LLAC VARIABLE ACCOUNT, S-6/A, 1999-08-27

LLAC VARIABLE ACCOUNT
S-6/A, 1999-08-27

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<PAGE>

Joan E. Boros (202) 965 8150

VIA EDGAR August 27, 1999
- ---------

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

RE: LLAC VARIABLE ACCOUNT ("REGISTRANT"); PRE-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT ON FORM S-6 (FILE NO. 333-76931)

Commissioners:

Attached for electronic filing is Pre-Effective Amendment No.1 to
Registrant's Registration Statement on Form S-6 under the Securities Act of
1933, as amended ("Pre-Effective Amendment No. 1"), with respect to the variable
portion of certain flexible premium variable life insurance contracts (the
"Contracts"). Registrant is a separate account of Liberty Life Assurance
Company of Boston. The Contracts are intended to provide life insurance
coverage. The Contracts may be marketed in part through banks. We do not
believe that this filing raises novel or complex issues of law or policy.

We are submitting Pre-Effective Amendment No. 1 to respond to the staff's
comments on Registrant's initial Form S-6 filing, as set forth in the staff's
letter of June 21, 1999 to me, and to make certain other changes. We have
adopted all of the staff's comments. For convenience of review, we have
repeated the staff's comments with our responses below. The page number
citations in our response are to the unmarked version of the prospectus that we
are delivering to the staff as a courtesy copy.

COMMENT 1. DEFINITIONS (PAGES 7-9)

VALUATION DAY. Clarify whether Liberty Life Assurance Company of Boston is
open every day that the New York Stock Exchange is open.

RESPONSE:

Done. In the absence of emergencies, Liberty Life expects to be open on
every day that the New York Stock Exchange is open. See page 2.

<PAGE>

Letter to Commission
August 27, 1999
Page 2

COMMENT 2. Q&A #12: WHAT ARE THE CHARGES DEDUCTED FROM PREMIUMS AND MY
ACCOUNT VALUE? (PAGES 14-15)

Information concerning fees, charges and expenses must be together toward
the beginning of the prospectus. Please relocate the Contract Charges and
Deductions table and the Portfolio Expense table.

RESPONSE:

Done. See pages 3-6.

COMMENT 3. Q&A #17: CAN I GET AN ILLUSTRATION TO HELP ME UNDERSTAND HOW
CONTRACT VALUES CHANGE WITH INVESTMENT EXPERIENCE? (PAGE 17)

Please disclose the meaning of the term "Agreements," as used in this
section.

RESPONSE:

Done. "Agreements" refers to riders providing additional benefits. See
page 16.

COMMENT 4. CONTRACT CHARGES AND DEDUCTIONS (PAGES 19-21)

In footnote 3 to the Contract Charges and Deductions table, provide a
cross-reference to where the term Medical Waiver of Withdrawal Charge is
explained.

RESPONSE:

Done. See page 4, footnote 4.

COMMENT 5. CONTRACT LOANS (PAGE 41)

Please clarify the potential for the policy to lapse if projected earnings
are not achieved and include a cross-reference to the section of the
prospectus that discusses the adverse tax consequences referred to in this
section. SEE November 12, 1993 Letter to Registrants at Item 6 (Loans from
Variable Life Insurance Policy Cash Values) from Clifford E. Kirsch.

RESPONSE:

Done. See page 35.

<PAGE>

Letter to Commission
August 27, 1999
Page 3

COMMENT 6. DEDUCTIONS AND CHARGES; PREMIUM EXPENSE CHARGE (PAGES 46-47)

Please disclose the range of premium taxes assessed by states, and clarify
that some states do not impose premium taxes as well as whether the
deduction for premium tax charges will be made in states that do not impose
premium taxes.

RESPONSE:

Done. See pages 39-40.

COMMENT 7. EXHIBIT 9 - ILLUSTRATIONS OF ACCOUNT VALUES, SURRENDER VALUES AND
DEATH BENEFITS

Disclose the expenses that would have been incurred absent the
reimbursement agreements, and the likelihood that the expense reimbursement
agreements will continue past the current year, as well as the effect of
discontinuing the agreements. SEE November 15, 1991 Letter to Registrant
at 27 (Variable Life Illustrations) from Robert L. Dorsey and Michael V.
Wible.

RESPONSE:

Done. See page 1 of Exhibit 9.

COMMENT 8. EXHIBITS AND OTHER INFORMATION

All exhibits, financial statements and certain other information not
included in this registration statement, must be filed by pre-effective
amendment.

RESPONSE:

Done.

* * *

In addition to the foregoing, we note that Liberty has added a Minimum
Guaranteed Coverage to the Contract. Under this provision, if sufficient
premium is paid the Contract will remain in force for the first three Contract
Years, regardless of changes in the Account Value. This provision in most
respects functions like the other two Coverage Guarantees. The prospectus in
Pre-Effective Amendment No. 1 also contains other minor changes in the
disclosure.

Attached for electronic filing is a request for acceleration signed by
Registrant and the Distributor of the Contracts requesting acceleration by
September 8, 1999, or as soon as possible

<PAGE>

Letter to Commission
August 27, 1999
Page 3

thereafter. Registrant request acceleration so that it will be able to commence
selling the Contracts in accordance with its business plans.

We are separately delivering two paper copies and a black-lined version of
this filing to the SEC staff, as a courtesy to assist them in their review.

Please address any question or comment to the undersigned or to Christopher
Petito at (202) 965-8152.

Very truly yours,

/s/ Joan E. Boros

Joan E. Boros

cc: Kevin M. Kirchoff, Branch Chief
William J. O'Connell, Esq.
<PAGE>

August 26, 1999

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

RE: LLAC VARIABLE ACCOUNT OF LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
("REGISTRANT") PRE-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION
STATEMENT ON FORM S-6 (THE "PRE-EFFECTIVE AMENDMENT") (FILE NO.
333-76931)

Commissioners:

Registrant and the principal underwriter hereby request, pursuant to Rule
461 under the Securities Act of 1933, that the Commission declare the enclosed
Pre-Effective Amendment to the Registration Statement effective on
September 13, 1999, or as soon prior to or thereafter as practicable.

To our knowledge, no distribution of copies of the Pre-Effective Amendment
or the prospectus has been made to prospective investors. Distributions thereof
have been made only for purposes of internal use by Registrant and for
regulatory filings.

Registrant and the principal underwriter represent that their request is
consistent with the public interest and the protection of investors.

Very truly yours,

LLAC Variable Account Liberty Life Distributors, LLC

By: Liberty Life Assurance
Company of Boston

By: /s/ William J. O'Connell By: /s/ John T. Treece

cc: Christopher S. Petito, Esq.

<PAGE>

As filed with the Securities and Exchange Commission on August 27, 1999.
Registration No. 333-76931
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

-----------

FORM S-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO. 1

-----------

LLAC VARIABLE ACCOUNT
(Exact Name of Trust)

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
(Name of Depositor)
175 Berkeley Street
Boston, Massachusetts 02117
(Complete Address of Depositor's Principal Executive Offices)
Morton E. Spitzer
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
175 Berkeley Street
Boston, Massachusetts 02117

(Name and Complete Address of Agent for Service)

Copies to:
Joan E. Boros, Esq. William J. O'Connell, Esq.
Jorden Burt Boros Cicchetti Vice President and Assistant General Counsel
Berenson & Johnson Liberty Life Assurance Company of Boston
1025 Thomas Jefferson Street, N.W. 175 Berkeley Street
Washington, D.C. 20007-5201 Boston, Massachusetts 02117

Securities being offered -- variable portion of flexible premium variable life
insurance contracts.

-----------

Approximate date of proposed public offering: as soon as practicable
after the effective date of this registration statement.

The registrant is registering an indefinite amount of securities, by reason of
Section 24(f) of the Investment Company Act of 1940.

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

<PAGE>

CROSS REFERENCE SHEET TO PROSPECTUS

Cross reference sheet pursuant to Rule 404(c) showing location in Prospectus of
information required by Items of Form N-8B-2.

<TABLE>
<CAPTION>
Item Number in Form N-8B-2 Caption in Prospectus
- -------------------------- ---------------------

ORGANIZATION AND GENERAL INFORMATION
------------------------------------
<S> <C>
1. (a) Name of trust..................................................... Cover, Definitions

(b) Title of each class of securities issued.......................... Cover, Purchase of Contract and
Allocation of Premiums

2. Name & address of each depositor........................................ Cover, Liberty Life Assurance
Company of Boston

3. Name & address of custodian............................................. Variable Account

4. Name & address of principal underwriter................................. Distribution of Contracts

5. State in which organized................................................ Variable Account

6. Date of organization.................................................... Variable Account

9. Material litigation..................................................... Legal Proceedings

<CAPTION>
GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST

General Information Concerning Securities and Rights of Holders
- ---------------------------------------------------------------
<S> <C>
10. (a), (b)Type of Securities.............................................. Cover, Purchase of Contract and
Allocation of Premiums

(c) Rights of security holders........................................ Cover, Amount Payable on
re: withdrawal or redemption Surrender of the Contract,
Contract Loans, Cancellation

(d) Rights of security holders........................................ Cover, Cancellation, Amount
re: conversion, transfer or partial withdrawal Payable on Surrender of the
Contract, Partial Withdrawals,
Allocation of Premiums,
Transfer of Account Value

(e) Rights of security holders........................................ Termination and Grace Period,
re: lapses, default, & reinstatement Reinstatement

(f) Provisions re: voting rights...................................... Voting Rights

(g) Notice to security holders........................................ Statements to Contract Owners

(h) Consent of security holders....................................... Additions, Deletions, and
Substitutions of Securities,
Allocation of Premiums

(i) Other principal features.......................................... Deductions and Charges,
Contract Benefits and
Rights, Account Value
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Information Concerning Securities Underlying Trust's Securities
- ---------------------------------------------------------------
<S> <C>
11. Unit of specified securities in which security holders have an interest Cover, Portfolios

12. (a)-(d) Name of company, name & address of its custodian................ Cover, Portfolios

<CAPTION>
Information Concerning Loads, Fees, Charges & Expenses
- ------------------------------------------------------
<S> <C>
13. (a) With respect to each load, fee, charge & expense.................. Deductions and Charges

(b) Deductions for sales charges...................................... Withdrawal Charge

(d)-(g) Other loads, fees & expenses.................................... Deductions and Charges

<CAPTION>
Information Concerning Operation of Trust
- -----------------------------------------
<S> <C>
14. Procedure for applications for & issuance of trust's securities......... Application for a Contract,
Allocation of Premiums,
Distribution of Contracts

15. Procedure for receipt of payments from purchases of trust's securities.. Application for a Contract,
Allocation of Premiums,
Premiums, Transfer of Account
Value

16. Acquisition and disposition of underlying securities.................... Cover, Portfolios

17. (a) Procedure for withdrawal.......................................... Cover, Amount Payable on
Surrender of the Contract,
Partial Withdrawals,
Cancellation

(b) Redemption or repurchase.......................................... Cover, Amount Payable on
Surrender of the Contract,
Partial Withdrawals,
Cancellation

18. (a) Income of the Trust............................................... Portfolios, Allocation of
Premiums

19. Procedure for keeping records & furnishing information to Portfolios, Statements to
security holders........................................................ Contract Owners

21. (a) & (b) Loans to security holders..................................... Contract Loans

23. Bonding arrangements for depositor...................................... Safekeeping of the Variable
Account's Assets

24. Other material provisions............................................... General Contract Provisions
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
ORGANIZATION, PERSONNEL & AFFILIATED PERSONS OF DEPOSITOR
---------------------------------------------------------

Organization & Operations of Depositor
- --------------------------------------
<S> <C>
25. Form, state & date of organization of depositor......................... Liberty Life Assurance Company
of Boston

27. General character of business of depositor.............................. Liberty Life Assurance Company
of Boston

28. (a) Officials and affiliates of the depositor......................... Liberty Life Assurance Company
of Boston, Officers and
Directors of Liberty Life

(b) Business experience of officers and directors of the depositor.... Officers and Directors of
Liberty Life

<CAPTION>
Companies Owning Securities of Depositor
- ----------------------------------------
<S> <C>
29. Each company owning 5% of voting securities of depositor................ Liberty Life Assurance Company
of Boston

<CAPTION>
Controlling Persons
- -------------------
<S> <C>
30. Control of depositor.................................................... Liberty Life Assurance Company
of Boston

<CAPTION>
DISTRIBUTION & REDEMPTIONS OF SECURITIES
----------------------------------------

Distribution of Securities
- --------------------------
<S> <C>
35. Distribution............................................................ Liberty Life Assurance Company
of Boston, Distribution of
Contracts

38. (a) General description of method of distribution of securities....... Distribution of Contracts

(b) Selling agreement between trust or depositor & underwriter........ Distribution of Contracts

<CAPTION>
Principal Underwriter
- ---------------------
<S> <C>
39. (a) & (b) Principal Underwriter......................................... Distribution of Contracts

41. Character of Underwriter's business..................................... Distribution of Contracts

<CAPTION>
Offering Price or Acquisition Value of Securities of Trust
- ----------------------------------------------------------
<S> <C>
44. Information concerning offering price or acquisition valuation of Portfolios, Account Value
securities of trust. (All underlying securities are shares in registered
investment companies.)..................................................

<CAPTION>
Redemption Valuation of Securities of Trust
- -------------------------------------------
<S> <C>
46. Information concerning redemption valuation of securities of trust. (All Portfolios, Account Value
underlying securities are shares in a registered
investment company.)....................................................

<CAPTION>
Purchase & Sale of Interests in Underlying Securities
- -----------------------------------------------------
<S> <C>
47. Maintenance of Position................................................. Cover, Variable Account,
Portfolios, Allocation of
Premiums
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
INFORMATION CONCERNING TRUSTEE OR CUSTODIAN
-------------------------------------------
<S> <C>
48. Custodian of trust...................................................... Variable Account

50. Lien on trust assets.................................................... Variable Account

<CAPTION>
INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
---------------------------------------------------------
<S> <C>
51. (a) Name & address of insurer......................................... Cover, Liberty Life Assurance
Company of Boston

(b) Types of Contracts................................................ Cover, Purchase of Contract and
Allocation of Premiums, Federal
Tax Considerations

(c) Risks insured & excluded.......................................... Death Benefit, Optional
Insurance Benefits,
Misstatement as to Age and Sex,
Suicide

(d) Coverage.......................................................... Cover, Purchase of Contract and
Allocation of Premiums

(e) Beneficiaries..................................................... Death Benefit, Beneficiary

(f) Terms of cancellations & reinstatement............................ Termination

(g) Method of determining amount of premium paid by holder............ Purchase of Contract and
Allocation of Premiums

<CAPTION>
POLICY OF REGISTRANT
--------------------
<S> <C>
52. (a) & (c) Selection of Portfolio securities............................. Additions, Deletions, and
Substitutions of Securities

<CAPTION>
Regulated Investment Company
- ----------------------------
<S> <C>
53. (a) Taxable status of trust........................................... Taxation of Liberty Life and
the Variable Account

<CAPTION>
FINANCIAL AND STATISTICAL INFORMATION
-------------------------------------
<S> <C>
59. Financial Statements.................................................... Financial Statements
</TABLE>

*Items not listed are not applicable to this Registration Statement.

<PAGE>

PROSPECTUS

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT
ISSUED BY
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
IN CONNECTION WITH ITS
LLAC VARIABLE ACCOUNT
175 BERKELEY STREET, P.O. BOX 140
BOSTON, MASSACHUSETTS 02117-0140

SERVICE CENTER
100 LIBERTY WAY
DOVER, NEW HAMPSHIRE 03820
[1-800-XXX-XXXX]

This prospectus describes Flexible Premium Variable Life Insurance Contracts
(the "Contracts") offered by Liberty Life Assurance Company of Boston ("we" or
"Liberty Life") for prospective insured persons ages 0-80. Subject to certain
restrictions, you may vary the frequency and amount of premium payments and
increase or decrease the level of life insurance benefits under the Contract.

The Contracts currently offer eighteen investment options, each of which is
a Sub-Account of LLAC Variable Account of Liberty Life (the "Variable Account").
Each Sub-Account invests exclusively in shares of one of the following
Portfolios:

AIM VARIABLE INSURANCE FUNDS, INC.: AIM V.I. Capital Appreciation Fund; AIM
V.I. Government Securities Fund; and AIM V.I. International Equity Fund.

DREYFUS: Dreyfus Stock Index Fund; Dreyfus Variable Investment Fund, Capital
Appreciation Portfolio; and Dreyfus Socially Responsible Growth Fund, Inc.

LIBERTY VARIABLE INVESTMENT TRUST: Colonial Small Cap Value Fund, Variable
Series; Colonial High Yield Securities Fund, Variable Series; Colonial
Strategic Income Fund, Variable Series; Colonial Growth & Income Fund,
Variable Series; and Liberty All-Star Equity Fund, Variable Series.

MFS VARIABLE INSURANCE TRUST: MFS Emerging Growth Series; MFS Research
Series; MFS Utilities Series; and MFS Growth with Income Series.

STEIN ROE VARIABLE INVESTMENT TRUST: Stein Roe Balanced Fund, Variable
Series; Stein Roe Growth Stock Fund, Variable Series; and Stein Roe Money
Market Fund, Variable Series.

Not all of the Sub-Accounts may be available under your Contract. You should
contact your representative for further information as to the availability of
the Sub-Accounts. We may make other investment options available in the future.
You also may allocate all or part of your Net Premiums to our Fixed Account.

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

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Date of this Prospectus is September [ ], 1999.

<PAGE>
The Contract does not have a guaranteed minimum Account Value. Your
Contract's Account Value will rise and fall, depending on the investment
performance of the Portfolios underlying the Sub-Accounts to which you allocate
your Net Premiums. You bear the entire investment risk on amounts allocated to
the Sub-Accounts. The investment policies and risks of each Portfolio are
described in the accompanying prospectuses for the Portfolios. The Account Value
will also reflect Net Premiums, amounts withdrawn, and cost of insurance and any
other charges.

When the Insured dies, we will pay a Death Benefit to a Beneficiary
specified by you. We will reduce the amount of the Death Benefit by any unpaid
Indebtedness and any unpaid Contract charge. You may choose between one of two
Death Benefit options: (1) a level amount, which generally equals the Face
Amount of the Contract; or (2) a variable amount, which generally equals the
Face Amount plus the Account Value. In certain circumstances, the Death Benefit
may increase or decrease based on the investment experience of the Portfolios
underlying the Sub-Accounts to which you have allocated your Net Premiums. As
long as the Contract remains in force and you make no withdrawals, the Death
Benefit will never be less than the Face Amount. The minimum Face Amount under
the Contract is $50,000.

The Contract will remain in force as long as (a) the Surrender Value is
sufficient to pay the monthly charges or (b) one of the three Coverage
Guarantees is in effect, regardless of changes in the Account Value. The
Coverage Guarantees are described on pages 18-19. You generally may cancel the
Contract by returning it to us within ten days after you receive it. In some
states, however, this right to return period may be longer, as provided by state
law. We will refund your Premium or Account Value, as provided by state law.

In certain states the Contracts may be offered as group contracts with
individual ownership represented by Certificates. The discussion of Contracts in
this Prospectus applies equally to Certificates under group contracts, unless
the context specifies otherwise.

It may not be advantageous for you to purchase variable life insurance to
replace your existing insurance coverage or if you already own a variable life
insurance contract.

THE CONTRACTS AND THE INVESTMENTS IN THE PORTFOLIOS ARE NOT DEPOSITS, OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK. THE CONTRACTS ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED. THE CONTRACTS ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.

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

This Prospectus is valid only if accompanied by the current Prospectuses for
the Portfolios listed above. If any of those Prospectuses are missing or
outdated, please contact us and we will send you the Prospectus you need.

PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR YOUR FUTURE
REFERENCE.

