATING TO INSURANCE IN SAID JURISDICTION. AS SUCH
OFFICIAL, I AM CUSTODIAN OF THE RECORDS PERTAINING TO THE INSURANCE DIVISION
OF IOWA. I FURTHER CERTIFY THAT THE ATTACHED INSTRUMENT IS A TRUE AND CORRECT
COPY OF THE

AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
CONTINENTAL WESTERN LIFE INSURANCE COMPANY
FILED OCTOBER 3, 1994

AS THE SAME APPEARS OF RECORD IN THIS DIVISION.

IN WITNESS WHEREOF, I HAVE
HEREUNTO SET MY HAND AND CAUSED
MY OFFICIAL SEAL TO BE AFFIXED
AT THE CITY OF DES MOINES THIS
24TH DAY OF NOVEMBER, A.D. 1997.

/s/ THERESE M. VAUGHAN
--------------------------------
COMMISSIONER OF INSURANCE

- ------------------------------------------------------------------------------

<PAGE>

AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
CONTINENTAL WESTERN LIFE INSURANCE COMPANY

Article I

NAME AND ADDRESS OF COMPANY
----------------------------

The name of the Corporation is Continental Western Life Insurance Company and
its principal place of business is Continental Plaza, 1601 - 74th Street,
West Des Moines, Iowa 50265.

Article II

DURATION
--------

The period of its duration is perpetual.

Article III

PURPOSE
-------

The purpose for which this Corporation is organized is to engage in any
lawful activity within the purposes for which insurance corporations may be
organized under the provisions of Chapters 490 and 508 and any predecessor
statutes of the Iowa Code.

Article IV

CAPITALIZATION
--------------

The aggregate number of shares which the Corporation has authority to issue
is 2,500, par value $1,500 per share.

Article V

DIRECTORS
---------

The governing body of the Corporation is the Board of Directors, elected
annually by the shareholders. The number of Directors is required to be at
least five, the maximum to be fixed by the By-laws. The Directors need not
own shares of the Corporation. Their terms and the manner of their election
shall be as provided in the By-laws. The Board of Directors may make and
amend the By-laws of the Corporation.

Article VI

STOCK PLAN
----------

The Corporation shall operate on the Stock Plan.

<PAGE>

Article VII

INDEMNITY
---------

Any Director, Officer or Employee of the Corporation who is made a party to
any civil or criminal action by reason of his position with the Corporation
may be indemnified by the Corporation to the extent permitted by law.

Article VIII

FISCAL YEAR
-----------

The Corporation's fiscal year shall begin on January 1 of each year and end
on December 31 of each year.

Article IX

REGISTERED OFFICE AND REGISTERED AGENT
--------------------------------------

The address of the registered office of the Corporation is Continental Plaza,
1601 - 74th Street, West Des Moines, Iowa, 50265, and the name of its
registered agent at such address is Valerie Davenport.

Article X

AMENDMENT
---------

These Articles may be amended at any meeting of shareholders by the
affirmative note of a majority of the shareholders present, in person or by
proxy.

These restated Articles of Incorporation were approved to be effective August
21, 1994 by the shareholders of Continental Western Life Insurance Company on
August 21, 1994, and supersede the Corporation's Original Articles of
Incorporation and all amendments thereto.

IN WITNESS WHEREOF, these Amended and Restated Articles of Incorporation are
executed on behalf of Continental Western Life Insurance Company.

Dated this 21st day of August, 1994.

By: /s/ Ken L. Evason
--------------------------------
Ken L. Evason, President

By: /s/ Guy R. Montag
--------------------------------
Guy R. Montag, Secretary

<PAGE>

CERTIFICATE RELATING TO ATTACHED
BYLAWS OF
CONTINENTAL WESTERN LIFE INSURANCE COMPANY

I, Guy R. Montag, hereby certify that I am the Secretary of Continental
Western Life Insurance Company ("Continental Western Life"), an Iowa
corporation, and further confirm that the attached Bylaws of Continental Western
Life are complete and correct. I also affirm that the same have not been
modified, amended or rescinded, but remain in full force and effect on the date
hereof.

IN WITNESS WHEREOF, I have executed and delivered this Certificate this
30th day of December, 1997.