The Contract may not be available in all states.

ii
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---
<S> <C>
DEFINITIONS......................................................................... 1
FEES AND EXPENSES................................................................... 3
QUESTIONS AND ANSWERS ABOUT YOUR CONTRACT........................................... 8
PURCHASE OF CONTRACT AND ALLOCATION OF NET PREMIUMS................................. 16
Application for a Contract........................................................ 16
Premiums.......................................................................... 17
Modified Endowment Contract....................................................... 18
Guaranteed Coverage Monthly Premium............................................... 18
Allocation of Net Premiums........................................................ 19
Account Value..................................................................... 20
Accumulation Unit Value........................................................... 21
Transfer of Account Value......................................................... 21
Transfers Authorized by Telephone................................................. 22
Dollar Cost Averaging............................................................. 22
Asset Rebalancing................................................................. 23
Asset Allocation Models........................................................... 23
THE INVESTMENT AND FIXED ACCOUNT OPTIONS............................................ 24
Variable Account Investments...................................................... 24
Portfolios...................................................................... 24
Voting Rights................................................................... 28
Additions, Deletions, and Substitutions of Securities........................... 28
The Fixed Account................................................................. 29
CONTRACT BENEFITS AND RIGHTS........................................................ 30
Death Benefit..................................................................... 30
Change in the Face Amount......................................................... 32
Optional Insurance Benefits....................................................... 32
Contract Loans.................................................................... 34
Amount Payable on Surrender of the Contract....................................... 35
Partial Withdrawals............................................................... 36
Proceeds Options.................................................................. 37
Termination and Grace Period...................................................... 38
Reinstatement..................................................................... 38
Cancellation...................................................................... 39
Postponement of Payments.......................................................... 39
DEDUCTIONS AND CHARGES.............................................................. 39
Premium Expense Charge............................................................ 39
Separate Account Expense Charge................................................... 40
Monthly Deduction................................................................. 40
Cost of Insurance Charge.......................................................... 40
Contract Fee...................................................................... 41
Portfolio Expenses................................................................ 41
Withdrawal Charge................................................................. 41
Withdrawal Fee.................................................................... 43
</TABLE>

iii
<PAGE>

<TABLE>
<S> <C>
Transfer Fee...................................................................... 44
Special Provisions for Group or Sponsored Arrangements............................ 44
GENERAL CONTRACT PROVISIONS......................................................... 44
Statements to Contract Owners..................................................... 44
Limit on Right to Contest......................................................... 45
Suicide........................................................................... 45
Misstatement as to Age and Sex.................................................... 45
Beneficiary....................................................................... 45
Assignment........................................................................ 46
Creditors' Claims................................................................. 46
Dividends......................................................................... 46
Notice and Elections.............................................................. 46
Modification...................................................................... 46
FEDERAL TAX CONSIDERATIONS.......................................................... 46
Taxation of Liberty Life and the Variable Account................................. 46
Tax Status of the Contract........................................................ 47
Diversification Requirements...................................................... 47
Owner Control..................................................................... 48
Tax Treatment of Life Insurance Death Benefit Proceeds............................ 49
Accelerated Death Benefit......................................................... 49
Tax Deferral During Accumulation Period........................................... 49
Contracts Which Are MECs.......................................................... 49
Characterization of a Contract as a MEC......................................... 49
Tax Treatment of Withdrawals, Loans, Assignments and Pledges
under MECs................................................................... 50
Penalty Tax..................................................................... 50
Aggregation of Contracts........................................................ 50
Contracts Which Are Not MECs...................................................... 50
Tax Treatment of Withdrawals Generally.......................................... 50
Certain Distributions Required by the Tax Laws in the First 15
Contract Years............................................................... 50
Tax Treatment of Loans.......................................................... 50
Actions to Ensure Compliance with the Tax Law................................... 51
Federal Income Tax Withholding.................................................. 51
Tax Advice...................................................................... 51
DESCRIPTION OF LIBERTY LIFE AND THE VARIABLE ACCOUNT................................ 51
Liberty Life Assurance Company of Boston.......................................... 51
Officers and Directors of Liberty Life............................................ 52
Financial Information Concerning Liberty Life..................................... 54
Variable Account.................................................................. 54
Safekeeping of the Variable Account's Assets...................................... 54
State Regulation of Liberty Life.................................................. 54
YEAR 2000 MATTERS................................................................... 55
DISTRIBUTION OF CONTRACTS........................................................... 55
LEGAL PROCEEDINGS................................................................... 56
</TABLE>

<PAGE>

<TABLE>
<S> <C>
LEGAL MATTERS....................................................................... 56
REGISTRATION STATEMENT.............................................................. 57
EXPERTS............................................................................. 57
FINANCIAL STATEMENTS................................................................ 57
</TABLE>

This Prospectus Does Not Constitute an Offering in any Jurisdiction in which
Such Offering May Not Be Lawfully Made. Liberty Life Does Not Authorize any
Information or Representations Regarding the Offering Described in this
Prospectus other than as Based in this Prospectus.

v
<PAGE>
DEFINITIONS

Please refer to this list for the meaning of the following terms:

ACCOUNT VALUE--The sum of the values of your interests in the Sub-Accounts, the
Fixed Account and the Loan Account.

ACCUMULATION UNIT--An accounting unit of measurement which we use to calculate
the value of a Sub-Account.

AGE--An Insured's age at his or her last birthday.

ASSET ALLOCATION MODELS--Models developed by Standard & Poor's Inc. to provide
generalized guidance on how to allocate Account Value among the Sub-Accounts
under the Contract.

ASSET REBALANCING--Our program under which we periodically readjust the
percentage of your Account Value allocated to each Sub-Account to maintain a
pre-set level.

BENEFICIARY(IES)--The person(s) named by you to receive the Death Benefit under
the Contract.

CASH VALUE--The Account Value less any applicable Withdrawal Charges.

CONTRACT ANNIVERSARY--The same day and month as the Contract Date for each
subsequent year the Contract remains in force.

CONTRACT DATE--The effective date of insurance coverage under your Contract. It
is used to determine Contract Anniversaries, Contract Years and the Monthly
Date.

CONTRACT OWNER ("YOU")--The person(s) having the privileges of ownership defined
in the Contract. The Contract Owner(s) may or may not be the same person(s) as
the Insured(s). If your Contract is issued pursuant to a retirement plan, your
ownership privileges may be modified by the plan.

CONTRACT YEAR--Each twelve-month period beginning on the Contract Date and each
Contract Anniversary.

DEATH BENEFIT--The amount payable to the Beneficiary under the Contract upon the
death of the Insured, before payment of any unpaid Indebtedness.

DELIVERY DATE--If you pay your initial Premium upon receipt of your Contract,
the date on which your Contract is personally delivered to you; otherwise, five
days after we mail your Contract for delivery to you.

DOLLAR COST AVERAGING--Our program under which we periodically transfer a fixed
dollar amount to the Sub-Accounts of your choice, until the source you designate
is exhausted or you instruct us to stop.

FACE AMOUNT--The amount designated as such on the Contract Information page or
as subsequently changed in accordance with the terms of the Contract. It is used
to determine the amount of Death Benefit.

FIXED ACCOUNT--The portion of the Account Value allocated to our general
account.

GRACE PERIOD--A 61-day period during which the Contract will remain in force so
as to permit you to pay a sufficient amount to keep the Contract from lapsing.

INDEBTEDNESS--The sum of all unpaid Contract Loans and accrued loan interest.

1
<PAGE>
INSURED--A person whose life is insured under the Contract.

LOAN ACCOUNT--An account established for amounts transferred from the
Sub-Accounts or the Fixed Account as security for outstanding Indebtedness.

MONTHLY DATE--The same day in each month as the Contract Date. The day of the
month on which the Monthly Deduction is taken from your Account Value.

MONTHLY DEDUCTION--The amount deducted from the Account Value on each Monthly
Date for the cost of insurance charge, the Contract Fee, and the cost of any
benefit Agreement.

NET INVESTMENT FACTOR--The factor we use to determine the change in value of an
Accumulation Unit in any Valuation Period. We determine the Net Investment
Factor separately for each Sub-Account.

NET PREMIUM--A Premium less any Premium Expense Charge.

PLANNED PREMIUM--The amount of Premium selected by you to be paid periodically
as payment for the Contract.

PORTFOLIO(S)--The underlying mutual funds in which the Sub-Accounts invest. Each
Portfolio is an investment company registered with the SEC or a separate
investment series of a registered investment company.

PREMIUM--An amount paid to us as payment for the Contract by you or on your
behalf.

SEC--The United States Securities and Exchange Commission.

SUB-ACCOUNT--A division of the Variable Account, which invests wholly in shares
of one of the Portfolios.

SUB-ACCOUNT VALUE--The value of the assets held in a Sub-Account.

SURRENDER VALUE--The Cash Value less any unpaid Indebtedness.

TAX CODE--The Internal Revenue Code of 1986, as amended.

VALUATION DAY--Each day the New York Stock Exchange ("NYSE") is open for
business and we are open. We currently are open for variable business on each
day the NYSE is open, except for emergencies or other times permitted by the
SEC.

VALUATION PERIOD--The period of time over which we determine the change in the
value of the Sub-Accounts. Each Valuation Period begins at the close of normal
trading on the NYSE, currently 4:00 p.m. Eastern time, on each Valuation Day and
ends at the close of the NYSE on the next Valuation Day, or the next day we are
open, if later.

VARIABLE ACCOUNT--LLAC Variable Account, which is a segregated investment
account of Liberty Life.

2
<PAGE>

FEES AND EXPENSES

The following tables are designed to help you understand the fees and
expenses that you bear, directly or indirectly, as a Contract Owner. The first
table describes the Contract charges and deductions you directly bear under the
Contract. The second table describes the fees and expenses of the Portfolios
that you bear indirectly when you purchase a Contract. (See "Deductions and
Charges", beginning on page 39).

CONTRACT CHARGES AND DEDUCTIONS

CHARGES DEDUCTED FROM ACCOUNT VALUE

Monthly Cost of Insurance Charge(1)

<TABLE>
<CAPTION>
CURRENT GUARANTEED
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Ranges from $.05 per $1,000 of net amount at risk to Ranges from $.05 per $1,000 of net amount at risk to
$79 per $1000 net amount at risk. $83.33 per $1,000 of net amount at risk.

Monthly Contract Fee: $9.00 per month for Contracts with Face Amounts under
$100,000.

$6.00 per month for Contracts with Face Amounts of at
least $100,000.

TRANSACTION CHARGES

Transfer Fee: $25 per transfer.(2)

Partial Withdrawal Fee: The lesser of $25 or 2% of the amount withdrawn.

CHARGES DEDUCTED FROM PREMIUM

Maximum Premium Expense Charge: 5.5% of each Premium.(3)

DEFERRED SALES CHARGE

Maximum Withdrawal Charge: $50.00 per thousand dollars of Face Amount.(4)

CHARGES DEDUCTED FROM THE SUB-ACCOUNTS

Annual Variable Account Charges:

Expense Charge: .60% of daily net assets in the Variable Account.(5)

Federal Income Tax Charge: Currently none.(6)
</TABLE>

(1) The cost of insurance charges are based on attained age, sex, rating class,
and history of tobacco use of the Insured. The net amount at risk is the
difference between the Death Benefit divided by 1.0032737 and the Account
Value. See "Deductions and Charges-- Monthly Deduction--Cost of Insurance
Charge," on pages 40-41.

3
<PAGE>

(2) We currently waive the Transfer Fee on all transfers. We reserve the right
in the future to charge the Transfer Fee on all transfers after the first
twelve transfers in a Contract Year, as described above. See "Transfer Fee"
on page 44.

(3) The current Premium Expense Charge is 5.5% of the total Premiums paid in
each Contract Year up to twelve times the Lifetime Guaranteed Coverage
Monthly Premium and 3.5% of any Premium in excess of that amount. Twelve
times the Guaranteed Coverage Monthly Premium equals the guideline level
premium determined under Section 7702(c) of the Tax Code. We may change the
Premium Expense Charge but it will never exceed 5.5% of each Premium. See
"Premium Expense Charge" on page 39 below.

(4) This charge applies to all surrenders and partial withdrawals, unless you
are eligible for the Medical Waiver of Withdrawal Charge. See "Withdrawal
Charge--Medical Waiver of Withdrawal Charge" on page 43. We also will charge
a withdrawal charge if you decrease the Face Amount of your Contract. The
amount of your withdrawal charge at issue will depend on the Insured's age
at issue, sex, and rating class. The withdrawal charge declines to zero
percent after the tenth Contract Year. The withdrawal charge on a partial
withdrawal or decrease in Face Amount will be a percentage of the then
applicable withdrawal charge on a surrender, based on the percentage
decrease in the Face Amount resulting from the partial withdrawal. The
withdrawal charge is imposed to cover a portion of our premium tax expenses
and a portion of the sales expense incurred by us in distributing the
Contracts. See "Withdrawal Charge," on pages 41-42.

(5) Deducted each Valuation Period in an amount equal to 1/365 of the annual
rate shown, multiplied by the Account Value in the Variable Account on the
relevant Valuation Day, multiplied by the number of days in the relevant
Valuation Period.

(6) We currently do not assess a charge for federal income taxes that may be
attributable to the operations of the Variable Account. We reserve the right
to do so in the future. See "Deductions and Charges--Separate Account
Expense Charge", pages 39-40.

PORTFOLIO EXPENSES(1)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
(AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS, AS INDICATED IN THE NOTES)

<TABLE>
<CAPTION>
TOTAL FUND TOTAL FUND
MANAGEMENT OTHER ANNUAL
PORTFOLIO FEES EXPENSES EXPENSES
- ---------------------------------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
AIM V.I. Capital Appreciation......................................... 0.62% 0.05% 0.67%(2)
AIM V.I. Government Securities Fund................................... 0.50% 0.26% 0.76%(2)
AIM V.I. International Equity......................................... 0.75% 0.16% 0.91%(2)
Dreyfus Stock Index................................................... 0.25% 0.01% 0.26%(3)
Dreyfus Capital Appreciation.......................................... 0.57% 0.24% 0.81%(3)
Dreyfus Socially Responsible Growth................................... 0.75% 0.05% 0.80%(3)
1.00%
Colonial Small Cap Value.............................................. 0.00% 1.00% (4.32%)(4)
0.80%
Colonial High Yield Securities........................................ 0.00% 0.80% (1.84%)(4)
Colonial Strategic Income............................................. 0.65% 0.13% 0.78%(4)
Colonial Growth & Income.............................................. 0.80% 0.10% 0.90%
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
TOTAL FUND TOTAL FUND
MANAGEMENT OTHER ANNUAL
PORTFOLIO FEES EXPENSES EXPENSES
- ---------------------------------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
1.00%
Liberty All-Star Equity............................................... 0.76% 0.24% (1.04%)(4)
MFS Emerging Growth................................................... 0.75% 0.10% 0.85%
MFS Research.......................................................... 0.75% 0.11% 0.86%
1.00%
MFS Utilities......................................................... 0.75% 0.25% (1.01%)(5)
MFS Growth with Income................................................ 0.75% 0.13% 0.88%(5)
Stein Roe Balanced.................................................... 0.60% 0.05% 0.65%
Stein Roe Growth Stock................................................ 0.65% 0.05% 0.70%
Stein Roe Money Market................................................ 0.50% 0.12% 0.62%
</TABLE>

(1) All Trust and Portfolio expenses are based on 1998 expenses, except Colonial
Small Cap Value and Colonial High Yield Securities. Since those two
Portfolios commenced operations in 1998, their Total Fund Other Expenses are
annualized estimates based on their actual expenses. The expenses of the
Colonial Small Cap Value Fund, Colonial High Yield Securities Fund, Liberty
All-Star Equity Fund, and MFS Utilities Series reflect the agreement of each
Portfolio's adviser to reimburse expenses above the limits shown in notes
(4) and (5).

(2) AIM Advisors, Inc. ("AIM") may from time to time waive or reduce its fees.
Effective May 1, 1998, the AIM Portfolios reimburse AIM in an amount up to
0.25% of the average net asset value of each AIM Portfolio for expenses
incurred in providing or assuring that participating insurance companies
provide certain administrative services. However, AIM does not currently
seek any reimbursement with respect to certain services and does not seek
reimbursement of the cost of certain other services in excess of the amounts
charged by participating insurance companies. The Total Fund Other Expenses
for the AIM Portfolios include reimbursement paid for this purpose.

(3) The Dreyfus Corporation ("Dreyfus") has undertaken to reduce its management
fee and/ or reimburse the other expenses of the Dreyfus Stock Index Fund if
necessary to prevent the Portfolio's aggregate expenses from exceeding 0.40%
of the Portfolio's average net assets for the fiscal year. Dreyfus may end
this undertaking on at least 180 days prior notice. In addition, Dreyfus
and/or the subadvisers to the Dreyfus Portfolios may from time to time waive
receipt of their fees and/or voluntarily assume certain expenses of these
Portfolios. During the fiscal year ending December 31, 1998, neither Dreyfus
nor the subadvisers waived any fee or reimbursed expenses.

(4) Liberty Advisory Services Corp. has voluntarily agreed to reimburse all
expenses, including management fees, in excess of the following percentage
of the average annual net assets of each of the Trust's eligible Portfolios:
1.00% for Colonial Small Cap Value Fund, Liberty All-Star Equity, and
Colonial Growth & Income; and .80% for Colonial Strategic Income and
Colonial High Yield Securities. Each percentage shown in parentheses is an
estimate of what the total expenses would be in the absence of expense
reimbursement. Without such reimbursements, each such Portfolio's Management
Fees, Other Expenses, and Total Expenses would have been as follows: 0.80%.
3.52%,

5
<PAGE>

and 4.32% for the Colonial Small Cap Value Fund, 0.60%, 1.24%, and 1.84% for
the Colonial High Yield Securities Fund, and 0.80%, 0.24%, and 1.04% for the
Liberty All-Star Equity Portfolio.

(5) Massachusetts Financial Services Company ("MFS") has contractually agreed to
bear expenses for these Portfolios, subject to reimbursement from these
Portfolios, such that their "Other Expenses" shall not exceed 0.25% of their
average daily net assets during the current fiscal year. Otherwise, the
"Other Expenses" and "Total Annual Expenses" of the MFS Utilities Portfolio
would be 0.26% and 1.01%, respectively. MFS did not reimburse other expenses
of the MFS Growth with Income Portfolio during the fiscal year ended
December 31, 1998.

The following chart outlines the components of your Account Value. It is
intended to help you to understand how the fees and charges under the Contract
directly and indirectly affect your Account Value and benefits. You should use
this chart in conjunction with the more complete descriptions contained in other
parts of this prospectus and in your Contract.

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

PREMIUM

less a Premium Expense Charge of not more than 5.5% of each Premium,
for state premium taxes, certain federal tax liabilities,
and distribution expenses, equals

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

NET PREMIUM

Allocated to one or more Sub-Accounts
and/or the Fixed Account

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

ACCOUNT VALUE

On the Contract Date, your Account Value is equal to your initial Net Premium
minus any of the charges described below that are due on that date. Thereafter,
your Account Value may change daily, as described below.

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

ADJUSTMENTS TO ACCOUNT VALUE:

Over the life of your Contract, your Account Value will increase and/or decrease
as indicated below to reflect the following:

- Addition of new Net Premiums.

- Any increase due to the investment experience of the chosen Sub-Accounts.

- Addition of guaranteed interest at an annual effective rate of 4.0% (plus
any excess interest if applicable) on the portion of the Account Value
allocated to the Fixed Account.

- Addition of interest at an annual effective rate of 6.0% on the portion of
your Loan Account which serves as collateral for your preferred Contract
loans, if any.

- Addition of interest at an effective annual rate of 4.0% on the portion of
your Loan Account which serves as collateral for your other Contract
loans, if any.

6
<PAGE>

- Any decrease due to the investment experience of the chosen Sub-Accounts.

- Subtraction of any amounts withdrawn.

- Subtraction of the charges listed below, as applicable.

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

DAILY CHARGES

- Management fees and expenses are deducted from the share value of each
underlying Portfolio, and are reflected in the investment experience of
the corresponding Sub-Account.

- Subtraction of a daily charge equivalent to an annual rate of 0.60% of
average daily net assets from each Sub-Account for mortality and expense
risk expenses, administrative expenses, and certain other expenses.

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

MONTHLY CHARGES DEDUCTED FROM YOUR ACCOUNT VALUE

- Subtraction of a contract fee of $9.00 ($6.00 for Contracts with face
amounts of at least $100,000), for administrative expenses.

- Subtraction of a cost of insurance charge, reflecting the Death Benefit
under your Contract and the Account Value.

- If your Contract includes optional benefit agreements, subtraction of the
cost of those agreements.

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

TRANSACTION CHARGES

- Subtraction of a withdrawal charge, if you surrender your Contract,
withdraw Account Value or decrease the Face Amount of your Contract,
within ten years of issuance or any Face Amount increase. The withdrawal
charge is intended to cover state premium taxes, certain federal tax
liabilities, and distribution expenses. We waive the withdrawal charge in
certain circumstances.

- Subtraction of a withdrawal fee of up to $25 for each partial withdrawal,
for administrative expenses.

- Currently we waive the transfer fee. In the future, we may subtract a
transfer fee of up to $25 on each transfer after the first twelve in any
Contract year, for administrative expenses.

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

CONTRACT LOANS

- You may borrow a portion of your Account Value. A Contract loan is not
subtracted from your Account Value. However, an amount equal to the amount
of the Contract loan is transferred to the Loan Account, where it serves
as collateral for the loan.

- Interest of 6% annually is charged on Contract loans.

- Outstanding Contract loans, including unpaid interest, are subtracted from
death benefit and surrender proceeds.

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

7
<PAGE>
QUESTIONS AND ANSWERS ABOUT YOUR CONTRACT

These are answers to questions that you may have about some of the most
important features of your Contract. The Contract is described more fully in the
remainder of this Prospectus. Please read this Prospectus carefully. Unless
otherwise indicated, the description of the Contract contained in this
Prospectus assumes that the Contract is in force, that there is no Indebtedness,
and that current federal tax laws apply.

1. WHAT IS A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT?

The Contract has a Death Benefit, Account Value, and other features
similar to life insurance contracts providing fixed benefits. It is a
"flexible premium" contract because you have a great amount of
flexibility in determining when and how much Premium to pay. It is a
"variable" Contract because the Account Value and, in some circumstances,
the Death Benefit vary according to the investment performance of the
Sub-Accounts to which you have allocated your Net Premiums. The Account
Value is not guaranteed. Payment of the Death Benefit may be guaranteed
under the Contract's two Coverage Guarantees. This Contract provides you
with the opportunity to take advantage of any increase in your Account
Value, but you also bear the risk of any decrease.