By: /s/ Guy R. Montag
-------------------------
Guy R. Montag
Secretary

(SEAL)

<PAGE>

BY-LAWS

CONTINENTAL WESTERN LIFE INSURANCE COMPANY
(an Iowa corporation)
Amended Through August 21, 1994

ARTICLE I. OFFICES

1.01. PRINCIPAL AND BUSINESS OFFICES. The corporation may have such
principal and other business offices, either within or without the State of
Iowa, as the Board of Directors may designate or as the business of the
corporation may require from time to time.

1.02. REGISTERED OFFICE. The registered office of the corporation
required by the Iowa Business Corporation Act to be maintained in the State of
Iowa may be, but need not be, identical with the principal office in the State
of Iowa, and the address of the registered office may be changed from time to
time by the Board of Directors. The business office of the registered agent of
the corporation shall be identical to such registered office.

ARTICLE II. SHAREHOLDERS

2.01. ANNUAL MEETING. The annual meeting of the shareholders shall be
held on such date as may be fixed by or under the authority of the Board of
Directors, for the purpose of electing directors and for the transaction of such
other business as may come before the meeting.

2.02. SPECIAL MEETING. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the Chairman, the President, or the Board of Directors or by the person
designated in the written request of the holders of not less than one-tenth of
all shares of the corporation entitled to vote at the meeting.

2.03. PLACE OF MEETING. The Board of Directors may designate any place,
either within or without the State of Iowa, as the place of meeting for any
annual meeting or for any special meeting. A waiver of notice signed by all
shareholders entitled to vote at a meeting may designate any place, either
within or without the State of Iowa, as the place for the holding of such
meeting. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business office of the
corporation in the State of Iowa or such other suitable place in the county of
such principal office as may be designated by the person calling such meeting,
but any meeting may be adjourned to reconvene at any place designated by vote of
a majority of the shares represented thereat.

2.04. NOTICE OF MEETING. Written notice stating the place, day and hour
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called shall be delivered not less than three (3) days
(unless a longer period is required by law) nor more than ten days before the
date of the meeting, either personally or by mail, by or at the

<PAGE>

direction of the Chairman, the President, or the Secretary, or other officer or
persons calling the meeting, to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at their
address as it appears on the stock record books of the corporation, with postage
thereon prepaid.

2.05. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, fifty days. If the stock transfer books shall be closed
for the purpose of determining shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than fifty days and, in the case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the close of business on the date on
which notice of the meeting is mailed or on the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall be applied
to any adjournment thereof except where the determination has been made through
the closing of the stock transfer books and the stated period of closing has
expired.

2.06. VOTING RECORDS. The officer or agent having charge of the stock
transfer books for shares of the corporation shall, before each meeting of
shareholders, make a complete record of the shareholders entitled to vote at
such meeting, or any adjournment thereof, with the address of and the number of
shares held by each. Such record shall be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes of the
meeting. The original stock transfer books shall be prima facie evidence as to
who are the shareholders entitled to examine such record or transfer books or to
vote at any meeting of shareholders. Failure to comply with the requirements of
this section shall not affect the validity of any action taken at such meeting.

2.07. QUORUM. Except as otherwise expressly required by law, a
majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders
unless the vote of a greater number is required by law. Though less than a
quorum of the outstanding shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.

<PAGE>

2.08. CONDUCT OF MEETINGS. The Chairman, and in his or her absence, the
President, or a Vice-President in the order provided under Section 4.07, and in
their absence, any person chosen by the shareholders present shall call the
meeting of the shareholders to order and shall act as chairman of the meeting,
and the Secretary of the corporation shall act as secretary of all meetings of
the shareholders, but, in the absence of the Secretary the presiding officer may
appoint any other person to act as secretary of the meeting.

2.09. PROXIES. At all meetings of shareholders, a shareholder entitled
to vote may vote in person or by proxy appointed in writing by the shareholder
or by his duly authorized attorney-in-fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any time before it is
voted, either by written notice filed with the Secretary or the acting Secretary
of the meeting or by oral notice given by the shareholder or the presiding
officer during the meeting. The presence of a shareholder who has filed his or
her proxy shall not of itself constitute a revocation. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy. The Board of Directors shall have the power and authority to make
rules establishing presumptions as to the validity and sufficiency of proxies.

2.10. VOTING OF SHARES. Each outstanding share shall be entitled to one
vote upon each matter submitted to a vote at a meeting of shareholders.