2. WHO MAY PURCHASE A CONTRACT?

We will issue a Contract on the life of a prospective Insured age 0-80
who meets our underwriting standards.

3. WHAT IS THE DEATH BENEFIT?

While the Contract is in force, we will pay a Death Benefit to the
Beneficiary upon the death of the Insured. You may choose from two Death
Benefit Options available under this Contract: Option 1 and Option 2.
Under Option 1, the Death Benefit will be the greater of the Face Amount
or a percentage of the Account Value. Under Option 2, the Death Benefit
will be the greater of the Face Amount plus the Account Value or a
percentage of the Account Value. You may change your choice of Death
Benefit Option while this Contract is in force as specified in the
Contract. Before we pay the Death Benefit to the Beneficiary, however, we
will subtract an amount sufficient to repay any outstanding Indebtedness
and to pay any due and unpaid charges. In addition, if you choose Option
1 and you withdraw part of your Account Value, we will reduce the Face
Amount as described in this Prospectus on pages 36-37.

4. WHAT ARE THE GUARANTEED COVERAGE FEATURES OF THE CONTRACT?

Unless otherwise required in your state, this Contract includes three
Coverage Guarantees:

Three-Year Guaranteed Coverage;
Limited Guaranteed Coverage; and
Lifetime Guaranteed Coverage.

8
<PAGE>

While any Coverage Guarantee is in effect, and you have no outstanding
Indebtedness, your Contract will not lapse if the Cash Value is
insufficient to pay the Monthly Deduction.

Each Coverage Guarantee remains in effect until the date specified in
your Contract, provided that you pay sufficient Premium. Three-Year
Guaranteed Coverage terminates on the third Contract Anniversary. Limited
Guaranteed Coverage terminates automatically at the later of the
Insured's age 75 or 15 years after the Contract Date. Lifetime Guaranteed
Coverage does not have an automatic termination date. Accordingly, if you
pay sufficient Premium, this Coverage Guarantee will stay in effect until
the Insured dies. The amount of Premiums required to keep each Coverage
Guarantee in effect differs, as explained in the Contract and page 18 of
this Prospectus. If you do not pay sufficient Premiums, one or more
Coverage Guarantees will terminate. If Limited or Lifetime Guaranteed
Coverage ends, you will be given a fixed period of time to pay sufficient
additional Premiums to restore the guarantee. Even if all of the
Guarantees terminate, however, your Contract will stay in force provided
that the Surrender Value is sufficient to pay the Monthly Deductions as
they come due. In Massachusetts, Lifetime Guaranteed Coverage is not
available and Limited Guaranteed Coverage ends five years after the
Contract Date. The Coverage Guarantees are explained in more detail in
"Guaranteed Coverage Monthly Premium" on page 18 below.

5. HOW WILL THE ACCOUNT VALUE OF MY CONTRACT BE DETERMINED?

Your Net Premiums are invested in one or more of the Sub-Accounts or
allocated to the Fixed Account, as you instruct us. Your Account Value is
the sum of the values of your interests in the Sub-Accounts, plus the
values in the Fixed Account and the Loan Account. Your Account Value will
depend on the investment performance of the Sub-Accounts and the amount
of interest we credit to the Fixed Account and the Loan Account, as well
as the Net Premiums paid, partial withdrawals, and charges assessed. We
do not guarantee a minimum Account Value on the portion of your Net
Premiums allocated to the Variable Account.

6. WHAT ARE THE PREMIUMS FOR THIS CONTRACT?

You have considerable flexibility as to the timing and amount of your
Premiums. You may pay Premiums during the Insured's lifetime from the
Contract Date until the Contract Anniversary following the Insured's
100th birthday. You may pay Planned Premiums monthly, quarterly,
semiannually or annually. You may change the timing of your Planned
Premiums at any time. You may also pay unscheduled Premiums. You are not
required to pay any level of Premium. However, to take advantage of the
Coverage Guarantees under your Contract, you must pay the cumulative
Guaranteed Coverage Monthly Premium due. We may refuse any Premium that
would cause the Contract to lose its status as a life insurance contract
under the Tax Code. We may require you to provide evidence of
insurability, if an increase in the Death Benefit would result from an
unscheduled Premium.

9
<PAGE>
7. CAN I INCREASE OR DECREASE MY CONTRACT'S FACE AMOUNT?

Yes, you have considerable flexibility to increase or decrease your
Contract's Face Amount. After the first Contract Year, once each Contract
Year you may request an increase and/or a decrease by sending us a
written request. Your requested increase must be at least $25,000. If you
request an increase in Face Amount, we may require that you provide us
with evidence of insurability that meets our underwriting standards. An
increase in the Face Amount of your Contract will increase the charges
deducted from your Account Value and will result in an additional
Withdrawal Charge for the amount of the increase. If you request a
decrease in the Face Amount of your Contract, we will charge a portion of
the Withdrawal Charge in proportion to the percentage decrease in Face
Amount. We will not decrease the Face Amount of your Contract below
$50,000. For more detail, see "Change in Face Amount", on page 32.

8. WHEN IS THE CONTRACT EFFECTIVE?

If we approve your application, your Contract generally will be effective
as of the later of the date that we receive your initial Premium and the
date we approve your application. The effective date of your Contract
will be designated your Contract's Contract Date. If we have not
previously received your initial Premium, when we deliver your Contract
we will require you to pay Premium to place your insurance in force.
While your application is in underwriting, if you have paid your initial
Premium, we may provide you with temporary life insurance coverage in
accordance with the terms of our conditional receipt.

If we approve your application, you will earn interest and investment
return on your Net Premiums from the Contract Date. We will also begin to
deduct the Contract charges as of the Contract Date. We may temporarily
allocate a portion of your initial Net Premium to our Fixed Account until
we allocate it to the Sub-Accounts in accordance with the procedures
described in the Answer to Question 9.

If we reject your application, we will not issue you a Contract. We will
return any Premiums you have paid, adding interest at the rate required
in your state. We will not subtract any contract charges from the amount
we refund to you.

9. HOW ARE MY NET PREMIUMS ALLOCATED?

Before your Premiums are allocated to the Account Value, we deduct a
Premium Expense Charge from each Premium. The current Premium Expense
Charge is 5.5% of the total Premiums paid in each Contract Year up to
twelve times the Lifetime Guaranteed Coverage Monthly Premium and 3.5% of
any Premium in excess of that amount. This charge covers a portion of our
distribution expenses, state premium tax expenses and certain federal tax
liabilities associated with the receipt of Premiums. For more detail, see
"Premium Expense Charge" on page 39. The remaining amount is called the
Net Premium.

When you apply for the Contract, you specify in your application how to
allocate your Net Premiums among the Sub-Accounts and the Fixed Account.
You must use whole number percentages and the total allocations must
equal 100%. We allocate any subsequent Net Premiums in those percentages
until you give us new written

10
<PAGE>
instructions. You may allocate your Net Premiums to up to ten
Sub-Accounts and the Fixed Account. You must allocate at least five
percent of your Net Premiums to each option that you choose. In the
future, we may change these limits.

We generally allocate your initial Net Premium to the Sub-Accounts and
the Fixed Account as of the Contract Date. Subsequent Net Premiums
generally will be allocated as of the date your Net Premium is received
in our Service Center. Until the fifth day after the end of the right to
return period, however, we will not allocate more than $2,000 of your Net
Premiums to the Sub-Accounts. Prior to that date, if your Premium
allocation instructions would require us to allocate more than $2,000 to
the Sub-Accounts, we will allocate the first $2,000 to the Sub-Accounts
in accordance with your instructions and temporarily allocate the excess
to the Fixed Account. We generally will then reallocate that excess
amount (including any interest) among the Sub-Accounts and the Fixed
Account, in accordance with your instructions, on the fifteenth day after
the Delivery Date. This period may be longer or shorter, depending on the
length of the right to return period in your state, as it will always
equal five days plus the number of days in the right to return period in
your state. We may increase or decrease this temporary allocation limit
at any time.

You may transfer Account Value among the Sub-Accounts and the Fixed
Account while the Contract is in force, by writing to us or calling us at
1-800-xxx-xxxx. We currently are not charging a transfer fee on all
transfers. Under the Contract, however, we may charge a fee of $25 per
transfer on each transfer after the first twelve transfers in any
Contract Year, including Dollar Cost Averaging and Asset Rebalancing
transfers. We may change the number of free transfers at any time,
subject to the limits described in "Transfer Fee" on page 44, but the
transfer fee will never exceed $25 per transfer. While you may also
transfer amounts from the Fixed Account, certain restrictions apply. For
more detail, see "Transfer of Account Value" and "Transfers Authorized by
Telephone", on pages 21 and 22.

You may also use our automatic Dollar Cost Averaging program or our Asset
Rebalancing program. Under the Dollar Cost Averaging program, each month
amounts are automatically transferred to the Sub-Accounts at regular
intervals from the account of your choice. For more detail, see "Dollar
Cost Averaging", on page 22.

Under the Asset Rebalancing program, you periodically can readjust the
percentage of your Account Value allocated to each Sub-Account to
maintain a pre-set level. Investment results will shift the balance of
your Account Value allocations. If you elect Asset Rebalancing, we
periodically transfer your Account Value back to the specified
percentages at the frequency that you specify. For more detail, see
"Asset Rebalancing", on page 22.

10. WHAT ARE MY INVESTMENT CHOICES UNDER THE CONTRACT?

You can allocate and reallocate your Account Value among the
Sub-Accounts, each of which in turn invests in a single Portfolio. Under
the Contract, the Variable Account currently invests in the following
Portfolios:

11
<PAGE>
AIM VARIABLE INSURANCE FUNDS, INC.

AIM V.I. Capital Appreciation Fund
AIM V.I. Government Securities Fund
AIM V.I. International Equity Fund

DREYFUS

Dreyfus Stock Index Fund
Dreyfus Variable Investment Fund, Capital Appreciation Portfolio
Dreyfus Socially Responsible Growth Fund, Inc.

LIBERTY VARIABLE INVESTMENT TRUST

Colonial Small Cap Value Fund, Variable Series
Colonial High Yield Securities Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Growth & Income Fund, Variable Series
Liberty All-Star Equity Fund, Variable Series

MFS VARIABLE INSURANCE TRUST

MFS Emerging Growth Series
MFS Research Series
MFS Utilities Series
MFS Growth with Income Series

STEIN ROE VARIABLE INVESTMENT TRUST

Stein Roe Balanced Fund, Variable Series
Stein Roe Growth Stock Fund, Variable Series
Stein Roe Money Market Fund, Variable Series

Each Portfolio holds its assets separately from the assets of the other
Portfolios. Each Portfolio has distinct investment objectives and
policies, which are described in the accompanying Prospectuses for the
Portfolios.

In addition, the Fixed Account is available.

11. MAY I TAKE OUT A CONTRACT LOAN?

Yes, you may borrow money from us using your Contract as security for the
loan. You may borrow up to 90% of the Cash Value of your Contract. In
some instances Contract Loans are treated as distributions for federal
tax purposes. Therefore, you may incur tax liabilities if you borrow a
Contract Loan. For more detail, see "Contract Loans", on pages 34-35, and
"Contracts Which Are MECs", on page 49.

12. WHAT ARE THE CHARGES DEDUCTED FROM MY PREMIUMS AND MY ACCOUNT VALUE?

PREMIUM EXPENSE CHARGE. As noted above, we deduct a Premium Expense
Charge from each Premium before it is allocated to the Account Value.
This charge currently is 5.5% of the total Premiums paid in each Contract
Year up to twelve times the Lifetime Guaranteed Coverage Monthly Premium
and 3.5% of any Premium in excess of that amount. We may change this
charge at any time, but it will never exceed

12
<PAGE>

5.5% of each Premium. This charge covers a portion of our state premium
tax expenses, certain federal tax expenses associated with the receipt of
premium, and our distribution expenses.

SEPARATE ACCOUNT EXPENSE CHARGE. On each Valuation Day we deduct the
Separate Account Expense Charge from the Sub-Accounts to compensate
Liberty Life for its expenses incurred and certain risks assumed under
the Contracts. The Separate Account Expense Charge is calculated at an
annual rate equal to .60% of average daily net assets.

MONTHLY DEDUCTION. We also deduct a monthly deduction from your Account
Value for the cost of insurance charge, the Contract Fee, and the cost of
any benefit Agreement. The cost of insurance charge covers our
anticipated mortality costs. The Contract Fee covers certain
administrative expenses in connection with the Contracts. We allocate the
monthly deduction pro rata among your Account Value in the Sub-Accounts
and the Fixed Account.

TRANSFER FEE. We currently waive the transfer fee on all transfers. Under
the Contract, however, we may charge a fee of $25 per transfer on each
transfer, including Portfolio Rebalancing and Dollar Cost Averaging
transfers, after the 12th transfer in any Contract Year. We may change
the number of free transfers at any time, subject to the limits described
in "Transfer Fee" on page 44, but the transfer fee will never exceed $25.

WITHDRAWAL CHARGE. We impose a withdrawal charge to cover a portion of
our premium tax expenses and a portion of the sales expenses we incur in
distributing the Contracts. These sales expenses include agents'
commissions, advertising, and the printing of Prospectuses. The
withdrawal charge is described in the answer to Question 13 below and in
"Withdrawal Charge" on page 41. We also impose a withdrawal fee of up to
$25 on each partial withdrawal after the first in each Contract Year. The
withdrawal fee is used to cover our administrative expenses in processing
your partial withdrawal request.

OTHER. In addition to our charges under the Contract, each Portfolio
deducts amounts from its assets to pay its investment advisory fee and
other expenses. The Prospectuses for the Portfolios describe their
respective charges and expenses in more detail. We may receive
compensation from the investment advisers or administrators of the
Portfolios. Such compensation will be consistent with the services we
provide or the cost savings resulting from the arrangement and therefore
may differ between Portfolios.

FOR MORE INFORMATION. The charges assessed under the Contract are
summarized in the table entitled "Contract Charges and Deductions" on
pages 3-4 and described in more detail in "Deductions and Charges",
beginning on page 39.

13. DO I HAVE ACCESS TO THE VALUE OF MY CONTRACT?

While the Contract is in force, you may surrender your Contract for the
Surrender Value, which is the Cash Value less any Indebtedness, and
unpaid charges. Upon surrender, life insurance coverage under the
Contract will end. You may also withdraw part of your Account Value
through a partial withdrawal. You may not

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<PAGE>

withdraw less than $250 at one time. Currently, if the Account Value
after any partial withdrawal would be less than $500, we may treat your
request as a request to surrender your Contract. We may waive or change
this limit. We do not permit any partial withdrawals during the first
Contract Year. For more detail, see "Amount Payable on Surrender of the
Contract" and "Partial Withdrawals", on pages 35 and 36.

We may deduct a withdrawal charge and/or a withdrawal fee on a surrender
or a partial withdrawal.

WITHDRAWAL CHARGE. If you surrender your Contract, take a partial
withdrawal or decrease the Face Amount of your Contract, we may deduct a
withdrawal charge. The withdrawal charge on a full surrender equals the
amount shown in the withdrawal charge table in your Contract, plus any
additional withdrawal charge due to increases in the Face Amount of your
Contract. The amount of the withdrawal charge decreases over time.

Generally, the initial amount of the withdrawal charge is equal to the
Face Amount of your Contract multiplied by the applicable rate per
thousand dollars of Face Amount. The applicable rate depends on the
Insured's issue age, sex and underwriting class. For example, if the
Insured is age 45 when your Contract is issued, the applicable rates per
thousand, for both the Preferred and Standard rate classes, are as
follows:

<TABLE>
<S> <C>
Male Non-Smoker $ 13.68
Male Smoker $ 21.96
Female Non-Smoker $ 9.72
Female Smoker $ 13.32
Unisex Non-Smoker $ 12.84
Unisex Smoker $ 20.16
</TABLE>

The rates for each category are greater or lesser according to the age of
the Insured when your Contract is issued. The maximum rate for each
category is $50.00 per $1,000 of Face Amount.

If you surrender your Contract after ten Contract Years have elapsed, we
will not charge a withdrawal charge (unless you have increased the Face
Amount of your Contract, as explained below). Before that time, we
determine the applicable withdrawal charge by multiplying the initial
withdrawal charge on your Contract by the appropriate withdrawal charge
percentage for the Contract Year in which the surrender occurs.

We also charge a withdrawal charge on partial withdrawals. The applicable
withdrawal charge will be a pro rata share of then current withdrawal
charge on a complete surrender. If you choose Death Benefit Option 1, the
withdrawal charge on a partial withdrawal will be based on the percentage
by which the partial withdrawal reduces the Face Amount of your Contract.
If you choose Death Benefit Option 2, you will pay no withdrawal charge
on a partial withdrawal, because partial withdrawals do not reduce the
Face Amount of Contracts under Option 2.

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<PAGE>
If you increase the Face Amount of your Contract, we will determine an
additional withdrawal charge amount applicable to the amount of the
increase. We calculate the additional withdrawal charge using the same
procedures described above, except that we use the Insured's age and
underwriting class at the time of the increase, rather than at the time
your Contract was issued. We will include in your Contract a table
showing the withdrawal charge applicable to your Contract.

If you decrease the Face Amount of your Contract, we will charge a
Withdrawal Charge in proportion to the decrease. The amount charged will
equal the Withdrawal Charge then applicable to a full surrender,
multiplied by the percentage decrease in the Face Amount. The amount
charged will be subtracted from your Account Value.

We also waive the withdrawal charge for qualified medical stays. This
provision can differ by state, so you should refer to your Contract.

WITHDRAWAL FEE. In addition to the withdrawal charge, we may charge a
withdrawal fee on any partial withdrawal after the first in any Contract
Year. The withdrawal fee will equal the lesser of $25 or two percent of
the amount withdrawn. The withdrawal fee does not apply to full
surrenders. The withdrawal fee is intended to compensate us for our
administrative costs in processing your partial withdrawal request.

For more detail, see "Withdrawal Charge", on pages 41-42.

14. WHAT ARE THE TAX CONSEQUENCES OF BUYING THIS CONTRACT?

Your Contract is structured to meet the definition of a life insurance
contract under the Tax Code. We may need to limit the amount of Premiums
you pay under the Contract to ensure that your Contract continues to meet
that definition.

Current federal tax law generally excludes all death benefits from the
gross income of the beneficiary of a life insurance policy. In addition,
you generally are not subject to taxation on any increase in the Account
Value until it is withdrawn. Generally, you will be taxed on surrender
proceeds and the proceeds of any partial withdrawals only if those
amounts, when added to all previous distributions, exceed the total
Premiums paid. Amounts received upon surrender or withdrawal in excess of
Premiums paid will be treated as ordinary income.

In some circumstances, your Contract will be considered a "modified
endowment contract", which is a form of life insurance contract under the
Tax Code. Special rules govern the tax treatment of modified endowment
contracts. Depending on the amount and timing of your Premiums, your
Contract may meet that definition. Under current tax law, death benefit
payments under modified endowment contracts, like death benefit payments
under other life insurance contracts, generally are excluded from the
gross income of the beneficiary. Withdrawals and Contract Loans, however,
are treated differently. Amounts withdrawn and Contract Loans are treated
first as income, to the extent of any gain, and then as a return of
Premium. The income portion of the distribution is includable in your
taxable income. Also, an additional ten percent penalty tax is generally
imposed on the taxable portion of amounts received before age 59 1/2. For
more information on the tax treatment of the Contract, see "Federal Tax
Considerations", beginning on page 46, and consult your tax adviser.

15
<PAGE>
15. CAN I RETURN THIS CONTRACT AFTER IT HAS BEEN DELIVERED?

In many states, you may cancel your Contract by returning it to us within
ten days after you receive it. In some states, however, this right to
return period may be longer, as provided by state law. If you return your
Contract, the Contract terminates and, in most states, we will pay you an
amount equal to your Premiums. Since state laws differ as to the
consequences of returning a Contract, you should refer to your Contract
for specific information about your circumstances.

16. WHEN DOES COVERAGE UNDER THE CONTRACT END?

Your Contract provides Three-Year Guaranteed Coverage, Limited Guaranteed
Coverage and Lifetime Guaranteed Coverage, which you can keep in effect
for the period specified in your Contract by paying sufficient Premiums.
Under each Coverage Guarantee, if you do not have any outstanding
Indebtedness and your total Premiums at least equal the applicable
Guaranteed Coverage Monthly Premiums (net of any partial withdrawals),
your Contract will not lapse during the applicable coverage period,
regardless of changes in the Account Value. Your Contract will terminate
if you voluntarily surrender your Contract. If no Coverage Guarantee is
in effect, your Contract may also terminate if on a Monthly Date the
Surrender Value is insufficient to pay the Monthly Deduction and you do
not pay an amount sufficient to keep the Contract in force by the end of
the 61-day Grace Period.