2.11 VOTING OF SHARES BY CERTAIN HOLDERS.

(a) OTHER CORPORATIONS. Shares standing in the name of another
corporation may be voted either in person or by proxy, by the President of
such corporation or any other officer appointed by such President. A proxy
executed by any principal officer of such other corporation or assistant
thereto shall be conclusive evidence of the signer's authority of this act,
in the absence of express notice to this corporation, given in writing to the
Secretary of this corporation, of the designation of some other person by the
Board of Directors or the by-laws of such other corporation.

(b) LEGAL REPRESENTATIVES AND FIDUCIARIES. Shares held by an
administrator, executor, guardian, conservator, trustee in bankruptcy, receiver,
or assignee for creditors may be voted by them, either in person or by proxy,
without a transfer of such shares into their name, provided that there is filed
with the Secretary before or at the time of meeting proper evidence of their
incumbency and the number of shares held. Shares standing in the name of a
fiduciary may be voted by them, either in person or by proxy. A proxy executed
by a fiduciary, shall be conclusive evidence of the signer's authority to act,
in the absence of express notice to this corporation, given in writing to the
Secretary of this corporation, that such manner of voting is expressly
prohibited or otherwise directed by the document creating the fiduciary
relationship.

(c) PLEDGES. A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.

(d) TREASURY STOCK AND SUBSIDIARIES. Neither treasury shares, nor shares
held by another corporation if a majority of the shares entitled to vote for the
election of directors of such

<PAGE>

other corporation is held by this corporation, shall be voted at any meeting or
counted in determining the total number of outstanding shares entitled to vote,
but shares of its own issue held by this corporation in a fiduciary capacity, or
held by such other corporation in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares entitled to vote.

2.12. WAIVER OF NOTICE BY SHAREHOLDERS. Whenever any notice whatever is
required to be given to any shareholder of the corporation under the articles of
incorporation or by-laws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of the meeting, by the
shareholder entitled to such notice, shall be deemed equivalent to the giving of
such notice; provided that such waiver in respect to any matter of which notice
is required under any provision of the Iowa Business Corporation Act shall
contain the same information as would have been required to be included in such
notice, except the time and place of meeting.

2.13. UNANIMOUS CONSENT WITHOUT MEETING. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law to
be taken at a meeting of the shareholders, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof.

ARTICLE III. BOARD OF DIRECTORS

3.01. GENERAL POWERS AND NUMBER. The business and affairs of the
corporation shall be managed by its Board of Directors. The number of directors
of the corporation shall be no less than five (5) and no more than sixteen (16).

3.02. TENURE AND QUALIFICATIONS. Each director shall hold office until
the next annual meeting of shareholders and until their successor shall have
been elected, or until their prior death, resignation or removal. A director
may be removed from office by affirmative vote for the election of such
director, taken at a meeting of shareholders called for that purpose. A
director may resign at any time by filing their written resignation with the
Secretary of the corporation. Except as may be otherwise required by applicable
law, directors need not be residents of the State of Iowa or shareholders of the
corporation.

3.03. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice that this by-law as soon as practical after
the annual meeting of shareholders, and each adjourned session thereof. The
Board of Directors may provide, by resolution, the time and place, either within
or without the State of Iowa, for the holding of regular meetings without other
notice than such resolution.

3.04. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the Chairman, President, or Secretary or any
two directors. The Chairman, President or Secretary calling any special meeting
of the Board of Directors may fix any place, either within or without the State
of Iowa, as the place for holding any special meeting of the Board of Directors
called by them, and if no other place is fixed, the place of the meeting shall
be the principal business office of the corporation in the State of Iowa.

4
<PAGE>

3.05. NOTICE; WAIVER. Notice of each meeting of the Board of Directors
(unless otherwise provided in or pursuant to Section 3.03) shall be given by
written notice delivered personally or mailed or given by telegram to each
director at their business address or at such other address as such director
shall have designated in writing filed with the Secretary. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is delivered to
the telegraph company. Whenever any notice whatever is required to be given to
any director of the corporation under the articles of incorporation or by-laws
or any provision of law, a waiver thereof in writing, signed at any time,
whether before or after the time of meeting, by the director entitled to such
notice, shall be deemed equivalent to the giving of such notice. The attendance
of a director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting and objects thereat to the transaction
of any business because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the Board of Directors need be specified in the notice or waiver of
notice of such meeting.