17. CAN I GET AN ILLUSTRATION TO HELP ME UNDERSTAND HOW CONTRACT VALUES
CHANGE WITH INVESTMENT EXPERIENCE?

At your request we will furnish you with a free, personalized
illustration of Account Values, Surrender Values and Death Benefits. The
illustration will be personalized to reflect the proposed Insured's age,
sex, underwriting classification, Planned Premiums, and any available
additional benefit agreements that you requested. (See "Optional
Insurance Benefits," at pages 32-33 below.) The illustrated Account
Values, Surrender Values and Death Benefits will be based on certain
hypothetical assumed rates of return for the Variable Account. Your
actual investment experience probably will differ, and as a result the
actual values under your Contract at any time may be higher or lower than
those illustrated. The personalized illustrations will follow the
methodology and format of the hypothetical illustrations that we filed
with the SEC in the registration statement.

PURCHASE OF CONTRACT AND ALLOCATION OF NET PREMIUMS

APPLICATION FOR A CONTRACT. You may apply to purchase a Contract by
submitting a written application to us through one of our authorized sales
representatives. We will not issue Contracts to insure people who are older than
age 80. Before we issue a Contract, we will require you to submit evidence of
insurability satisfactory to us. Acceptance of your application is subject to
our underwriting rules. We reserve the right to reject your application for any
lawful reason. If we do not issue a Contract to you, we will return your Premium
to you. We reserve the right to change the terms or conditions of your Contract
to comply with

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<PAGE>
differences in applicable state law. Variations from the information appearing
in this Prospectus due to individual state requirements are described in
supplements which are attached to this Prospectus or in endorsements to the
Contract, as appropriate.

In general, we will deliver your Contract when (1) we have received your
initial Premium and (2) we have determined that your application meets our
underwriting requirements. The Contract Date will be the effective date of
insurance coverage under your Contract. We use the Contract Date to determine
Contract Anniversaries, Contract Years, and Monthly Dates.

We will not accept your initial Premium with your application if the
requested Face Amount of your Contract exceeds our then-current limit. In other
cases, you may choose to pay the initial Premium with your application. If you
did not submit your initial Premium with your application, when we deliver your
Contract we will require you to pay sufficient Premium to place your insurance
in force.

If we approve your application, your Contract generally will be effective as
of the later of the date that we receive your initial Premium and the date we
approve your application. In our discretion, we may permit an earlier Contract
Date. While your application is in underwriting, if you have paid your initial
Premium we may provide you with temporary life insurance coverage in accordance
with the terms of our conditional receipt.

If we approve your application, you will earn interest and/or investment
return on your Net Premium from the Contract Date. We will also begin to deduct
the Contract charges as of the Contract Date. We may temporarily allocate a
portion of your initial Net Premium to our Fixed Account until we allocate it to
the Sub-Accounts and the Fixed Account in accordance with the procedures
described in the "Allocation of Net Premiums" on page 19 below.

If we reject your application, we will not issue you a Contract. We will
return any Premium you have paid, adding interest at the rate required in your
state. We will not subtract any contract charges from the amount we refund to
you.

PREMIUMS. You must pay an initial Premium to purchase a Contract. You may
pay additional Premiums during the Insured's lifetime from the Contract Date
until the Contract Anniversary following the Insured's 100th birthday. You may
pay Planned Premiums at the intervals selected in your application. You may
change the amount or interval of your Planned Premiums at any time by written
request. The amount of each Planned Premium must at least equal our minimum. We
also reserve the right to limit the amount of any increase in a Planned Premium.
You may pay unscheduled Premiums, provided the payment is at least $50.00, and
the Premium will not disqualify the Contract as a life insurance contract under
the Tax Code. If any unscheduled Premium increases the Death Benefit by more
than it increases the Account Value, we will require evidence of insurability
satisfactory to us.

While your Contract will show a Planned Premium amount, you are not required
to pay Planned Premiums. Your Contract will not lapse merely because you did not
pay a Planned Premium.

Even if you pay all of the Planned Premiums, your Contract nevertheless may
enter the Grace Period and thereafter lapse if no Coverage Guarantee is in
effect and the Surrender Value is no longer enough to cover the Monthly
Deductions. However, paying Planned Premiums can help to keep your Contract in
force if your payments at least equal the applicable Guaranteed Coverage
Premiums.

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<PAGE>
If you owe any Indebtedness under the Contract, we will treat any
unscheduled Premium as a repayment of the Indebtedness and not as additional
Premium. You may pay Premiums at our Service Center or to an authorized agent.

MODIFIED ENDOWMENT CONTRACT. Under certain circumstances, a Contract could
be classified as a "modified endowment contract", a category of life insurance
contract defined in the Tax Code. If your Contract were to become a modified
endowment contract, distributions and loans from the Contract could result in
current taxable income for you, as well as other adverse tax consequences. These
tax consequences are described in more detail in "Tax Matters--Modified
Endowment Contracts", on pages 49-50.

Your Contract could be deemed to be a modified endowment contract if, among
other things, you pay too much Premium or the Death Benefit is reduced. We will
monitor the status of your Contract and advise you if you need to take action to
prevent your Contract from being deemed a modified endowment contract. If you
pay a Premium that would result in your Contract being deemed a modified
endowment contract, we will notify you and allow you to request a refund of the
excess Premium, or other action, to avoid having your Contract being deemed a
modified endowment contract. If, however, you choose to have your Contract
deemed a modified endowment contract, we will not refund the Premium.

If you replace a modified endowment contract issued by another insurer with
a Contract, your Contract will also be deemed to be a modified endowment
contract. Our ability to determine whether a replaced contract issued by another
insurer is a modified endowment contract is based solely on the sufficiency of
the contract data we receive from the other insurer. We do not consider
ourselves to be liable to you if that data is insufficient to accurately
determine whether the replaced contact is a modified endowment contract. You
should discuss this issue with your tax adviser if it pertains to your
situation.

GUARANTEED COVERAGE MONTHLY PREMIUM. This Contract includes three Coverage
Guarantees:

Three-Year Guaranteed Coverage;
Limited Guaranteed Coverage; and
Lifetime Guaranteed Coverage

These Coverage Guarantees are intended to enable you to ensure that your
Contract will remain in force during a specified period regardless of changes in
the Account Value. The specified period for Three-Year Guaranteed Coverage is
the first three Contract Years. The specified period for Limited Guaranteed
Coverage is the period from the Contract Date until the later of (a) the
Insured's seventy-fifth birthday or (b) the fifteenth Contract Anniversary.
Lifetime Guaranteed Coverage will remain in effect until the Insured's death,
provided that sufficient Guaranteed Coverage Monthly Premiums are paid as
described below.

As a general rule, your Contract will enter the Grace Period, and may lapse,
if the Surrender Value is not sufficient to pay a Monthly Deduction when it is
due. Under each Coverage Guarantee, however, we guarantee that regardless of
declines in your Account Value, your Contract will not enter the Grace Period as
long as you have no outstanding Indebtedness and you have paid sufficient total
Premiums. To keep a Coverage Guarantee in effect, your total Premiums must at
least equal: (a) the total of the applicable Guaranteed Coverage Monthly
Premiums for each month since the Contract Date; plus (b) the amount of

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<PAGE>

any partial withdrawals. However, if Lifetime Guaranteed Coverage is still in
effect and the Contract is still in force when the Insured reaches age 100, we
will not require you to pay additional premium, but the Death Benefit thereafter
will be the greater of the Face Amount or 101% of the Account Value. The
Guaranteed Coverage Monthly Premium for each Coverage Guarantee under your
Contract is set forth on the Contract Information Page. The Guaranteed Coverage
Monthly Premium for each Coverage Guarantee is based in the Insured's age at
issue, sex and rate class, your Contract's Face Amount and Death Benefit Option,
any additional benefit agreement, and the duration of the Coverage Guarantee. If
you increase or decrease the Face Amount of your Contract, change your Death
Benefit Option, or add a benefit agreement, we will adjust the Guaranteed
Coverage Monthly Premium amount applicable after the change.

If at any time your total Premiums are insufficient to keep the Limited or
Lifetime Coverage Guarantee in effect, we will notify you and you will have a
fixed period of time, currently sixty months, to satisfy the Premium shortfall.
If you do not, that Coverage Guarantee will end and it cannot be reinstated. If
the Three-Year Coverage Guarantee terminates, it may not be reinstated. If all
of the Coverage Guarantees are no longer in effect, your Contract will stay in
force provided that the Surrender Value is sufficient to pay the Monthly
Deductions as they come due. We may change the amount of time you have to
reinstate a Coverage Guarantee, but we will not reduce it to fewer than twelve
months. For more detail about the circumstances in which the Contract will
lapse, see "Termination and Grace Period", on page 38.

In some states, the Coverage Guarantees may be unavailable or the terms may
differ. In Massachusetts, Lifetime Guaranteed Coverage is not available and
Limited Guaranteed Coverage ends five years after the Contract Date.

ALLOCATION OF NET PREMIUMS. We generally allocate your initial Net Premium
to the Sub-Accounts and the Fixed Account as of the Contract Date. Subsequent
Net Premiums generally will be allocated as of the date your Net Premium is
received in our Service Center. Until the fifth day after the end of the right
to return period, however, we will not allocate more than $2,000 of your Net
Premiums to the Sub-Accounts. Before then, if your Premium allocation
instructions would require us to allocate more than $2,000 to the Sub-Accounts,
we will allocate the first $2,000 to the Sub-Accounts in accordance with your
instructions and temporarily allocate the excess to the Fixed Account. We
generally will then reallocate that excess amount (including any interest) among
the Sub-Accounts and the Fixed Account, in accordance with your instructions, on
the fifteenth day after the Delivery Date. This period may be longer, depending
on the length of the right to return period in your state, as it will always
equal five days plus the number of days in the right to return period in your
state. The amount temporarily allocated to the Fixed Account will earn interest
until it is reallocated to the Sub-Accounts. In our discretion, in the future we
may increase or decrease the temporary allocation limit or otherwise change our
procedures for allocating Net Premiums received before the end of the right to
return period. We will not change the temporary allocation provisions of your
Contract once we have delivered it to you.

If there are outstanding requirements when we issue your Contract that
prevent us from placing your Contract in force, your Premiums will not be
allocated until all requirements are satisfied. In addition, if we permit you to
select a Contract Date before receipt of your initial

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<PAGE>

Net Premium and approval of your application, we may initially allocate your
entire Net Premium to our Fixed Account until the date on which we otherwise
would have initially allocated your Net Premiums to the Sub-Accounts.

You must specify your allocation percentages in your Contract application.
Percentages must be in whole numbers and the total allocation must equal 100%.
We will allocate your Net Premiums in those percentages, until you give us new
allocation instructions.

You initially may allocate your Account Value to up to ten Sub-Accounts and
the Fixed Account. Moreover, you may not allocate less than five percent of your
Account Value to any one option. You subsequently may add or delete Sub-Accounts
and/or the Fixed Account from your allocation instructions without regard to
this limit. Your allocation to the Fixed Account, if any, does not count against
this limit. In the future we may change these limits.

Excepting your initial Premium, we generally will allocate your Net Premiums
to the Sub-Accounts and the Fixed Account as of the date we receive your Premium
in our Service Center. If an unscheduled Premium requires underwriting, however,
we may delay allocation until after we have completed underwriting. We will
follow the allocation instructions in our file, unless you send us new
allocation instructions with your Premium. If you have any outstanding
Indebtedness, we will apply any unscheduled Premium to your outstanding loan
balance until it is fully repaid, unless you instruct us otherwise in writing.

We will make all valuations in connection with the Contract, other than the
initial Premium and other Premiums requiring underwriting, on the date we
receive your Premium or request for other action at our Service Center, if that
date is a Valuation Day. Otherwise we will make that determination on the next
succeeding day which is a Valuation Day.

ACCOUNT VALUE. Your Account Value is the sum of the value of your interest
in the Sub-Accounts you have chosen, plus your Fixed Account balance, plus your
Loan Account balance. Your Account Value may increase or decrease daily to
reflect the performance of the Sub-Accounts you have chosen, the addition of
interest credited to the Fixed Account and the Loan Account, the addition of Net
Premium, and the subtraction of partial withdrawals and charges assessed. There
is no minimum guaranteed Account Value.

On the Contract Date, your Account Value will equal the initial Net Premium
less the Monthly Deduction for the first Contract Month.

On each Valuation Day, the value of your interest in a particular
Sub-Account will equal:

(1) The total value of your Accumulation Units in the Sub-Account; plus

(2) Any Net Premium received from you and allocated to the Sub-Account
during the current Valuation Period; plus

(3) Any Account Value transferred to the Sub-Account during the current
Valuation Period; minus

(4) Any Account Value transferred from the Sub-Account during the current
Valuation Period; minus

(5) Any amounts withdrawn by you (plus the applicable withdrawal charge and
withdrawal fee) from the Sub-Account during the current Valuation Period;
minus

20
<PAGE>
(6) The portion of any Monthly Deduction allocated to the Sub-Account during
the current Valuation Period for the Contract Month following the Monthly
Date.

On each Valuation Day, your Fixed Account balance will equal:

(1) The Fixed Account balance on the previous Valuation Day; plus

(2) Any Net Premium allocated to it; plus

(3) Any Account Value transferred to it from the Sub-Accounts or the Loan
Account; plus

(4) Interest credited to it; minus

(5) Any Account Value transferred out of it; minus

(6) Any amounts withdrawn by you (plus the applicable withdrawal charge);
minus

(7) The portion of any Monthly Deduction allocated to the Fixed Account.

All values under the Contract equal or exceed those required by law.
Detailed explanations of methods of calculation are on file with the appropriate
regulatory authorities.

ACCUMULATION UNIT VALUE. The Accumulation Unit Value for each Sub-Account
will vary to reflect the investment experience of the corresponding Portfolio
and the deduction of certain expenses. We will determine the Accumulation Unit
Value for each Sub-Account on each Valuation Day. A Sub-Account's Accumulation
Unit Value for a particular Valuation Day will equal the Sub-Account's
Accumulation Unit Value on the preceding Valuation Day multiplied by the Net
Investment Factor for that Sub-Account for the Valuation Period then ended. The
Net Investment Factor for each Sub-Account is: (1) divided by (2) minus (3),
where: (1) is the sum of (a) the net asset value per share of the corresponding
Portfolio at the end of the current Valuation Period and (b) the per share
amount of any dividend or capital gains distribution by that Portfolio, if the
ex-dividend date occurs in that Valuation Period; (2) is the net asset value per
share of the corresponding Portfolio at the beginning of the Valuation Period;
and (3) is an amount equal to the Separate Account Expense Charge imposed during
the Valuation Period.

You should refer to the Prospectuses for the Portfolios, which accompany
this Prospectus, for a description of how the assets of each Portfolio are
valued, since that determination directly affects the investment experience of
the corresponding Sub-Account and, therefore, your Account Value.

TRANSFER OF ACCOUNT VALUE. While the Contract is in force, you may transfer
Account Value among the Fixed Account and Sub-Accounts in writing or by
telephone. You may not request a transfer of less than $250 from a single
Sub-Account, unless the amount requested is your entire balance in the
Sub-Account. If less than $500 would remain in a Sub-Account after a transfer,
we may require you to transfer the entire balance of the Sub-Account. We reserve
the right to change these minimums.

We currently are waiving the transfer fee on all transfers, including Dollar
Cost Averaging and Asset Rebalancing transfers. Under the Contract, however, we
may charge a maximum transfer fee of $25 on each transfer after the first twelve
transfers in any Contract Year. We may impose a limit on the number of free
transfers or change that number, at any time.

We currently do not limit the number of Sub-Accounts to which you may
allocate your Account Value, other than in your initial allocation. We may
impose a limit in the future.

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As a general rule, we only make transfers on days when we and the NYSE are
open for business. If we receive your request on one of those days, we will make
the transfer that day. Otherwise, we will make the transfer on the first
subsequent day on which we and the NYSE are open. Transfers pursuant to a Dollar
Cost Averaging or Asset Rebalancing program will be made at the intervals you
have selected in accordance with the procedures and requirements we establish.

You may make transfers from the Fixed Account to the Sub-Accounts only
during the 60 days after each Contract Anniversary. You must submit your request
no later than the end of this 60-day period. In addition, in each Contract Year,
the largest amount that you may transfer out of the Fixed Account is the greater
of: (a) the amount transferred in the prior Contract Year; (b) twenty percent of
the current Fixed Account balance; or (c) the entire balance if it is not more
than $250. The Contract permits us to defer transfers from the Fixed Account for
up to six months from the date you ask us.

We will not charge a transfer fee on a transfer of all of the Account Value
in the Sub-Accounts to the Fixed Account.

TRANSFERS AUTHORIZED BY TELEPHONE. You may make transfers by telephone,
unless you advise us in writing not to accept telephonic transfer instructions.
The cut off time for telephone transfer requests is 4:00 p.m. Eastern time.
Timely requests will be processed on that day at that day's price.

We use procedures that we believe provide reasonable assurances that
telephone authorized transfers are genuine. For example, we tape telephone
conversations with persons purporting to authorize transfers and request
identifying information. Accordingly, we disclaim any liability for losses
resulting from allegedly unauthorized telephone transfers. However, if we do not
take reasonable steps to help ensure that a telephone authorization is valid, we
may be liable for such losses. We may suspend, modify or terminate the telephone
transfer privilege at any time without notice.

DOLLAR COST AVERAGING. Under our automatic Dollar Cost Averaging program,
while the Contract is in force you may authorize us to transfer a fixed dollar
amount each month to the Sub-Accounts of your choice in accordance with the
procedures and requirements that we establish. The transfers will continue until
you instruct us to stop, or until your chosen source of transfer payments is
exhausted. We currently are waiving the contractual transfer fee on all
transfers, including Dollar Cost Averaging transfers. If we limit the number of
free transfers, however, transfers under the Dollar Cost Averaging Program will
count toward that limit. See "Transfer Fee" on page 44.

Your request to participate in this program will be effective when we
receive your completed application at our Service Center. Call or write us for a
copy of the application and additional information concerning the program. We
may change, terminate, limit or suspend Dollar Cost Averaging at any time.

The theory of dollar cost averaging is that by spreading your investment
over time, you may be able to reduce the effect of transitory market conditions
on your investment. In addition, because a given dollar amount will purchase
more units when the unit prices are relatively low rather than when the prices
are higher, in a fluctuating market, the average cost per unit may be less than
the average of the unit prices on the purchase dates. However, participation in
this program does not assure you of a greater profit from your purchases

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<PAGE>
under the program; nor will it prevent or necessarily reduce losses in a
declining market. Moreover, other investment programs may not work in concert
with Dollar Cost Averaging. Therefore, you should monitor your use of these
programs, as well as other transfers or withdrawals, while Dollar Cost Averaging
is being used. You may not participate in both the Dollar Cost Averaging and
Asset Rebalancing Programs at the same time.

ASSET REBALANCING. Asset Rebalancing allows you to readjust the percentage
of your Account Value allocated to each Sub-Account to maintain a pre-set level.
Over time, the variations in each Sub-Account's investment results will shift
the balance of your Account Value allocations. Under the Asset Rebalancing
feature, we periodically will transfer your Account Value, including new Net
Premium (unless you specify otherwise), back to the percentages you specify in
accordance with procedures and requirements that we establish. All of your
Account Value allocated to the Sub-Accounts must be included in an Asset
Rebalancing program. You may not include your Fixed Account balance in an Asset
Rebalancing program. We currently are waiving the contractual transfer fee on
all transfers, including Asset Rebalancing transfers. If we limit the number of
free transfers, however, transfers under an Asset Rebalancing program will count
toward that limit. See "Transfer Fee" at page 44.

You may request Asset Rebalancing when you apply for your Contract or by
submitting a completed written request to us at our Service Center. Please call
or write us for a copy of the request form and additional information concerning
Asset Rebalancing.

Asset Rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Account Value allocated to the better performing segments. Other investment
programs may not work in concert with Asset Rebalancing. Therefore, you should
monitor your use of these programs, as well as other transfers or withdrawals,
while Asset Rebalancing is being used. We may change, terminate, limit, or
suspend Asset Rebalancing at any time. You may not participate in both the
Dollar Cost Averaging and Asset Rebalancing Program at the same time.

ASSET ALLOCATION MODELS. Standard & Poor's Inc. ("S&P") has developed
several asset allocation models for use with the Contract. The purpose of these
models is to provide generalized guidance on how to allocate Account Value among
the Sub-Accounts in a manner that is consistent with various investment
objectives and risk tolerances. You may use a questionnaire and scoring system
developed by S&P in order to help you to determine which model might be
appropriate for you. Although we have arranged for the preparation of these
asset allocation models and related materials, it is up to you to decide whether
to use a model and, if so, which model to use. Moreover, the models are not
individualized investment advice. Accordingly, we recommend that you consult
your financial adviser before adopting a model.

If you decide to use a model, we will automatically allocate your Net
Premiums in accordance with the percentages specified in one of the S&P models.
You may only use one model at a time. We also will automatically enroll you in
our Asset Rebalancing Program and we will periodically rebalance your total
Sub-Account Values in accordance with your chosen model. If you wish to allocate
a portion of your Net Premiums or Account Value to the Fixed Account, you must
instruct us specifically, because none of the models includes the Fixed Account.