3.06. QUORUM. Except as otherwise provided by law or these by-laws, a
majority of the number of directors as provided in Section 3.01 shall constitute
a quorum for the transaction of business at any meeting of the Board of
Directors, but a majority of the directors present (though less than such
quorum) may adjourn the meeting from time to time without further notice.

3.07. MANNER OF ACTING. The act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors, unless the act of a greater number is required by law or these
by-laws.

3.08. CONDUCT OF MEETINGS. The Chairman, and in his or her absence, the
President, shall call meetings of the Board of Directors to order and shall act
as chairman of the meeting. The Secretary of the corporation shall act as
secretary of all meetings of the Board of Directors, but in the absence of the
Secretary, the presiding officer may appoint any Assistant Secretary or any
director or other person present to act as secretary of the meeting.

A board meeting may be conducted by:

a) A conference among directors using any means of communication through
which the directors may simultaneously hear each other during the conference
constitutes a board meeting, if the same notice is given of the conference as
would be required by the by-laws for a meeting, and if the number of directors
participating in the conference would be sufficient to constitute a quorum at a
meeting. Participation in a meeting by that means constitutes presence in
person at the meeting; or

b) Any means of communication through which the director, other directors
so participating, and all directors physically present at the meeting may
simultaneously hear such other during the meeting. Participation in a meeting
by that means constitutes presence in person at the meeting.

<PAGE>

3.09. VACANCIES. Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, may be
filled until the next succeeding annual election by the affirmative vote of a
majority of directors then in office, though less than a quorum of the Board of
Directors; provided, that in case of a vacancy created by the removal of a
director by vote of the shareholders, the shareholders shall have the right to
fill such vacancy at the same meeting or any adjournment thereof.

3.10. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors or a committee thereof of which
he or she is a member at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his or her dissent shall be
entered in the minutes of the meeting or unless he or she shall file his or her
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.

3.11. COMMITTEES. The Board of Directors by resolution adopted by the
affirmative vote of a majority of the number of directors as provided in Section
3.01 may designate one or more committees elected by the Board of Directors,
which to the extent provided in said resolution as initially adopted, and as
thereafter supplemented or amended by further resolution adopted by a like vote,
and subject to Section 490.825 of the Iowa Business Corporation Act, shall have
and may exercise, when the Board of Directors is not in session, the powers of
the Board of Directors in the management of the business and affairs of the
corporation, except action in respect to dividends to shareholders, election of
the principal officers or the filling of vacancies in the Board of Directors or
committees created pursuant to this section. The Board of Directors may elect
one or more of its members as alternate members of any such committee who may
take the place of any absent member or members at any meeting of such committee,
upon request by the Chairman or President or upon request by the chairman of
such meeting. Each such committee shall fix its own rules governing the conduct
of its activities and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.

3.12. UNANIMOUS CONSENT WITHOUT MEETING. Any action required or
permitted by the articles of incorporation or by-laws or any provision of law to
be taken by the Board of Directors at a meeting or by resolution may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors then in office.

ARTICLE IV. OFFICERS

4.01. NUMBER. The principal officers of the corporation shall be a
Chairman, a President, one or more Vice-Presidents, one or more of which may be
designated Executive or Senior Vice Presidents, a Secretary and a Treasurer,
each of whom shall be elected or appointed by the Board of Directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors. Any two or more offices may be held by
the same person, except the offices of President and Secretary and the offices
of President and Vice-President.

<PAGE>

4.02. ELECTION AND TERM OF OFFICE. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers is not held at such
meeting, such election shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his or her successor has been duly elected
or until his or her prior death, resignation or removal.

4.03. REMOVAL. Any officer or agent may be removed by the Board of
Directors whenever in its judgment the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment shall not of
itself create contract rights.

4.04. VACANCIES. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.

4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board shall, when
present, preside at all meetings of the shareholders and of the Board of
Directors. He or she shall have such power and duties as may be from time to
time prescribed by the by-laws or by resolution of the Board of Directors.