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<PAGE>
You may choose to use an S&P asset allocation model at any time. You also
may discontinue your use at any time. We will automatically discontinue your use
of a model if you (a) discontinue the Asset Rebalancing Program or (b) give us
instructions changing your allocations of Net Premiums or Account Value among
the Subaccounts. Call us at our Service Center or contact your sales
representative for additional information or forms.

For each model, S&P determines the percentage allocations among the
Sub-Accounts based upon a comparison of the model's investment objectives and
the relevant underlying Portfolios' investment objectives and portfolio
composition. These models are specific to this Contract. Similarly named models
developed for use with our other products may differ.

THE INVESTMENT AND FIXED ACCOUNT OPTIONS

VARIABLE ACCOUNT INVESTMENTS

PORTFOLIOS. Each of the Sub-Accounts invests in the shares of one of the
Portfolios. Each Portfolio is a separate investment series of an open-end
management investment company registered under the Investment Company Act of
1940 (the "1940 Act"). We briefly describe the Portfolios below. You should read
the current Prospectuses for the Portfolios for more detailed and complete
information concerning the Portfolios, their investment objectives and
strategies, and the investment risks associated with the Portfolios. If you do
not have a Prospectus for a Portfolio, contact us and we will send you a copy.

Each Portfolio holds its assets separate from the assets of the other
Portfolios, and each Portfolio has its own distinct investment objective and
policies. Each Portfolio operates as a separate investment fund, and the income,
gains, and losses of one Portfolio have no effect on the investment performance
of any other Portfolio.

The Portfolios which currently are the permissible investments of the
Variable Account under this Contract are separate series of AIM Variable
Insurance Funds, Inc. ("AIM Funds"), Liberty Variable Investment Trust ("Liberty
Trust"), MFS Variable Insurance Trust ("MFS Trust"), and Stein Roe Variable
Investment Trust ("Stein Roe Trust"), and separately incorporated mutual funds
and a single series of a mutual fund managed by The Dreyfus Corporation (the
"Dreyfus Portfolios"). The investment objectives of the Portfolios are briefly
described below.

PORTFOLIOS OF AIM FUNDS
AND VARIABLE ACCOUNT SUB-ACCOUNTS

AIM V.I. CAPITAL APPRECIATION. Capital appreciation through investments in
common stocks, with emphasis on medium-sized and smaller emerging growth
companies.

AIM V.I. GOVERNMENT SECURITIES. High level of current income consistent with
reasonable concern for safety of principal by investing in debt securities
issued, guaranteed or otherwise backed by the United States Government.

AIM V.I. INTERNATIONAL EQUITY. Long-term growth of capital by investing in
international equity securities, the issuers of which are considered by the
adviser to have strong earnings momentum.

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DREYFUS PORTFOLIOS AND
VARIABLE ACCOUNT SUB-ACCOUNTS

DREYFUS STOCK INDEX FUND (DREYFUS STOCK INDEX SUB-ACCOUNT). Investment
results that correspond to the price and yield performance of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index.(1)

DREYFUS VARIABLE INVESTMENT FUND, CAPITAL APPRECIATION PORTFOLIO (DREYFUS
CAPITAL APPRECIATION SUB-ACCOUNT). Long-term capital growth consistent with the
preservation of capital, with current income as a secondary objective, by
investing primarily in the common stocks of domestic and foreign issuers.

DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (DREYFUS SOCIALLY RESPONSIBLE
GROWTH SUB-ACCOUNT). Capital growth, with current income as a secondary goal, by
investing principally in common stocks, or securities convertible into common
stocks, of companies which, in the opinion of the Portfolio's management, not
only meet traditional investment standards, but also show evidence that they
conduct their business in a manner that contributes to the enhancement of the
quality of life in America.

PORTFOLIOS OF LIBERTY TRUST AND
VARIABLE ACCOUNT SUB-ACCOUNTS

COLONIAL SMALL CAP VALUE FUND (COLONIAL SMALL CAP VALUE SUB-ACCOUNT).
Long-term growth by investing primarily in smaller capitalization equity
securities.

COLONIAL HIGH YIELD SECURITIES FUND (COLONIAL HIGH YIELD SECURITIES
SUB-ACCOUNT). High current income and total return by investing primarily in
lower rated corporate debt securities. The Portfolio may invest up to 100% of
its assets in lower rated bonds (commonly referred to as "junk bonds") which are
regarded as speculative as to payment of principal and interest. Therefore, the
corresponding Sub-Account may not be suitable for all Contract Owners. You
should carefully assess the risks associated with the Portfolio before
investing.

COLONIAL STRATEGIC INCOME FUND (COLONIAL STRATEGIC INCOME SUB-ACCOUNT). A
high level of current income, as is consistent with prudent risk and maximizing
total return, by diversifying investments primarily in U.S. and foreign
government and lower rated corporate debt securities. The Portfolio may invest a
substantial portion of its assets in lower rated bonds (commonly referred to as
"junk bonds"). Therefore, the corresponding Sub-Account may not be suitable for
all Contract Owners. You should carefully assess the risks associated with the
Portfolio before investing.

COLONIAL GROWTH & INCOME FUND, FORMERLY KNOWN AS THE COLONIAL U.S. STOCK
FUND (COLONIAL U.S. STOCK SUB-ACCOUNT). Long-term growth and income, by
investing primarily in large capitalization stocks, with up to 10% of the
Portfolio's assets invested in debt securities.

LIBERTY ALL-STAR EQUITY FUND (LIBERTY ALL-STAR EQUITY SUB-ACCOUNT). Total
investment return, comprised of long-term capital appreciation and current
income, through investment primarily in a diversified portfolio of equity
securities.

(1) "Standard & Poor's 500", "S&P 500-Registered Trademark-", and "S&P" are
trademarks of the McGraw-Hill Companies Inc. and have been licensed for use
by the Portfolio. The Portfolio is not sponsored, endorsed, sold or promoted
by S&P or The McGraw-Hill Companies, Inc.

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<PAGE>
PORTFOLIOS OF MFS TRUST
AND VARIABLE ACCOUNT SUB-ACCOUNTS

MFS EMERGING GROWTH SERIES (MFS EMERGING GROWTH SUB-ACCOUNT). Long-term
growth of capital by investing primarily in common stocks of companies that the
adviser believes are early in their life cycle but have the potential to become
major enterprises.

MFS RESEARCH SERIES (MFS RESEARCH SUB-ACCOUNT). Long-term growth of capital
and future income by investing a substantial portion of the Portfolio's assets
in equity securities of companies believed to possess better than average
prospects for long-term growth. The Portfolio may invest up to twenty percent of
its assets in foreign securities that are not traded on a U.S. exchange.

MFS UTILITIES SERIES (MFS UTILITIES SUB-ACCOUNT). Capital growth and current
income, by investing, under normal circumstances, at least 65% (but up to 100%
at the discretion of the adviser) of its assets in equity and debt securities of
both domestic and foreign companies in the utilities industry.

MFS GROWTH WITH INCOME SERIES (MFS GROWTH WITH INCOME SUB-ACCOUNT).
Reasonable current income and long-term growth of capital and income by
investing, under normal market conditions, at least 65% of its assets in equity
securities of companies that are believed to have long-term prospects for growth
and income. This Portfolio may also invest up to 75% (and generally expects to
invest not more than fifteen percent) of its net assets in foreign securities
that are not traded on a U.S. exchange.

PORTFOLIOS OF STEIN ROE TRUST AND
VARIABLE ACCOUNT SUB-ACCOUNTS

STEIN ROE BALANCED FUND (STEIN ROE BALANCED SUB-ACCOUNT). High total
investment return through investment in a changing mix of securities.

STEIN ROE GROWTH STOCK FUND (STEIN ROE GROWTH STOCK SUB-ACCOUNT). Long-term
growth of capital through investment primarily in common stocks.

STEIN ROE MONEY MARKET FUND (STEIN ROE MONEY MARKET SUB-ACCOUNT). High
current income from short-term money market instruments while emphasizing
preservation of capital and maintaining excellent liquidity.

NOT ALL SUB-ACCOUNTS MAY BE AVAILABLE UNDER YOUR CONTRACT. You should
contact your representative for further information on the availability of the
Sub-Accounts.

AIM ADVISORS, INC. ("AIM") is the investment adviser to each Portfolio of
the AIM Funds. AIM has operated as an investment adviser since 1976.

LIBERTY ADVISORY SERVICES CORP. (FORMERLY KNOWN AS KEYPORT ADVISORY SERVICES
CORP.), an affiliate of Liberty Life, is the manager for Liberty Trust and its
Portfolios. Colonial Management Associates, Inc. ("Colonial"), an affiliate of
Liberty Life, serves as sub-adviser for the Portfolios (except for the Liberty
All-Star Equity Fund). Colonial has provided investment advisory services since
1931. Liberty Asset Management Company, an affiliate of Liberty Life,

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serves as sub-adviser for the Liberty All-Star Equity Fund and the current
portfolio managers are J.P. Morgan Investment Management Inc., Oppenheimer
Capital, Wilke/Thompson Capital Management Inc., Westwood Management Corp., and
Boston Partners Asset Management, L.P.

THE DREYFUS CORPORATION ("DREYFUS") serves as investment adviser for each of
the Dreyfus Portfolios. Dreyfus has operated as an investment adviser since
1947. Mellon Equity Associates, an affiliate of Dreyfus, serves as index fund
manager to the Dreyfus Stock Index Fund. Sarofim serves as sub-investment
adviser to the Dreyfus Capital Appreciation Fund. NCM Capital Management Group,
Inc. serves as sub-investment adviser to the Dreyfus Socially Responsible Growth
Fund, Inc.

MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS") is the investment adviser
to each Portfolio of the MFS Trust. MFS and its predecessor organizations have a
history of money management dating back to 1924 and the founding of the first
mutual fund in the United States.

STEIN ROE & FARNHAM INCORPORATED ("STEIN ROE") is the investment adviser for
each Portfolio of Stein Roe Trust. In 1986, Stein Roe was organized and
succeeded to the business of Stein Roe & Farnham, a partnership. Stein Roe is an
affiliate of Liberty Life. Stein Roe and its predecessor have provided
investment advisory and administrative services since 1932.

We do not promise that the Portfolios will meet their investment objectives.
Amounts you have allocated to Sub-Accounts may grow in value, decline in value,
or grow less than you expect, depending on the investment performance of the
Portfolios in which those Sub-Accounts invest. You bear the investment risk that
those Portfolios possibly will not meet their investment objectives. You should
carefully review the Portfolios' Prospectuses before allocating amounts to the
Sub-Accounts.

Each Portfolio is subject to certain investment restrictions and policies,
which may not be changed without the approval of a majority of the shareholders
of the Portfolio. See the accompanying Prospectuses of the Portfolios for
further information.

We automatically reinvest all dividends and capital gains distributions from
the Portfolios in shares of the distributing Portfolio at their net asset value.
The income and realized and unrealized gains or losses on the assets of each
Sub-Account are separate and are credited to or charged against the particular
Sub-Account without regard to income, gains or losses from any other Sub-Account
or from any other part of our business. We will use the Net Premiums you
allocate to a Sub-Account to purchase shares in the corresponding Portfolio and
will redeem shares in the Portfolios to meet Contract obligations or make
adjustments in reserves. The Portfolios are required to redeem their shares at
net asset value and to make payment within seven days.

Certain of the Portfolios sell their shares to separate accounts underlying
both variable life insurance and variable annuity contracts. It is conceivable
that in the future it may be unfavorable for variable life insurance separate
accounts and variable annuity separate accounts to invest in the same Portfolio.
Although neither we nor any of the Portfolios currently foresees any such
disadvantages either to variable life insurance or variable annuity contract
owners, each Portfolio's Board of Directors intends to monitor events in order
to identify any material conflicts between variable life and variable annuity
contract owners and

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<PAGE>
to determine what action, if any, should be taken in response thereto. If a
Board of Directors were to conclude that separate investment funds should be
established for variable life and variable annuity separate accounts, Contract
Owners will not bear the attendant expenses.

VOTING RIGHTS. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Sub-Account to which you have allocated
your Account Value. Under current interpretations, however, you are entitled to
give us instructions on how to vote those shares on certain matters. We will
notify you when your instructions are needed and will provide proxy materials or
other information to assist you in understanding the matter at issue. We will
determine the number of votes for which you may give voting instructions as of
the record date set by the relevant Portfolio for the shareholder meeting at
which the vote will occur.

As a general rule, you are the person entitled to give voting instructions.
However, if you assign your Contract, the assignee may be entitled to give
voting instructions. Retirement plans may have different rules for voting by
plan participants.

If you send us written voting instructions, we will follow your instructions
in voting the Portfolio shares attributable to your Contract. If you do not send
us written instructions, we will vote the shares attributable to your Contract
in the same proportions as we vote the shares for which we have received
instructions from other Contract Owners. We will vote shares that we hold in the
same proportions as we vote the shares for which we have received instructions
from other Contract Owners.

We may, when required by state insurance regulatory authorities, disregard
Contract Owner voting instructions if the instructions require that the shares
be voted so as to cause a change in the sub-classification or investment
objective of one or more of the Portfolios or to approve or disapprove an
investment advisory contract for one or more of the Portfolios.

In addition, we may disregard voting instructions in favor of changes
initiated by Contract Owners in the investment objectives or the investment
adviser of the Portfolios if we reasonably disapprove of the proposed change. We
would disapprove a proposed change only if the proposed change is contrary to
state law or prohibited by state regulatory authorities or we reasonably
conclude that the proposed change would not be consistent with the investment
objectives of the Portfolio or would result in the purchase of securities for
the Portfolio which vary from the general quality and nature of investments and
investment techniques utilized by the Portfolio. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report to you.

This description reflects our view of currently applicable law. If the law
changes or our interpretation of the law changes, we may decide that we are
permitted to vote the Portfolio shares without obtaining instructions from our
Contract Owners, and we may choose to do so.

ADDITIONS, DELETIONS, AND SUBSTITUTIONS OF SECURITIES. If the shares of any
of the Portfolios are no longer available for investment by the Variable Account
or if, in our judgment, further investment in the shares of a Portfolio is no
longer appropriate in view of the purposes of the Contract, we may add or
substitute shares of another Portfolio or mutual fund for Portfolio shares
already purchased or to be purchased in the future by Net Premiums under the
Contract. Any substitution will comply with the requirements of the 1940 Act.

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We also reserve the right to make the following changes in the operation of
the Variable Account and the Sub-Accounts:

(a) to operate the Variable Account in any form permitted by law;

(b) to take any action necessary to comply with applicable law or obtain and
continue any exemption from applicable laws;

(d) to add, combine, or remove Sub-Accounts in the Variable Account;

(e) to assess a charge for taxes attributable to the operation of the
Variable Account or for other taxes, as described in "Deductions and
Charges--Separate Account Expense Charge" on pages 39-40 below; and

(f) to change the way in which we assess other charges, as long as the
total other charges do not exceed the maximum guaranteed charges under
the Contracts.

If we take any of these actions, we will comply with the then applicable
legal requirements.

THE FIXED ACCOUNT.

THE PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE 1940 ACT. ACCORDINGLY, NEITHER THE
FIXED ACCOUNT NOR ANY INTERESTS IN THE FIXED ACCOUNT ARE SUBJECT TO THE
PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT, AND THE DISCLOSURE
REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE STAFF OF THE SECURITIES
AND EXCHANGE COMMISSION. THE STATEMENTS ABOUT THE FIXED ACCOUNT IN THIS
PROSPECTUS MAY BE SUBJECT TO GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL
SECURITIES LAWS REGARDING ACCURACY AND COMPLETENESS.

You may allocate part or all of your Net Premiums to the Fixed Account.
Under this option, we guarantee the principal amount allocated to the Fixed
Account and the rate of interest that will be credited to the Fixed Account, as
described below. From time to time we will set a current interest rate
applicable to Net Premiums and transfers allocated to the Fixed Account during a
Contract Year. We guarantee that the current rate in effect when a Net Premium
or transfer to the Fixed Account is made will apply to that amount until at
least the next Contract Anniversary. We may declare different rates for amounts
that are allocated to the Fixed Account at different times. We determine
interest rates in accordance with then-current market conditions and other
factors.

The effective interest rate credited at any time to your Contract's Fixed
Account is the weighted average of all of the interest rates for your Contract.
The rates of interest that we set will never be less than the minimum guaranteed
interest rate shown in your Contract. We may credit interest at a higher rate,
but we are not obligated to do so.

During the 60 days after each Contract Anniversary, you may transfer all or
part of your Fixed Account Balance to the Sub-Accounts, subject to the
requirements and limits described in "Transfer of Account Value" on page 21.

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<PAGE>
Amounts allocated to the Fixed Account become part of the general account of
Liberty Life. Liberty Life invests the assets of the general account in
accordance with applicable laws governing the investments of insurance company
general accounts.

We may delay payment of partial or full withdrawals from the Fixed Account
for up to 6 months from the date we receive your written withdrawal request. If
we defer payment for more than 30 days, we will pay interest (if required) on
the deferred amount at such rate as may be required by the applicable state or
jurisdiction.

CONTRACT BENEFITS AND RIGHTS

DEATH BENEFIT. While your Contract is in force, we will pay Death Proceeds
to the Beneficiary upon the death of the Insured. As described below in
"Proceeds Options", on pages 37-38, we will pay the Death Benefit proceeds in a
lump sum or under an optional payment plan.

The Death Benefit proceeds payable to the Beneficiary equal the applicable
Death Benefit, less any Indebtedness, and less any due and unpaid charges. The
proceeds may be increased, if you have added an Agreement that provides an
additional benefit. We will determine the amount of the Death Benefit proceeds
as of the date of the Insured's death. We will usually pay the Death Benefit
proceeds within seven days after we have received due proof of death and all
other requirements we deem necessary have been satisfied.

The amount of the Death Benefit will be based on the Death Benefit Option
you have selected, any increases or decreases in the Face Amount, and in some
instances your Account Value. If you withdraw part of your Account Value, we
will reduce the Death Benefit as described in this Prospectus on page 36.

DEATH BENEFIT OPTIONS. You may choose one of two Death Benefit options.
Under Option 1, the Death Benefit will be the greater of: (a) the then current
Face Amount of your Contract; or (b) the Account Value multiplied by the
applicable corridor percentage as described below. Under Option 2, the Death
Benefit will be the greater of: (a) the then current Face Amount of your
Contract plus the Account Value; or (b) the Account Value multiplied by the
applicable corridor percentage as described below. We set the corridor
percentages so as to seek to ensure that the Contracts will qualify for
favorable federal income tax treatment. The corridor percentages are stated in
the Contract. They vary according to the age of the Insured. Under this formula,
an increase in Account Value due to favorable investment experience may increase
the Death Benefit above the Face Amount, and a decrease in Account Value due to
unfavorable investment experience may decrease the Death Benefit (but not below
the Face Amount).

EXAMPLES:

<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
----------- -----------
<S> <C> <C>
Face Amount..................................................... $ 100,000 $ 100,000
Death Benefit Option 1
Insured's Age................................................... 60 60
Account Value on Date of Death.................................. $ 80,000 $ 50,000
Applicable Corridor Percentage.................................. 130% 130%
Death Benefit................................................... $ 104,000 $ 100,000
</TABLE>

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In Example A, the Death Benefit equals $104,000, i.e., the greater of
$100,000 (the Face Amount) and $104,000 (the Account Value at the Date of Death
of $80,000, multiplied by the corridor percentage of 130%). This amount, less
any Indebtedness and unpaid charges, constitutes the Death Benefit proceeds that
we would pay to the Beneficiary.

In Example B, the Death Benefit is $100,000, i.e., the greater of $100,000
(the Face Amount) or $65,000 (the Account Value of $50,000 multiplied by the
corridor percentage of 130%).

Option 1 is designed to provide a specific amount of Death Benefit that does
not vary with changes in the Account Value. Therefore, under Option 1, as your
Account Value increases, the net amount at risk under your Contract will
decrease. Under Option 2, on the other hand, the amount of the Death Benefit
generally increases to reflect increases in the Account Value. Therefore, if you
select Option 2, your Contract generally will involve a constant net amount at
risk. Since the cost of insurance charge on your Contract is based upon the net
amount at risk, the cost of insurance charge will generally be less under a
Contract with an Option 1 Death Benefit than under a similar Contract with an
Option 2 Death Benefit. As a result, if the Sub-Accounts you select experience
favorable investment results, your Account Value will tend to increase faster
under Option 1 than under Option 2, but the total Death Benefit under Option 2
will increase or decrease directly with changes in Account Value. Thus, you may
prefer Option 1 if you are more interested in the possibility of increasing your
Account Value based upon favorable investment experience, while you may prefer
Option 2 if you are seeking to increase total Death Benefits.

After the first Contract Year, once each Contract Year you may change the
Death Benefit option by writing to us at our Service Center. If you ask to
change from Option 2 to Option 1, we will increase the Face Amount of your
Contract to equal the Option 2 Death Benefit as of the effective date of the
change. If you ask to change from Option 1 to Option 2, we will change the Face
Amount of your Contract to equal the Option 1 Death Benefit less the Account
Value as of the effective date of the change. The change will take effect on the
Monthly Date on or immediately following the date we approve your request. If
you change your Contract's Death Benefit Option, your Contract's Guaranteed
Coverage Monthly Premium amounts will change prospectively from the date of the
change.

We may require you to provide evidence of insurability for a change in Death
Benefit option. We will not permit you to change the Death Benefit option under
your Contract if afterward the Face Amount remaining in force would be less than
$50,000.

DEATH BENEFIT AT ATTAINED AGE 100. If the Insured is living and your
Contract is in effect on the first Contract Anniversary after the Insured's
100th birthday, we will make the following changes in your Contract:

-- If Lifetime Guaranteed Coverage is in effect, the Death Benefit will
equal the greater of the Face Amount of your Contract or 101% of the
Account Value of your Contract. Otherwise, the Death Benefit will equal
101% of the Account Value of your Contract;

-- You may not pay additional Premiums; and

-- We no longer will charge the cost of insurance charge as part of your
Monthly Deductions.

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CHANGE IN THE FACE AMOUNT. While the Contract is in force, you may change
the Face Amount after the first Contract Year. Write or call our Service Center
to obtain the necessary form. The change will take effect when we approve your
request.

If you request a decrease in Face Amount, we will first apply it to coverage
provided by the most recent increase in Face Amount, then to the next most
recent increase successively and finally to the Face Amount under the original
application. We will not permit a decrease in the Face Amount of your Contract
if afterward the Face Amount remaining in force would be less than $50,000.

We will charge a portion of the Withdrawal Charge on any decrease in Face
Amount that you request. The amount of the Withdrawal Charge will equal the then
applicable Withdrawal Charge on a total surrender of your Contract, multiplied
by the percentage decrease in the Face Amount. We will deduct this charge from
your Account Value, allocating it among the Sub-Accounts and the Fixed Account
in proportion to your Account Value in each option.

If a request for a Face Amount decrease would cause your Contract to fail to
qualify for treatment as a life insurance contract under the Tax Code, we may
decline your request. In the alternative, we may give you the option of
withdrawing sufficient Account Value from your Contract to enable it to continue
to be treated as a life insurance contract for tax purposes after the requested
Face Amount decrease. We will not charge a separate Withdrawal Charge on any
amount withdrawn in connection with a Face Amount decrease.

To apply for an increase in the Face Amount, you must submit to us a
supplemental application, accompanied by satisfactory evidence of insurability.
We will not permit any increase in Face Amount after the Insured's 80th
birthday. The minimum amount of a Face Amount increase is $25,000. You may not
increase the Face Amount of your Contract more often than once every twelve
months.

You should be aware that an increase in the Face Amount of your Contract
will affect the cost of insurance charges applicable to your Contract. We will
deduct a larger amount of cost of insurance charges, because an increase in the
Face Amount also will increase the net amount at risk under your Contract. We
will not approve a request for a Face Amount increase if the Surrender Value is
too small to pay the Monthly Deduction for the Contract month following the
increase. As described in "Withdrawal Charge" on pages 41-42, your maximum
withdrawal charge will also increase. Increases in the Face Amount of your
Contract will increase the Guaranteed Coverage Monthly Premium amount. Likewise,
decreases in the Face Amount of your Contract will decrease the Guaranteed
Coverage Monthly Premium amount.

OPTIONAL INSURANCE BENEFITS. You may ask to add one or more Agreements to
your Contract to provide additional optional insurance benefits. We may require
evidence of insurability before we issue an Agreement to you. We will deduct the
cost of any Agreements as part of the Monthly Deduction. Addition of an optional
insurance benefit may also increase your Guaranteed Coverage Monthly Premium
amount. The Agreements we currently offer are described below. For more
information concerning what options we may offer, please ask your sales
representative or contact us at 800-xxx-xxxx. In our discretion we may offer
Agreements or stop offering an Agreement at any time.

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Not all of these Agreements may be available in your state, and the terms of
these benefits may differ in some states. In addition, if your Contract was
issued in connection with a Qualified Plan, we may not be able to offer you some
of the benefits provided by these Agreements. Contact us for more information.

ACCELERATED DEATH BENEFIT AGREEMENT. You may elect to add an Accelerated
Death Benefit Agreement to your Contract. If such Agreement has been attached,
you may request payment of a portion of the Death Benefit as an Accelerated
Death Benefit if either: (1) the Insured has a Terminal Condition; or (2) the
Insured is Chronically Ill, as these terms are defined in the Contract. You
generally may request an Accelerated Death Benefit equal to up to the lesser of
90% of the Death Benefit (before subtracting any indebtedness) or $250,000. We
will reduce the amount you request by a discount for the early payment, a $100
processing fee, and the repayment of a pro rata portion of your indebtedness.
You may choose for the Accelerated Death Benefit to be paid in a lump sum or in
installments, as described in the Contract.

If you request an Accelerated Death Benefit, the balance of the Death
Benefit (net of the amount previously requested) is payable upon the Insured's
death. You may request an Accelerated Death Benefit only once.

If your request for an Accelerated Death Benefit is based on the Insured's
being Chronically Ill, in some circumstances a portion of your Accelerated Death
Benefit may not qualify for exemption from federal income tax. Accordingly, you
should consult your tax adviser before requesting an Accelerated Death Benefit.
For more information, see "Accelerated Death Benefit", on page 49.

WAIVER OF SPECIFIED MONTHLY PREMIUM. Under this Agreement, we will
contribute a specified monthly amount to the Account Value while the Insured is
disabled as defined in the Agreement. You cannot add both the Waiver of
Specified Monthly Premium and the Waiver of Monthly Deduction Agreement to your
Contract.

WAIVER OF MONTHLY DEDUCTION. Under this Agreement, we will waive the Monthly
Deduction while the Insured is disabled as defined in the Agreement. You cannot
add both the Waiver of Specified Monthly Premium and the Waiver of Monthly
Deduction Agreement to your Contract.

CHILDREN'S PROTECTION BENEFIT. Under this Agreement we will pay a Death
Benefit to the Beneficiary if one of the Insured's children dies before the
child's 25th birthday while the Agreement is in force. If the Insured dies while
this Agreement is in force, the benefit becomes fully paid up. Until the child's
25th birthday, you may convert the Agreement for a new Contract on the child's
life, subject to certain conditions as defined in the Agreement. We will not
require evidence of insurability to convert the Agreement.

ACCIDENTAL DEATH AND DISMEMBERMENT. Under this Agreement, we will pay a
benefit if the Insured dies from accidental bodily injury or suffers a bodily
injury as specified in the Agreement.

PRIMARY INSURED TERM INSURANCE. This Agreement provides additional term life
insurance coverage on the primary Insured. Until the primary Insured reaches age
75, you may exchange this Agreement for a new contract or an increase in the
Face Amount of your Contract without evidence of insurability. In addition, if
you convert this Agreement on or

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after its first anniversary, but no later than its fourth anniversary, we will
contribute a conversion credit toward the premium for the new contract. We will
not require evidence of insurability to exchange or convert the Agreement. The
addition of a Term Insurance Agreement does not affect the withdrawal charge on
your Contract. As a result, if you provide a portion of your insurance coverage
through a Term Insurance Rider instead of through increasing the Face Amount of
your Contract, your withdrawal charge will be lower. However, under some
combinations of coverage, your cost of insurance charges may be higher.

ADDITIONAL INSURED TERM INSURANCE. This Agreement provides life insurance
coverage on an additional Insured. We will pay the Face Amount of the Agreement
to the named Beneficiary when we receive due proof that the additional Insured
died while the Agreement was in force. Until the additional Insured's 75th
birthday, you may exchange the Agreement for a new Contract on the additional
Insured's life, subject to certain conditions as defined in the Agreement. In
addition, if you convert this Agreement on or after its first anniversary, but
no later than its fourth anniversary, we will contribute a conversion credit
toward the premium for the new contract. We will not require evidence of
insurability to exchange or convert the Agreement.

CONTRACT LOANS. While the Contract is in force, you may borrow money from us
using the Contract as the only security for your loan. Loans have priority over
the claims of any assignee or any other person. You may borrow up to 90% of the
Cash Value of your Contract as of the end of the Valuation Period in which we
receive your loan request. Any outstanding indebtedness will count against that
limit. Thus, for example, if the Cash Value of your Contract was $10,000 and you
already had $5,000 in Indebtedness outstanding, you could borrow an additional
$4,000 ($10,000 X 90% - $5,000). The minimum loan amount is $250. In addition,
if you have named an irrevocable Beneficiary, you must also obtain his or her
written consent before we make a Contract Loan to you.

The interest rate on all Contract Loans is the Loan Interest Rate shown in
your Contract. Interest on Contract Loans accrues daily and is due on each
Contract Anniversary. If you do not pay the interest on a Contract Loan when
due, the unpaid interest will become part of the Contract Loan and will accrue
interest at the same rate.

When we make a Contract Loan to you, we will transfer to the Loan Account a
portion of the Account Value equal to the loan amount. We will take the
transfers pro rata from the Fixed Account and the Sub-Accounts, unless you
instruct us otherwise in writing. You may not transfer more than a pro rata
share from the Fixed Account.

We will credit interest to the portion of the Loan Account attributable to
"Preferred Loans", as defined below, at the Loan Interest Rate shown in your
Contract. We will treat as a Preferred Loan the portion of your loan equal in
amount to (a) your Account Value, minus (b) your total Payments, minus (c) your
current preferred loan balance, minus (d) any interest that has accrued on your
Indebtedness since the previous Contract Anniversary, plus (e) all prior partial
withdrawals In excess of earnings. We will credit interest to the remainder of
the Loan Account at the minimum guaranteed interest rate shown in your Contract.
On each Contract Anniversary, we will also transfer to the Loan Account an
amount of Account Value equal to the amount by which the Indebtedness exceeds
the value of the Loan Account.

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<PAGE>

If you have any unpaid Indebtedness and your Surrender Value is insufficient
to pay a Monthly Deduction when due, your Contract will enter the Grace Period
and may terminate, as explained in the section entitled "Termination and Grace
Period," on page 38. If your Contract lapses while a Contract Loan is
outstanding and your Contract is not a MEC, you may owe taxes or suffer other
adverse tax consequences. See "Federal Tax Considerations-- Contracts Which Are
Not MECs" on page 50 below. Please consult a tax adviser for details.

If you have an outstanding Contract Loan, decreases in your Account Value,
including decreases due to negative investment results in the Sub-Accounts you
have chosen, could cause your Contract to enter the Grace Period and lapse. If
you have an outstanding Contract Loan and do not pay loan interest when due,
unpaid interest will be added to your Contract Loan and will bear interest at
the same rate. If your investment gains are insufficient, your outstanding
Contract Loan could exceed your Surrender Value, resulting in your Contract
entering the Grace Period.

You may repay all or any part of any Contract Loan without penalty at any
time while the Contract is still in effect and the Insured is living. If you
have a Contract Loan outstanding, we will treat any unscheduled Premium we
receive from you as a loan repayment, unless you instruct us otherwise in
writing. We will deduct an amount equal to your loan repayment from the Loan
Account and allocate your Net Premium among the Sub-Accounts and the Fixed
Account on the same basis as Planned Premium are allocated, unless you instruct
us otherwise.

A Contract Loan, whether or not repaid, will have a permanent effect on your
Account Value because the investment results of each Sub-Account and the
interest paid on the Fixed Account will apply only to the amounts remaining in
those accounts. The longer a loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the Sub-Accounts
and/or Fixed Account earn more than the annual interest rate for amounts held in
the Loan Account, your Account Value will not increase as rapidly as it would if
you had not taken a Contract Loan. If the Sub-Accounts and/or Fixed Account earn
less than that rate, then your Account Value will be greater than it would have
been if you had not taken a Contract Loan. Also, if you do not repay a Contract
Loan, your Indebtedness will be subtracted from the Death Benefit and Surrender
Value otherwise payable.

You may realize taxable income when you take a Contract Loan. In some
instances, a Contract is treated as a "modified endowment contract" for federal
tax purposes. In that situation, Contract Loans are treated as withdrawals for
tax purposes, and the amount of the loan may be treated as taxable income to
you. In addition, you may also incur an additional ten percent penalty tax. You
should also be aware that interest on Contract Loans is generally not
deductible. See "Federal Tax Considerations--Contracts Which Are MECs" on page
49 below. Accordingly, before you take a Contract Loan, you should consult your
tax adviser and carefully consider the potential impact of a Contract Loan on
your rights and benefits under the Contract.

AMOUNT PAYABLE ON SURRENDER OF THE CONTRACT. While your Contract is in
force, you may fully surrender your Contract. Upon surrender, we will pay you
the Surrender Value determined as of the day we receive your written request at
our Service Center. Your Contract

35
<PAGE>
will terminate on the day we receive your written request. We may require that
you give us your Contract document before we pay you the Surrender Value. Before
we pay a full surrender, you must provide us with tax withholding information.

The Surrender Value equals the Account Value, minus any applicable
withdrawal charge, minus any Indebtedness. We will determine the Surrender Value
as of the end of the Valuation Period during which we received your request for
surrender. We generally will pay you the Surrender Value of the Contract within
seven days of our receiving your complete written request or on the effective
surrender date you have requested, whichever is later. The determination of the
withdrawal charge is described on pages 41-42.

You may receive the Surrender Value in a lump sum or under any of the
proceeds options described in "Proceeds Options" on pages 37-38.

The tax consequences of surrendering the Contract are discussed in "Federal
Tax Considerations," beginning on page 46.

PARTIAL WITHDRAWALS. Beginning in the second Contract Year, you may receive
a portion of the Surrender Value by making a partial withdrawal from your
Contract. You must request the partial withdrawal in writing. Your request will
be effective on the date we receive it at our Service Center. Before we pay any
partial withdrawal, you must provide us with tax withholding information.

When you request a partial withdrawal, we will pay you the amount requested
and subtract the amount requested plus any applicable withdrawal charge and
withdrawal fee from your Account Value. We may waive the withdrawal charge on
some or all of your withdrawals. The determination of the withdrawal charge is
described on pages 41-42.

You may specify how much of your partial withdrawal you wish to be taken
from each Sub-Account. The amount requested from a specific Sub-Account may not
exceed the value of that option less any applicable withdrawal charge and
withdrawal fee. If you do not specify the option from which you wish to take
your partial withdrawal, we will take it pro rata from the Sub-Accounts and the
Fixed Account.

During the first Contract Year, you may not make partial withdrawals. After
the first Contract Year, you may take partial withdrawals as often as you
choose. You may not, however, withdraw less than $250 at one time. In addition,
we may refuse to permit any partial withdrawal that would leave less than $250
in a Sub-Account from which the withdrawal was taken unless the entire
Sub-Account balance is withdrawn. If a partial withdrawal plus any applicable
withdrawal charge would reduce the Account Value to less than $500, we may treat
your request as a request to withdraw the total Account Value and terminate your
Contract. We may waive or change these limits.

If you have selected Death Benefit Option 1, a partial withdrawal will
reduce the Face Amount of your Contract as well as the Account Value. We will
reduce the Face Amount by the amount of the partial withdrawal and any charges
associated with it. The withdrawal charge on the partial surrender will equal
the then current withdrawal charge on a full surrender multiplied by the
percentage decrease in the Face Amount resulting from the partial withdrawal.
The Face Amount after a partial withdrawal may not be less than $50,000. If you
have previously increased the Face Amount of your Contract, your partial
withdrawals will first

36
<PAGE>

reduce the Face Amount of the most recent increase, then the next most recent
increases successively, then the Face Amount of the original Contract. We will
notify you of any change in the Face Amount in our next quarterly or annual
report to you.

Under Option 2, a reduction in Account Value as a result of a partial
withdrawal will typically result in a dollar for dollar reduction in the life
insurance proceeds payable under the Contract. It will not, however, affect the
Face Amount. Accordingly, we will not charge a Withdrawal Charge on a partial
withdrawal from a Contract under Option 2.

The tax consequences of partial withdrawals are discussed in "Federal Tax
Considerations" beginning on page 46.

PROCEEDS OPTIONS. We will pay the Surrender Value or Death Benefit proceeds
under the Contract in a lump sum or under one of the proceeds options that we
then offer. The amount applied to a proceeds option must be at least $2,000 of
Account Value and result in installment payments of not less than $20. Unless we
consent in writing, the proceeds options described below are not available if
the payee is an assignee, administrator, executor, trustee, association,
partnership, or corporation. We will not permit surrenders or partial
withdrawals after payments under a proceeds option involving life contingencies,
such as Option 4 below, commence. We will transfer to our general account any
amount placed under a proceeds option and it will not be affected by the
investment performance of the Variable Account.

You may request a proceeds option by writing to us at our Service Center
before the death of the Insured. If you change the Beneficiary, the existing
choice of proceeds option will become invalid and you may either notify us that
you wish to continue the pre-existing choice of proceeds option or select a new
one.

The following proceeds options are available under the Contract:

OPTION 1 -- INTEREST. We will pay interest monthly on proceeds left with us.
We will credit interest to unpaid balances at a rate that we will declare
annually. We will never declare an effective annual rate of less than 3 1/2%.

OPTION 2 -- FIXED AMOUNT. We will pay equal monthly installments until the
proceeds are exhausted. We will credit interest to unpaid balances at a rate
that we will declare annually. We will never declare an effective annual rate of
less than 3 1/2%.

OPTION 3 -- FIXED PERIOD. We will pay monthly installments for a period
selected by you of not more than 25 years.

OPTION 4 -- LIFE INCOME, WITH OR WITHOUT A GUARANTEE PERIOD. We will pay
proceeds in periodic payments to the payee for as long as the payee is alive. If
no Guarantee Period is selected, payments will stop when the payee dies. It is
possible for the payee to receive only one payment, if the payee dies before the
second payment is due. If a Guarantee Period is selected and the payee dies
before the end of the Guarantee Period, we will continue payments to a named
beneficiary until the end of the Guarantee Period. We offer Guarantee Periods of
ten years, fifteen years or twenty years. We base the payments on the 1983
Individual Annuity Mortality Table, adjusted to include ten years of mortality
improvement under Projection Scale G.

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<PAGE>
LIBERTY SECURITY ACCOUNT-REGISTERED TRADEMARK-. We will credit interest to
proceeds left with us in the Liberty Security Account-Registered Trademark-. We
will credit interest to your Liberty Security Account-Registered Trademark-
balance at a rate we declare. We periodically may change that rate, but it will
never be less than 3.0% annually. The beneficiary will be able to write checks
against such account at any time and in any amount up to the total in the
account. The checks must be for a minimum amount of $250.

When we begin to make payments under Options 3 and 4, we will tell you the
amount of your installment payment. Your installment payment will never be less
than the amounts determined using the tables in the Contract. It may be higher.

In addition, we may agree to other proceeds option plans. Write or call us
to obtain information about them.

TERMINATION AND GRACE PERIOD. The Contract will terminate and life insurance
coverage will end when one of the following events first occurs:

(a) you surrender your Contract;

(b) the Grace Period ends; or

Your Contract will enter the Grace Period if on a Monthly Date the Surrender
Value is insufficient to pay the Monthly Deduction and either (a) no Coverage
Guarantee is in effect or (b) at least one of the Coverage Guarantees is in
effect, but you have outstanding Indebtedness under your Contract. You will be
given a 61-day Grace Period in which to pay an amount sufficient to keep the
Contract in force after the end of the Grace Period.

At least 61 days before the end of the Grace Period, we will send you and
any assignee a notice telling you that you must pay at least the amount shown in
the notice by the end of the Grace Period to prevent your Contract from
terminating. The amount shown in the notice will be determined as provided in
the Contract. You may pay a larger amount if you wish. If you do not pay us the
amount shown in the notice before the end of the Grace Period, your Contract
will end at the end of the Grace Period.

The Contract will continue in effect through the Grace Period. If the
Insured dies during the Grace Period, we will pay a Death Benefit in accordance
with your instructions. However, we will reduce the proceeds by an amount equal
to the Monthly Deductions due and unpaid. See "Death Benefit," on page 30.

As described in "Guaranteed Coverage Monthly Premium" on page 18, your
Contract has a Three-year Guaranteed Coverage Period, a Limited Guaranteed
Coverage Period and a Lifetime Guaranteed Coverage Period, provided that you pay
sufficient Premiums. Under each Coverage Guarantee, if you do not have any
outstanding Indebtedness and you have paid sufficient Premiums, your Contract
will not lapse during the applicable Guaranteed Coverage Period.

REINSTATEMENT. If the Contract lapses during the life of the Insured, you
may apply for reinstatement of the Contract by paying us the reinstatement
Premium. You must request reinstatement within five years from the end of the
Grace Period while the Insured is living. The reinstatement Premium is equal to
an amount sufficient to cover three months of monthly deductions following the
date of reinstatement. If you choose, you may pay a larger amount.

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<PAGE>
If Indebtedness was outstanding at the time of lapse, you must either repay or
reinstate the loan before we will reinstate your Contract. In addition, you must
provide evidence of insurability satisfactory to us. The Account Value on the
reinstatement date will reflect the Account Value at the time of termination of
the Contract plus the Premium paid at the time of reinstatement. All Contract
charges will continue to be based on your original Contract Date.