4.06. PRESIDENT. The President shall be the principal operating officer
of the corporation subject to the control of the Board of Directors, shall in
general supervise and control all of the business and affairs of the
corporation. He or she shall have authority subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and employees of
the corporation as he or she shall deem necessary, to prescribe their powers,
duties and compensation, and to delegate authority to them. Such agents and
employees shall hold office at the discretion of the President. He or she shall
have authority to sign, execute and acknowledge, on behalf of the corporation,
all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and
all other documents or instruments necessary or proper to be executed in the
course of the corporation's regular business, or which shall be authorized by
resolution of the Board of Directors; and, except as otherwise provided by law
or the Board of Directors, he or she may authorize any Vice-President or other
officer or agent of the corporation to sign, execute and acknowledge such
documents or instruments in his place and stead. In general he or she shall
perform all duties incident to the office of President and such other duties as
may be prescribed by the Board of Directors from time to time. The President
shall be a member of the Board of Directors.

4.07. THE VICE-PRESIDENTS. In the absence of the President or in the
event of his or her death, inability or refusal to act, or in the event for any
reason it shall be impractical for the President to act personally, the
Vice-President (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice-President
may sign, with the Secretary or Assistant Secretary, certificates for shares of
the corporation; and shall perform such other duties and have such authority as
from time to time may be delegated or assigned to them by the President or by
the Board of Directors.

<PAGE>

The execution of any instrument of the corporation by any Vice-President shall
be conclusive evidence, as to third parties, of their authority to act in stead
of the President.

4.08. THE SECRETARY. The Secretary shall: (a) keep the minutes of the
meetings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d)
keep or arrange for the keeping of a register of the post office address of
each shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President, or a Vice-President, certificates
for shares of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the corporation; and (g) in general perform
all duties incident to the office of Secretary and have such other duties and
exercise such authority as from time to time may be delegated or assigned
to him or her by the President or by the Board of Directors.

4.09. THE TREASURER. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the corporation; (b) receive
and give receipts for monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 5.04, and (c) in general perform all of the
duties incident to the office of Treasurer and have such other duties and
exercise such other authority as from time to time may be delegated or assigned
to him or her by the President or by the Board of Directors. If required by the
Board of Directors, the Treasurer shall give a bond for the faithful discharge
of his or her duties in such sum and with such surety or sureties as the Board
of Directors shall determine.

4.10. ADDITIONAL OFFICERS. The Board of Directors may appoint Assistant
Treasurers, Assistant Secretaries and such other officers and agents as it may
deem appropriate, and such other officers and agents shall hold their offices
for such terms and shall exercise such powers and perform such duties as may be
determined from time to time by the Board of Directors, the Chairman or the
President. The Board of Directors from time to time may delegate to any officer
or agent the power to appoint subordinate officers or agents and to prescribe
their respective rights, terms of office, authorities and duties.

4.11. SALARIES. The salaries of the principal officers shall be fixed
from time to time by the Board of Directors and no officer shall be prevented
from receiving such salary by reason of the fact that they are also a director
of the corporation.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS:
SPECIAL CORPORATE ACTS

5.01. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of or on behalf of the corporation, and such
authorization may be general or confined to specific instances. In

<PAGE>

the absence of other designation, all deeds, mortgages and instruments of
assignment or pledge made by the corporation shall be executed in the name of
the corporation by the Chairman, the President or one of the Vice-Presidents
and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer; the Secretary or an Assistant Secretary, when necessary or
required, shall affix the corporate seal thereto; and when so executed no
other party to such instrument or any third party shall be required to make
any inquiry into the authority of the signing officer or officers.

5.02. LOANS. No indebtedness for borrowed money shall be contracted on
behalf of the corporation and no evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a resolution of the
Board of Directors. Such authorization may be general or confined to specific
instances.

5.03. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
or under the authority of a resolution of the Board of Directors.

5.04. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as may be selected by or under the
authority of a resolution of the Board of Directors.

5.05. VOTING OF SECURITIES OWNED BY THIS CORPORATION. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders by the Chairman,
the President or any Vice-President of this corporation who may be present,
and (b) whenever, in the judgment of the Chairman or the President, or in the
absence of any Vice-President, it is desirable for this corporation to
execute a proxy or written consent in respect to any shares or other
securities issued by any other corporation and owned by this corporation, such
proxy or consent shall be executed in the name of this corporation by the
Chairman, President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Directors, affixation
of corporate seal, countersignature or attestation by another officer. Any
person or persons designated in the manner above stated as the proxy or
proxies of this corporation shall have full right, power and authority to
vote the shares or other securities issued by such other corporation and
owned by this corporation the same as such shares or other securities might
be voted by this corporation.

ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.01. CERTIFICATES OF SHARES. Certificates representing shares of the
corporation shall be in such form, consistent with Section 490.625 of the Iowa
Business Corporation Act, as shall be determined by the Board of Directors.
Such certificates shall be signed by the President or a Vice-President and by
the Secretary or an Assistant Secretary. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the

<PAGE>

corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except as provided in Section 6.06.

6.02. FACSIMILE SIGNATURES AND SEAL. The seal of the corporation on any
certificates for shares may be a facsimile. The signatures of the President or
Vice-President and the Secretary or Assistant Secretary upon a certificate may
be facsimiles if the certificate is manually signed on behalf of a transfer
agent, or a registrar, other than the corporation itself or an employee of the
corporation.

6.03. SIGNATURE BY FORMER OFFICERS. In case any officer who has signed or
whose facsimile signature has been placed upon any certificate for shares, shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he or she were such officer
at the date of its issue.

6.04. TRANSFER OF SHARES. Prior to due presentment of a certificate for
shares for registration of transfer the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notification and otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corporation with a
request to register for transfer, the corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into adverse claims
or has discharged any such duty. The corporation may require reasonable
assurance that said endorsements are genuine and effective and in compliance
with such other regulations as may be prescribed by or under the authority of
the Board of Directors.

6.05. RESTRICTIONS ON TRANSFER. The face or reverse side of each
certificate representing shares shall bear conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.

6.06. LOST, DESTROYED OR STOLEN CERTIFICATES. Where the owner claims
that his or her certificates for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the corporation has notice that such shares have been acquired
by a bona fide purchaser, and (b) files with the corporation a sufficient
indemnity bond, and (c) satisfies such other reasonable requirements as may be
prescribed by or under the authority of the Board of Directors.

6.07. CONSIDERATION FOR SHARES. The shares of the corporation may be
issued for such consideration as shall be fixed from time to time by the Board
of Directors, provided that any shares having a par value shall not be issued
for consideration less than the par value thereof. The consideration to be paid
for shares may be paid in whole or in part, in money, in other property,
tangible or intangible, or in labor or services actually performed for the
corporation. When payment of the consideration for which shares are to be
issued has been received by the corporation, such shares shall be deemed to be
fully paid and nonassessable by the corporation. No certificates shall be
issued for any share until such share is fully paid.

<PAGE>

6.08. STOCK REGULATIONS. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the statutes of the State of Iowa as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
corporation.

ARTICLE VII. SEAL

7.01. CORPORATE SEAL. The Board of Directors shall provide a corporate
seal which shall be circular in form and shall have inscribed thereon the name
of the corporation and the state of incorporation or "Corporate Seal."

ARTICLE VIII. AMENDMENTS

8.01. BY SHAREHOLDERS. These by-laws may be altered, amended or repealed
and new by-laws may be adopted by the shareholders by affirmative vote of not
less than a majority of the shares present or represented at any annual or
special meeting of the shareholders at which a quorum is in attendance.

8.02. BY DIRECTORS. These by-laws may also be altered, amended or
repealed and new by-laws may be adopted by the Board of Directors by affirmative
vote of a majority of the number of directors present at any meeting at which a
quorum is in attendance; but no by-law adopted by the shareholders shall be
amended or repealed by the Board of Directors if the by-law so adopted so
provides.

8.03. IMPLIED AMENDMENTS. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with the
by-laws then in effect but is taken or authorized by affirmative vote of not
less than the number of shares or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action, shall be given
the same effect as though the by-laws had been temporarily amended or suspended
so far, but only so far as is necessary to permit the specific action so taken
or authorized.

ARTICLE IX. INDEMNIFICATION

9.01. GENERAL INDEMNIFICATION. Each director, officer and employee,
and former director, officer and employee shall be indemnified to the extent
permitted by law against any and all personal liability for damages and
expenses reasonably incurred in connection with any action, suit, proceeding
or claim or liability, civil, criminal or administrative, to which such
person may be a party by reason of the lawful discharge of his or her past or
present duties on behalf of the Company, or any of the Company's Employee
Benefit plans. The Company shall defend each such person in all actions,
suits or proceedings which may arise. This right of indemnification shall
not be exclusive of any other rights to which the person may be entitled by
law or agreement, and shall be in addition to any liability coverage
purchased by the Company. It shall take effect after such coverage, if any,
is exhausted.