CANCELLATION. In many states, you may cancel your Contract by returning it
to us within ten days after you receive it. In some states, however, this right
to return period may be longer, as provided by state law. If you return your
Contract, the Contract terminates and, in most states, we will pay you an amount
equal to your Payment. We will pay the refund within seven days of receiving
your request. No withdrawal charge is imposed upon return of a Contract within
the right to return period. This right to return may vary in certain states in
order to comply with the requirements of state insurance laws and regulations.
Accordingly, you should refer to your Contract for specific information about
your circumstances.

POSTPONEMENT OF PAYMENTS. We may defer for up to fifteen days the payment of
any amount attributable to a Premium paid by check to allow the check a
reasonable time to clear. We ordinarily will pay any amount attributable to the
Account Value allocated to the Variable Account within seven days, except:

(1) whenever the New York Stock Exchange ("NYSE") is closed (other than
customary weekend and holiday closings);

(2) when trading on the NYSE is restricted or an emergency exists, as
determined by the SEC, so that disposal of the Variable Account's
investments or determination of the value of its net assets is not
reasonable practicable; or

(3) at any other time permitted by the SEC for your protection.

In addition, we may delay payment of Account Value in the Fixed Account for
up to six months or a shorter period if required by law. If we defer payment for
more than 30 days we will pay interest (if required) on the deferred amount at
such rate as may be required by the applicable state or jurisdiction.

DEDUCTIONS AND CHARGES

We assess charges and deductions under the Contracts against the
Sub-Accounts and the Account Value. Additional deductions and expenses are paid
out of the Portfolios' assets, as described in the Prospectuses of the
Portfolios.

PREMIUM EXPENSE CHARGE. We charge a premium expense charge on each Premium
paid. The current premium expense charge is 5.5% of the total Premiums paid in
each Contract Year up to twelve times the Lifetime Guaranteed Coverage Monthly
Premium and 3.5% of any Premium in excess of that amount. Twelve times the
Guaranteed Coverage Monthly Premium equals the guideline level premium
determined under Section 7702(c) of the Tax Code. We may change the premium
expense charge, but it will never exceed 5.5% of each Premium.

The premium expense charge is intended to cover a portion of our state
premium tax expenses, certain federal tax liabilities resulting from the receipt
of Premiums, and a portion of our distribution expenses. State premium tax rates
vary from 0% to 4.0%. We do not vary the

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<PAGE>

premium expense charge to reflect the actual premium tax rate in individual
states, or the absence of premium tax in certain states. Accordingly, the
portion of this charge attributable to state premium taxes may be more or less
than the premium taxes assessed in your state.

SEPARATE ACCOUNT EXPENSE CHARGE. On each Valuation Day, we will take a
deduction from the Sub-Accounts to compensate Liberty Life for its expenses
incurred in connection with this Contract. The separate account expense charge
will be calculated at an annual rate equivalent to .60% of average daily net
assets of each Sub-Account, as described in the table of Contract Charges and
Deductions on pages 3-4. The amount deducted will be determined on each
Valuation Day.

The separate account expense charge is intended to cover all expenses under
the Contract other than distribution expenses, and the cost of insurance charges
and the other expenses covered by the monthly deduction and premium expense
charge, which are charged for separately and described below. Accordingly, the
separate account expense charge is intended to compensate us for incurring the
following expenses and assuming certain risks under the Contracts:

-- mortality and expense risk;

-- certain federal taxes and other expenses associated with the receipt of
Premiums; and

-- a portion of our administrative expenses, such as salaries, postage,
telephone, office equipment and periodic reports.

The mortality risk assumed in relation to the Contract includes the risk
that the cost of insurance charges specified in the Contract will be
insufficient to meet claims and the risks under the Guaranteed Death Benefit. We
also assume a risk that, on the Monthly Date preceding the death of an Insured,
the Death Benefit will exceed the amount on which the cost of insurance charges
were based. The expense risk assumed is that expenses incurred in issuing and
administering the Contracts will exceed the administrative charges set in the
Contract.

We currently are not maintaining a provision for taxes attributable to the
operations of the Variable Account (as opposed to the federal tax related to the
receipt of Premiums under the Contracts). In the future, however, we may make
such a charge. Charges for other taxes, if any, attributable to the Variable
Account or to this class of Contracts may also be made.

MONTHLY DEDUCTION. Each month on the Monthly Date we will take a Monthly
Deduction from your Account Value. The Monthly Deduction will consist of a cost
of insurance charge, a contract fee, and any charges for optional benefit
Agreements. We deduct the Monthly Deduction pro rata from your interests in the
Sub-Accounts and your Fixed Account balance.

COST OF INSURANCE CHARGE. The cost of insurance charge is intended to pay
for the cost of providing life insurance coverage for the Insured. We guarantee
that this charge will not exceed the maximum cost of insurance charge determined
on the basis of the rates shown in the mortality table guaranteed in the
Contract.

The current monthly cost of insurance charge is equal to the current cost of
insurance rate times the net amount at risk. The net amount at risk is (a) minus
(b) where:

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(a) is the Death Benefit on the first day of the Contract Month divided by
the sum of one plus the Guaranteed Monthly Equivalent Interest Rate shown
in your Contract; and

(b) is the Account Value on that day before the deduction of the Monthly
Deduction.

Rates may differ based on the age, sex, rating class and history of tobacco
use of the Insured. Your guaranteed cost of insurance rates are set forth in the
mortality tables in your Contract. Because the net amount for which we are at
risk under your Contract may vary monthly, your cost of insurance charge is
likely to differ each month. If the Insured is still living and your Contract is
in effect on the first Contract Anniversary after the Insured's 100th birthday,
we will discontinue charging you a cost of insurance charge.

We determine the cost of insurance charge separately for the initial Face
Amount and each subsequent increase. The current cost of insurance charge covers
our anticipated mortality costs for standard and substandard risks. We determine
the current cost of insurance rates based on our expectations as to our future
mortality experience and other factors. We guarantee, however, that we will
never charge you a cost of insurance charge higher than the amount determined
using the maximum guaranteed cost of insurance rates shown in the Contract. We
base our cost of insurance rates on the sex, issue age, Contract Year, rating
class, and history of tobacco use of the Insured. However, we issue unisex
Contracts in Montana. Our cost of insurance rates are based on the 1980
Commissioners Standard Ordinary ("1980 CSO") Mortality Table based on the
Insured's sex, age last birthday, and history of tobacco use. Our cost of
insurance rates for unisex Contracts will never exceed a maximum based on the
1980 CSO Mortality Table B assuming a blend of 80% male and 20% female lives.

CONTRACT FEE. We charge a contract fee of $9.00 per month if your Contract's
Face Amount is less than $100,000. We charge a contract fee of $6.00 per month
if your Contract's Face Amount is $100,000 or greater. The contract fee is
intended to compensate us for administrative expenses such as salaries, postage,
telephone, office equipment and periodic reports.

PORTFOLIO EXPENSES. You indirectly bear the charges and expenses of the
Portfolios whose shares are held by the Sub-Accounts to which you allocate your
Account Value. The Variable Account purchases shares of the Portfolios at net
asset value. Each Portfolio's net asset value reflects investment advisory fees
and administrative expenses already deducted from the Portfolio's assets. For a
summary of current estimates of these charges and expenses, see pages 13-14. For
more information concerning the investment advisory fees and other charges
against the Portfolios, see the Prospectuses and the statements of additional
information for the Portfolios, which are available upon request.

We may receive compensation from the investment advisers or administrators
of the Portfolios. Such compensation will be consistent with the services we
provide or the cost savings resulting from the arrangement and therefore may
differ between Portfolios.

WITHDRAWAL CHARGE. In general. If you surrender your Contract, take a
partial withdrawal, or decrease your Contract's Face Amount, you may pay a
withdrawal charge. The withdrawal charge on surrender equals the amount shown in
the withdrawal charge table in your Contract, plus any additional withdrawal
charge due to increases in the Face Amount of your Contract. The amount of the
withdrawal charge decreases over time. The withdrawal charge

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<PAGE>

on a partial withdrawal on a decrease in Face Amount is an amount in proportion
to the percentage decrease in Face Amount. The withdrawal charge is explained in
more detail below. For additional information concerning the rates applicable to
you, please consult your sales representative. In addition, a table of the
applicable rates is on file with the SEC as an exhibit to the registration
statement for this product.

The withdrawal charge and the premium expense charge are imposed to cover
our actual distribution and premium tax expenses, which include agents' sales
commissions and other sales and distribution expenses. We expect to recover
total sales expenses and premium tax expenses of the Contracts over the life of
the Contracts. However, to the extent distribution costs and premium taxes are
not recovered by the withdrawal charge or the premium expense charge, we may
make up any shortfall from the assets of our general account, which includes
funds derived from the daily deductions charged to the Sub-Accounts and other
fees and charges under the Contracts.

INITIAL WITHDRAWAL CHARGE. When we issue your Contract, we determine the
initial withdrawal charge. To determine the initial amount of the withdrawal
charge, we multiply the initial Face Amount of your Contract by the applicable
rate per thousand dollars of Face Amount. The applicable rate depends on the
Insured's issue age, sex and underwriting class. For example, if the Insured is
age 45 when your Contract is issued, the applicable rates per thousand are as
follows:

<TABLE>
<S> <C>
Male Non-Smoker $ 13.68
Male Smoker $ 21.96
Female Non-Smoker $ 9.72
Female Smoker $ 13.32
Unisex Non-Smoker $ 12.84
Unisex Smoker $ 20.16
</TABLE>

Accordingly, if the Insured were a male non-smoker age 45 and the Contract's
Face Amount were $100,000, the withdrawal charge initially would be $1,368. The
rates for each category are greater or lesser according to the age of the
Insured when your Contract is issued. The maximum rates for each category is
$50.00 per $1,000 of Face Amount.

WITHDRAWAL CHARGE ON SURRENDER. If you surrender your Contract after ten
Contract Years have elapsed, we will not charge a withdrawal charge (unless you
have increased the Face Amount of your Contract, as explained below). Before
that time, we determine the applicable withdrawal charge by multiplying the
initial withdrawal charge on your Contract by the appropriate withdrawal charge
percentage for the Contract Year in which the surrender occurs. Those
percentages are:

<TABLE>
<CAPTION>
% OF
INITIAL % OF INITIAL
CONTRACT WITHDRAWAL CONTRACT WITHDRAWAL
YEAR CHARGE YEAR CHARGE
- --------- ----------- ------------- -------------
<S> <C> <C> <C>
1 100% 6 70%
2 100% 7 60%
3 100% 8 50%
4 90% 9 40%
5 80% 10 20%
</TABLE>

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<PAGE>

WITHDRAWAL CHARGE ON PARTIAL WITHDRAWAL. We also charge a withdrawal charge
on a partial withdrawal from your Contract. The applicable withdrawal charge
will be a pro rata share of the then current withdrawal charge on a complete
surrender, based on the percentage decrease in Face Amount resulting from the
partial withdrawal.

If you choose Death Benefit Option 1, a partial withdrawal decreases the
Face Amount on a dollar-for-dollar basis. Accordingly, the percentage used to
calculate the Withdrawal Charge equals the sum of the partial withdrawal plus
the Withdrawal Charge divided by the Face Amount prior to the withdrawal.

If you choose Death Benefit Option 2, a partial withdrawal does not affect
the Face Amount. Accordingly, there is no Withdrawal Charge on partial
withdrawals from Contracts under Option 2.

WITHDRAWAL CHARGE ON DECREASES IN INITIAL FACE AMOUNT. If you request a
decrease in the Face Amount of your Contract, we will charge you a Withdrawal
Charge. The amount of the charge will equal the then applicable Withdrawal
Charge on a full surrender multiplied by the percentage decrease in your
Contract's Face Amount (I.E., the amount of the decrease divided by the Face
Amount before the decrease). We will deduct the Withdrawal Charge pro rata from
your Account Value in each Sub-Account and the Fixed Account. If you need to
take a partial withdrawal in connection with a Face Amount decrease in order for
your Contract to continue to be treated as a life insurance contract under the
Tax Code, we will not charge any additional Withdrawal Charge with respect to
the amount required to be withdrawn.

WITHDRAWAL CHARGE ON INCREASES IN INITIAL FACE AMOUNT. If you increase the
Face Amount of your Contract, we will determine an additional withdrawal charge
applicable to the amount of the increase. We calculate the additional withdrawal
charge using the same procedures described above, except that we use the
Insured's age and underwriting class at the time of the increase, rather than at
the time your Contract was issued. If you surrender your Contract, make a
partial withdrawal, or decrease the Face Amount of your Contract after an
increase in Face Amount, we separately calculate the withdrawal charge
applicable to the initial Face Amount and each increase and add those amounts to
determine the total Withdrawal Charge.

Each Face Amount increase also has a withdrawal charge associated with it.
It reduces at the same rate as the initial withdrawal charge shown above.

MEDICAL WAIVER OF WITHDRAWAL CHARGE. After the first Contract Year, we will
waive the withdrawal charge on all withdrawals under your Contract if on at
least 45 days of any continuous 60 day period beginning after the first Contract
Year any Insured or his or her spouse has a Qualifying Medical Stay, as defined
in the Contract. To obtain this waiver, you must apply in writing within 180
days of your initial eligibility. You may not claim this benefit if the medical
treatment is provided by a resident of your household or a member of your
immediate family. Additional restrictions may apply if the Insured's spouse had
a Qualifying Medical Stay within 45 days before the Contract Date. We may
require you to provide us with written proof of your eligibility. This waiver is
described in more detail in the Contract. This provision may vary in some states
and is discussed in more detail in the Contract.

WITHDRAWAL FEE. In addition to a withdrawal charge, we charge a withdrawal
fee on any partial withdrawal after the first in any Contract Year. The
withdrawal fee will equal the lesser

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<PAGE>
of $25 or two percent of the amount of the partial withdrawal. The withdrawal
fee does not apply to full surrenders. The withdrawal fee is intended to
compensate us for our administrative costs in effecting a partial withdrawal.

TRANSFER FEE. The Contract permits us to charge a maximum transfer fee of
$25 per transfer on each transfer after the first twelve transfers in any
Contract Year, including transfers under our Dollar Cost Averaging and Asset
Rebalancing Programs. We currently are waiving the transfer fee on all
transfers. We may impose a limit on the number of free transfers, or change that
number, at any time. If we limit the number of free transfers, we will notify
you of any reduction in the number of free transfers at least 90 days in advance
of the effective date of the change, and the change will not be effective until
your next Contract Anniversary.

We will deduct the transfer fee from the Account Value remaining in the
Sub-Account or the Fixed Account from which the transfer was made. If that
amount is insufficient to pay the transfer fee, we will subtract it from the
transferred amount.

SPECIAL PROVISIONS FOR GROUP OR SPONSORED ARRANGEMENTS. Where permitted by
state insurance laws, Contracts may be purchased under group or sponsored
arrangements. We may reduce or waive the charges and deductions described above
for Contracts issued under these arrangements. Among other things, we may waive
withdrawal charges and deductions to employees, officers, directors, agents, and
immediate family members of the foregoing. We will reduce these charges and
deductions in accordance with our rules in effect when we approve the
application for a Contract. To qualify for a reduction, a group or sponsored
arrangement must satisfy our criteria as to, for example, the size of the group,
the expected number of participants and anticipated Premiums from the group.
Generally, the sales contacts and effort, administrative costs and mortality
cost per Contract vary based on such factors as the size of the group or
sponsored arrangements, the purposes for which Contracts are purchased and
certain characteristics of the group's members. The amount of reduction and the
criteria for qualification will reflect the reduced sales effort and
administrative costs resulting from, and the different mortality experience
expected as a result of, sales to qualifying groups and sponsored arrangements.

From time to time, we may modify on a uniform basis both the amounts of
reductions and the criteria for qualification. Reductions in these charges will
not be unfairly discriminatory against any person, including the affected
Contract Owners and all other owners of all other contracts funded by the
Variable Account.

GENERAL CONTRACT PROVISIONS

STATEMENTS TO CONTRACT OWNERS. We will maintain all records relating to the
Variable Account and the Sub-Accounts. Each year we will send you a report
showing information concerning your Contract transactions in the past year and
the current status of your Contract. The report will include information such as
the Account Value as of the end of the current and the prior year, the current
Death Benefit, Surrender Value, Indebtedness, partial withdrawals, earnings,
Payments paid, and deductions made since the last annual report. We will also
include any information required by state law or regulation. If you ask us, we
will send you an additional report at any time. We may charge you up to $25 for
this additional report. We will tell you the current charge before we send you
the report.

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In addition, we will send you the financial statements of the Portfolios and
other reports as specified in the 1940 Act. We also will mail you confirmation
notices or other appropriate notices of Contract transactions quarterly or more
frequently within the time periods specified by law. Please give us prompt
written notice of any address change. Please read your statements and
confirmations carefully and verify their accuracy and contact us promptly with
any question.

LIMIT ON RIGHT TO CONTEST. In the absence of fraud, we may not contest the
insurance coverage under the Contract after the Contract has been in force for
two years after the Contract Date while the Insured is alive or for two years
after any increase in the Face Amount. The two-year incontestability period may
vary in certain states to comply with the requirements of state insurance laws
and regulations.

In issuing a Contract, we rely on your application. Your statements in that
application and any supplemental applications, in the absence of fraud, are
considered representations and not warranties. In the absence of fraud, we will
not use any statement made in connection with the Contract application to void
the Contract or to deny a claim, unless that statement is a part of the
application or an amendment thereto.

SUICIDE. If the Insured commits suicide while sane or kills him- or herself
while insane within two years of the Contract Date, we are not required to pay
the full Death Benefit that would otherwise be payable. Instead, we will pay you
an amount equal to the Account Value less any Indebtedness, or the minimum
amount required by the state in which your Contract was issued, and the Contract
will end. Likewise, if the Insured dies by suicide while sane or kills him- or
herself while insane within two years after the effective date of any increase
in the Face Amount, the amount we will pay you with respect to that increase
will be limited to the Monthly Deductions taken in connection with that
increase.

MISSTATEMENT AS TO AGE AND SEX. If the age or sex of the Insured is
incorrectly stated in the application, we will adjust any proceeds appropriately
as specified in the Contract.

BENEFICIARY. You name the original Beneficiary(ies) and Contingent
Beneficiary(ies) in the application for the Contract. You may change the
Beneficiary or Contingent Beneficiary at any time while the Insured is alive,
except irrevocable Beneficiaries and irrevocable Contingent Beneficiaries may
not be changed without their consent.

You must request a change of Beneficiary in writing. We will provide a form
to be signed and filed with us. Your request for a change in Beneficiary or
Contingent Beneficiary will take effect as of the date you signed the form after
we acknowledge receipt in writing. Until we acknowledge receipt of your change
instructions, we are entitled to rely on your most recent instructions in our
files. Accordingly, we are not liable for making a payment to the person shown
in our files as the Beneficiary or treating that person in any other respect as
the Beneficiary, even if instructions that we subsequently receive from you seek
to change your Beneficiaries effective as of a date before we made the payment
or took the action in question.

If you name more than one Beneficiary, we will divide the Death Benefit
among your Beneficiaries according to your most recent written instructions. If
you have not given us written instructions, we will pay the Death Benefit in
equal shares to the Beneficiaries. If one of the Beneficiaries dies before you,
we will divide the Death Benefit among the surviving

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Beneficiaries. If no Beneficiary is living, the Contingent Beneficiary will be
the Beneficiary. The interest of any revocable Beneficiary is subject to the
interest of any assignee. If no Beneficiary or Contingent Beneficiary is living,
the Beneficiary is the Contract Owner or the Contract Owner's estate.

ASSIGNMENT. While the Insured is alive, you may assign your Contract as
collateral security. You must notify us in writing if you assign the Contract.
Until we receive notice from you, we are not liable for any action we may take
or payments we may make that may be contrary to the terms of your assignment. We
are not responsible for the validity of an assignment. Your rights and the
rights of the Beneficiary may be affected by an assignment. An assignment may
result in income tax and a ten percent penalty tax. You should consult your tax
adviser before assigning your Contract.

CREDITORS' CLAIMS. To the extent permitted by law, no benefits payable under
this Contract will be subject to the claims of your or the Beneficiary's
creditors.

DIVIDENDS. We will not pay any dividend under the Contract.

NOTICE AND ELECTIONS. To be effective, all notices and elections under the
Contract must be in writing, signed by you, and received by us at our Service
Center. Certain exceptions may apply. Unless otherwise provided in the Contract,
all notices, requests and elections will be effective when received at our
Service Center complete with all necessary information.

MODIFICATION. We reserve the right to modify the Contract without your
express consent, in the circumstances described in this Prospectus or as
necessary to conform to applicable law or regulation or any ruling issued by a
governmental agency. The provisions of the Contract will be construed so as to
comply with the requirements of Section 7702 of the Tax Code.

FEDERAL TAX CONSIDERATIONS

NOTE: THE FOLLOWING DISCUSSION IS BASED UPON OUR UNDERSTANDING OF CURRENT
FEDERAL INCOME TAX LAW APPLICABLE TO LIFE INSURANCE CONTRACTS IN GENERAL. WE
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN THOSE LAWS WILL BE MADE.
ALSO, WE DO NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS. YOU BEAR THE COMPLETE
RISK THAT THE CONTRACTS MAY NOT BE TREATED AS "LIFE INSURANCE CONTRACTS" UNDER
FEDERAL INCOME TAX LAWS.