No such indemnification shall be made with respect to any matter as to
which the person shall have been finally adjudged to be liable for gross
negligence or misconduct in the performance of his or her duty to the Company.

<PAGE>

[LOGO]
[LETTERHEAD]

January 30, 1998

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Gentlemen,

With reference to the Registration Statement on Form N-4 filed by EquiTrust
Life Insurance Company ("Company") and its EquiTrust Life Annuity Account
with the Securities and Exchange Commission covering certain variable annuity
contracts, I have examined such documents and such law as I considered
necessary and appropriate, and on the basis of such examinations, it is my
opinion that:

(1) Company is duly organized and validly existing under the laws of the
State of Iowa.

(2) The variable annuity contracts, when issued as contemplated by
the said Form N-4 Registration Statement will constitute legal,
validly issued and binding obligations of EquiTrust Life Insurance
Company.

I hereby consent to the filing of this opinion as an exhibit to the said Form
N-4 Registration Statement and to the reference to my name under the caption
"Legal Matters" in the Prospectus contained in the said Registration
Statement. In giving this consent, I am not admitting that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933.

Very truly yours,

/s/ Stephen M. Morain

Stephen M. Morain
Senior Vice President
& General Counsel

<PAGE>

[LOGO]
[LETTERHEAD]

January 30, 1998

EquiTrust Life Insurance Company
5400 University Avenue
West Des Moines, Iowa 50266

Gentlemen:

This opinion is furnished in connection with the registration by EquiTrust
Life Insurance Company of a flexible premium deferred variable annuity
contract ("Contract") under the Securities Act of 1933, as amended. The
prospectus included in this Initial Filing to the Registration Statement on
Form N-4 describes the Contract. I have provided actuarial advice concerning
the preparation of the policy form described in the Registration Statement,
and I am familiar with the Registration Statement and exhibits thereto.

It is my professional opinion that:

(1) The fees and charges deducted under the Contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to
be incurred and the risks assumed by the insurance company.

I hereby consent to the use of this opinion as an exhibit to the Initial Filing
to the Registration Statement and to the reference to my name under the heading
"Experts" in the Prospectus.

Sincerely,

/s/ Christopher G. Daniels

Christopher G. Daniels, FSA, MAAA
Life Product Development and Pricing Vice
President
EquiTrust Life Insurance Company

<PAGE>

POWER OF ATTORNEY

The undersigned directors of EquiTrust Life Insurance Company, an Iowa
corporation (the "Company"), hereby constitute and appoint Edward M.
Wiederstein, and Stephen M. Morain, and each of them (with full power to each of
them to act alone), his true and lawful attorney-in-fact and agent, with full
power of substitution to each, for him and on his behalf and in his name, place
and stead, to execute and file any of the documents referred to below relating
to registrations under the Securities Act of 1933 and under the Investment
Company Act of 1940 with respect to any life insurance policies or annuity
contracts: registration statements on any form or forms under the Securities Act
of 1933 and under the Investment Company Act of 1940, and any and all amendments
and supplements thereto, with all exhibits and all instruments necessary or
appropriate in connection therewith, each of said attorneys-in-fact and agents
and him or their substitutes being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has hereto set his or her hand on the date
set forth below.

NAME DATE
- ---- ----

/s/ Thomas R. Gibson January 6, 1998
- ----------------------------------- ---------------
Thomas R. Gibson

/s/ Richard D. Harris January 6, 1998
- ----------------------------------- ---------------
Richard D. Harris

/s/ Timothy J. Hoffman January 6, 1998
- ----------------------------------- ---------------
Timothy J. Hoffman

/s/ Stephen M. Morain January 6, 1998
- ----------------------------------- ---------------
Stephen M. Morain

/s/ James W. Noyce January 6, 1998
- ----------------------------------- ---------------
James W. Noyce

/s/ William J. Oddy January 6, 1998
- ----------------------------------- ---------------
William J. Oddy

/s/ Edward M. Wiederstein January 6, 1998
- ----------------------------------- ---------------
Edward M. Wiederstein