In addition, this discussion does not include a detailed description of the
federal income tax consequences of the purchase of these Contracts or any
discussion of special tax rules that may apply to certain purchase situations.
We also have not tried to consider any other possibly applicable state or other
tax laws, for example, the estate tax consequences of the Contracts. You should
seek tax advice concerning the effect on your personal tax liability of the
transactions permitted under the Contract, as well as any other questions you
may have concerning the tax status of the Contract or the possibility of changes
in the tax law.

TAXATION OF LIBERTY LIFE AND THE VARIABLE ACCOUNT. Liberty Life is taxed as
a life insurance company under Part I of Subchapter L of the Tax Code. The
operations of the Variable Account are taxed as part of the operations of
Liberty Life. Investment income and realized capital gains are not taxed to the
extent that they are applied under the Contracts.

Accordingly, we do not anticipate that Liberty Life will incur any federal
income tax liability attributable to the operation of the Variable Account (as
opposed to the federal tax

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related to the receipt of Payments under the Contracts). Therefore, we are not
making any charge or provision for federal income taxes. However, if the tax
treatment of the Variable Account is changed, we may charge the Variable Account
for its share of the resulting federal income tax.

In several states we may incur state and local taxes on the operations of
the Variable Account. We currently are not making any charge or provision for
them against the Variable Account. We do, however, use part of the Withdrawal
Charge to offset these taxes. If these taxes should be increased, we may make a
charge or provision for them against the Sub-Accounts. If we do so, the results
of the Sub-Accounts will be reduced.

TAX STATUS OF THE CONTRACT. The Contract is structured to satisfy the
definition of a life insurance contract under the Tax Code. As a result, the
Death Benefit ordinarily will be fully excluded from the gross income of the
Beneficiary. The Death Benefit will be included in your gross estate for federal
estate tax purposes if the proceeds are payable to your estate. The Death
Benefit will also be included in your estate, if the Beneficiary is not your
estate but you retained incidents of ownership in the Contract. Examples of
incidents of ownership include the right to change Beneficiaries, to assign the
Contract or revoke an assignment, and to pledge the Contract or obtain a
Contract Loan. If you own and are the Insured under a Contract and if you
transfer all incidents of ownership in the Contract more than three years before
your death, the Death Benefit will not be included in your gross estate. State
and local estate and inheritance tax consequences may also apply.

In addition, certain transfers of the Contract or Death Benefit, either
during life or at death, to individuals (or trusts for the benefit of
individuals) two or more generations below that of the transferor may be subject
to the federal generation-skipping transfer tax.

In the absence of final regulations or other pertinent interpretations of
the Tax Code, some uncertainty exists as to whether a substandard risk Contract
will meet the statutory definition of a life insurance contract. If a Contract
were deemed not to be a life insurance contract for tax purposes, it would not
provide most of the tax advantages usually provided by a life insurance
contract. We reserve the right to amend the Contracts to comply with any future
changes in the Tax Code, any regulations or rulings under the Tax Code and any
other requirements imposed by the Internal Revenue Service ("IRS").

In addition, you may use the Contract in various arrangements, including
non-qualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a Contract in any arrangement the value of which
depends in part on its tax consequences, you should be sure to consult a
qualified tax adviser regarding the tax treatment of the proposed arrangement.

DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Tax Code requires that
the underlying assets of variable life insurance contracts be diversified. The
Tax Code provides that a variable life insurance contract will not be treated as
a life insurance contract for federal income tax purposes for any period and any
subsequent period for which the investments are

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not adequately diversified. If the Contract were disqualified for this reason,
you would lose the tax deferral advantages of the Contract and would be subject
to current federal income taxes on all earnings allocable to the Contract.

The Tax Code provides that variable life insurance contracts such as the
Contract meet the diversification requirements if, as of the close of each
quarter, the underlying assets meet the diversification standards for a
regulated investment company, and no more than 55% of the total assets consist
of cash, cash items, U.S. Government securities and securities of other
regulated investment companies. For purposes of determining whether or not the
diversification standards of Section 817(h) of the Tax Code have been met, each
United States government agency or instrumentality is treated as a separate
issuer.

The United States Treasury Department (the "Treasury Department") also has
issued regulations that establish diversification requirements for the
segregated asset accounts underlying variable contracts such as the Contracts.
These regulations amplify the diversification requirements set forth in the Tax
Code and provide an alternative to the provision described above. Under these
regulations, a segregated asset account will be deemed adequately diversified
if: (1) no more than 55% of the value of the total assets of the account is
represented by any one investment; (2) no more than 70% of the value of the
total assets of the account is represented by any two investments; (3) no more
than 80% of the value of the total assets of the account is represented by any
three investments; and (4) no more than 90% of the value of the total assets of
the account is represented by any four investments.

These diversification standards are applied to each Sub-Account of the
Variable Account by looking to the investments of the Portfolio underlying the
Sub-Account. One of our criteria in selecting the Portfolios is that their
investment managers intend to manage them in compliance with these
diversification requirements.

OWNER CONTROL. In certain circumstances, variable life insurance contract
owners will be considered the owners, for tax purposes, of separate account
assets underlying their contracts. In those circumstances, the contract owners
could be subject to taxation on the income and gains from the separate account
assets.

In published rulings, the Internal Revenue Service has stated that a
variable insurance contract owner will be considered the owner of separate
account assets, if the owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. When the
diversification regulations were issued, the Treasury Department announced that
in the future, it would provide guidance on the extent to which variable
contract owners could direct their investments among Sub-Accounts without being
treated as owners of the underlying assets of the Variable Account. As of the
date of this Prospectus, no such guidance has been issued. We cannot predict
when or whether the Treasury Department will issue that guidance or what
position the Treasury Department will take. In addition, although regulations
are generally issued with prospective effect, it is possible that regulations
may be issued with retroactive effect.

The ownership rights under the Contract are similar in many respects to
those described in IRS rulings in which the contract owners were not deemed to
own the separate account assets. In some respects, however, they differ. For
example, under the Contract you have many more investment options to choose from
than were available under the contracts

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involved in the published rulings, and you may be able to transfer Account Value
among the investment options more frequently than in the published rulings.
Because of these differences, it is possible that you could be treated as the
owner, for tax purposes, of the Portfolio shares underlying your Contract and
therefore subject to taxation on the income and gains on those shares. Moreover,
it is possible that the Treasury Department's position, when announced, may
adversely affect the tax treatment of existing Contracts. We therefore reserve
the right to modify the Contract as necessary to attempt to prevent you from
being considered the owner for tax purposes of the underlying assets.

The remainder of this discussion assumes that the Contract will be treated
as a life insurance contract for federal tax purposes.

TAX TREATMENT OF LIFE INSURANCE DEATH BENEFIT PROCEEDS. In general, the
amount of the Death Benefit payable under a Contract is excludable from gross
income under the Tax Code. Certain transfers of the Contract, however, may
result in a portion of the Death Benefit being taxable.

If the Death Benefit is not received in a lump sum and is, instead, applied
under one of the proceeds options, payments generally will be prorated between
amounts attributable to the Death Benefit, which will be excludable from the
Beneficiary's income, and amounts attributable to interest (accruing after the
Insured's death), which will be includable in the Beneficiary's income.

ACCELERATED DEATH BENEFIT. In general, the tax treatment of an Accelerated
Death Benefit is the same as the tax treatment of Death Benefits, as described
above. However, where an Accelerated Death Benefit is based on the Insured's
being "Chronically Ill", the Tax Code limits the amount of the Accelerated Death
Benefit that will qualify for exclusion from federal income taxation. In some
circumstances, an Accelerated Death Benefit under the Contract may exceed these
limits, and the excess amount therefore may be taxable. Accordingly, if you are
considering requesting an Accelerated Death Benefit, you should first consult a
qualified tax adviser.

TAX DEFERRAL DURING ACCUMULATION PERIOD. Under existing provisions of the
Tax Code, except as described below, any increase in your Account Value is
generally not taxable to you unless you receive or are deemed to receive amounts
from the Contract before the Insured dies. If you surrender your Contract, the
Cash Value (less any Contract Fee paid upon surrender) will be includable in
your income to the extent the amount received exceeds the "investment in the
contract." The "investment in the contract" generally is the total Premiums and
other consideration paid for the Contract, less the aggregate amount received
under the Contract previously to the extent such amounts received were
excludable from gross income. Whether partial withdrawals (or other amounts
deemed to be distributed) from the Contract constitute income depends, in part,
upon whether the Contract is considered a "modified endowment contract" ("MEC")
for federal income tax purposes.

CONTRACTS WHICH ARE MECs

CHARACTERIZATION OF A CONTRACT AS A MEC. In general, this Contract will not
constitute a MEC, unless: (1) it was received in exchange for another life
insurance contract which was a MEC; (2) excess Premiums are paid into the
Contract, causing it to fail the "7-pay" test under

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Section 7702A of the Tax Code, or (3) there is a decrease in the Face Amount or
an Agreement is removed, such that the Contract no longer complies with the
"7-pay" test under Section 7702A of the Tax Code. Other "material" changes to
your Contract may also cause it to be treated as a MEC.

TAX TREATMENT OF WITHDRAWALS, LOANS, ASSIGNMENTS AND PLEDGES UNDER MECS. If
your Contract is a MEC, withdrawals from your Contract will be treated first as
withdrawals of income and then as a recovery of your investment in the Contract.
Thus, you may realize taxable income upon a withdrawal if the Account Value
exceeds the investment in the Contract. You may also realize taxable income when
you take a Contract Loan, because any loan (including unpaid loan interest)
under the Contract will be treated as a withdrawal for tax purposes. In
addition, if you assign or pledge any portion of the value of your Contract (or
agree to assign or pledge any portion), the assigned or pledged portion of your
Account Value will be treated as a withdrawal for tax purposes. Before
assigning, pledging, or requesting a loan under a Contract that is a MEC, you
should consult a qualified tax adviser.

PENALTY TAX. Generally, withdrawals (or the amount of any deemed
withdrawals) from a MEC are subject to a penalty tax equal to ten percent of the
portion of the withdrawal that is includable in income, unless the withdrawals
are made: (1) after you reach age 59 1/2, (2) because you have become disabled
(as defined in the Tax Code), or (3) as substantially equal periodic payments
over your life or life expectancy (or the joint lives or life expectancies of
you and your beneficiary, as defined in the Tax Code). Certain other exceptions
to the ten-percent penalty tax may apply.

AGGREGATION OF CONTRACTS. All life insurance contracts which are MECs and
which are purchased by the same person from us or any of our affiliates within
the same calendar year will be aggregated and treated as one contract for
purposes of determining the amount of a withdrawal (including a deemed
withdrawal) that is includable in taxable income.

CONTRACTS WHICH ARE NOT MECs

TAX TREATMENT OF WITHDRAWALS GENERALLY. If your Contract is not a MEC, the
amount of any withdrawal from the Contract will be treated first as a
non-taxable recovery of premiums and then as income from the Contract. Thus,
only the portion of a withdrawal that exceeds the investment in the Contract
immediately before the withdrawal will be includable in taxable income.

CERTAIN DISTRIBUTIONS REQUIRED BY THE TAX LAW IN THE FIRST 15 CONTRACT
YEARS. Where cash distributions are required under the Tax Code in connection
with a reduction in benefits during the first 15 years after the Contract is
issued (or if withdrawals are made in anticipation of a reduction in benefits,
within the meaning of the Tax Code, during this period), some or all of such
amounts may be includable in taxable income.

TAX TREATMENT OF LOANS. If your Contract is not a MEC, a loan received under
the Contract generally will be treated as indebtedness for tax purposes, rather
than a withdrawal of Account Value. As a result, you will not realize taxable
income on any part of the loan as long as the Contract remains in force. If you
surrender your Contract or your Contract lapses, however, any outstanding loan
balance will be treated as an amount received by you as part of the Surrender
Value. Accordingly, you may be subject to taxation on the loan amount at

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that time. Moreover, if any portion of your Contract Loan is a preferred loan, a
portion of your Contract Loan may be includable in your taxable income.
Generally, you may not deduct interest paid on loans under the Contract, even if
you use the loan proceeds in your trade or business.

ACTIONS TO ENSURE COMPLIANCE WITH THE TAX LAW. We believe that the maximum
amount of Premiums we intend to permit for the Contracts will comply with the
Tax Code definition of a life insurance contract. We will monitor the amount of
your Premiums, and, if your total Premiums during a Contract Year exceed those
permitted by the Tax Code, we will refund the excess Premiums within 60 days of
the end of the Contract Year and will pay interest and other earnings (which
will be includable in taxable income) as required by law on the amount refunded.
We reserve the right to increase the Death Benefit (which may result in larger
charges under a Contract) or to take any other action deemed necessary to ensure
the compliance of the Contract with the federal tax definition of a life
insurance contract.

FEDERAL INCOME TAX WITHHOLDING. We will withhold and remit to the federal
government a part of the taxable portion of withdrawals made under a Contract,
unless the Owner notifies us in writing at or before the time of the withdrawal
that he or she chooses not to have withholding. As a Contract Owner, you will be
responsible for the payment of any taxes and early distribution penalties that
may be due on the amounts received under the Contract, whether or not you choose
withholding. You may also be required to pay penalties under the estimated tax
rules, if your withholding and estimated tax payments are insufficient to
satisfy your total tax liability.

TAX ADVICE. This summary is not a complete discussion of the tax treatment
of the Contract. You should seek tax advice from an attorney who specializes in
tax issues.

DESCRIPTION OF LIBERTY LIFE AND THE VARIABLE ACCOUNT

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON. Liberty Life Assurance Company of
Boston was incorporated on September 17, 1963 as a stock life insurance company.
Its executive and administrative offices are located at 175 Berkeley Street,
Boston, Massachusetts 02117.

Liberty Life writes individual life insurance on both a participating and a
non-participating basis and group life and disability insurance and individual
and group annuity contracts on a non-participating basis. The variable life
insurance contracts described in this Prospectus are issued on a
non-participating basis. Liberty Life is licensed to do business in all states,
in the District of Columbia, and in Canada. We intend to market the Contracts
everywhere in the United States we conduct life insurance business. Liberty Life
has been rated "A" by A.M. Best and Company, independent analysts of the
insurance industry. The Best's A rating is in the second highest rating
category, which also includes a lower rating of A-. Best's Ratings merely
reflect Best's opinion as to the relative financial strength of Liberty Life and
Liberty Life's ability to meet its contractual obligations to its Contract
holders. The ratings are not intended to reflect the financial strength or
investment experience of the Variable Account. We may from time to time
advertise these ratings in our sales literature.

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Liberty Life is a member of the Insurance Marketplace Standards Association
("IMSA"). Accordingly, we may use the IMSA logo and membership in IMSA in
advertisements. Being a member means that Liberty Life has chosen to participate
in IMSA's Life Insurance Ethical Market Conduct Program.

Liberty Life is an indirect wholly-owned subsidiary of Liberty Mutual
Insurance Company ("Liberty Mutual") and Liberty Mutual Fire Insurance Company.
Liberty Mutual is a multi-line insurance and financial services institution.

Pursuant to a Guarantee Agreement dated February 3, 1998, Liberty Mutual,
our ultimate parent, unconditionally guarantees to us on behalf of and for the
benefit of Liberty Life and owners of life insurance contracts and annuity
contracts issued by Liberty Life that it will, on demand, make funds available
to us for the timely payment of contractual obligations under any insurance
policy or annuity contract issued by us. Liberty Mutual may terminate this
guarantee on notice to Liberty Life.

Liberty Life also acts as a sponsor for two other of its separate accounts
that are registered investment companies: Variable Account J and Variable
Account K. The officers and employees of Liberty Life are covered by a fidelity
bond in the amount of $70,000,000.

OFFICERS AND DIRECTORS OF LIBERTY LIFE. Our directors and officers are
listed below, together with information as to their dates of election and
principal business occupations during the past five years (if other than their
present occupation). Where no dates are given, the person has held that position
for at least the past five years.

GARY L. COUNTRYMAN; Chairman of the Board, June 1998 to date; Chief
Executive Officer and Chairman of the Board, March 1987 to June 1998; Director,
March 1981; Chairman of the Board, Liberty Mutual Insurance Company, April 1998
to date; Chairman of the Board and Chief Executive Officer, Liberty Mutual
Insurance Company, April 1992 to April 1998.

EDMUND F. KELLY; President and Chief Executive Officer, June 1998 to date;
President and Chief Administrative Officer, June 1995 to June 1998; Director,
July 1992 to date; President and Chief Executive Officer, Liberty Mutual
Insurance Company, April 1998 to date; President and Chief Operating Officer,
Liberty Mutual Insurance Company, April 1992 to April 1998.

MORTON E. SPITZER; Executive Vice President, Chief Operating Officer
Individual, July 1992 to date; Director, August 1995 to date.

JEAN M. SCARROW; Executive Vice President, Chief Operating Officer--Group,
and Director, May 1997 to date; Senior Vice President, Liberty Mutual Insurance
Company, May 1997 to date; Vice President, Liberty Mutual Insurance Company,
April 1995 to May 1997; employee of Liberty Mutual Insurance Company since June
1985.

A. ALEXANDER FONTANES; Vice President, March 1992 to date; Director, August
1995 to date; Senior Vice President and Chief Investment Officer, Liberty Mutual
Insurance Company.

JOHN B. CONNERS; Director, August 1995 to date; Executive Vice President and
Manager-- Personal Market, Liberty Mutual Insurance Company.

J. PAUL CONDRIN, III; Vice President and Director, April 1997 to date;
Senior Vice President and Chief Financial Officer, Liberty Mutual Insurance
Company.

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CHRISTOPHER C. MANSFIELD; Director, August 1995 to date; Senior Vice
President and General Counsel, Liberty Mutual Insurance Company.

ELIZABETH C. COSGROVE; Vice President, May 1999 to date; Marketing Manager,
May 1994 to May 1999.

ANNE G. DELANEY; Vice President--Administration--Individual Life Operations,
July 1999 to date; Senior Vice President--Administration, GE Financial
Assurance, 1991-1999.

ANDREW M. GIRDWOOD, JR.; Vice President, March 1984 to date.

RICHARD W. HADLEY; Vice President, and Comptroller, June 1993 to date.

RICHARD B. LASSOW; Vice President, September 1994 to date; Chief
Actuary--Individual Life, Connecticut Mutual Life Insurance Company, September
1989 to June 1994.

WILLIAM J. O'CONNELL; Vice President and Assistant General Counsel, November
1998 to date

JOHN S. O'DONNELL; Vice President, April 1991 to date.

STEVEN M. SENTLER; Vice President, September 1994 to date; Second Vice
President, Travelers Insurance Company, December 1978 to November 1993.

JOHN A. TYMOCHKO; Vice President, March 1993 to date.

BARRY S. GILVAR; Secretary, August 1995 to date; Assistant Secretary, March
1993 to August 1995; Vice President and Secretary, Liberty Mutual Insurance
Company.

ELLIOT J. WILLIAMS; Treasurer, April 1997 to date; Vice President and
Treasurer, Liberty Mutual Insurance Company.

GERALD H. DOLAN; Assistant Treasurer, June 1996 to date; Assistant
Controller and Manager--Corporate Tax, Liberty Mutual Insurance Company, January
1999 to date; Assistant Controller and Director--Corporate Tax, Liberty Mutual
Insurance Company, prior to January 1999.

BERNARD GILLEN; Assistant Treasurer, June 1996 to date; Director--Tax
Compliance, Liberty Mutual Insurance Company.

JAMES W. JAKOBEK; Assistant Treasurer, September 1990 to date; Vice
President and Manager, Liberty Mutual Insurance Company.

CHARLENE ALBANESE; Assistant Secretary, December 1997 to date;
Manager--Individual Life Policy Services, Liberty Mutual Insurance Company,
August 1998 to date; Assistant Manager-- Individual Life Policy Services,
Liberty Mutual Insurance Company, July 1997 to August 1998; Manager--Individual
Life Policy Services, Liberty Mutual Insurance Company, April 1991 to July 1997.

DIANE S. BAINTON; Assistant Secretary, November 1995 to date; Assistant
Secretary, Liberty Mutual Insurance Company.

KATHERINE DESIDERIO; Assistant Secretary, November 1995 to date; Hearing
Representative, Liberty Mutual Insurance Company.

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JAMES R. PUGH; Assistant Secretary, November 1995 to date; Senior Corporate
Counsel, Liberty Mutual Insurance Company.

HARVEY SWEDLOVE; Assistant Secretary, February 1997 to date; Vice President
and General Counsel, Liberty Canada Holdings, Ltd., January 1996 to date;
Consultant, Maris Management, Ltd., June 1994 to December 1995; Vice President
and General Counsel, Camrost Development Corporation, August 1987 to June 1994.

The business address of each of the foregoing officers and directors is 175
Berkeley Street, Boston, Massachusetts 02117.

FINANCIAL INFORMATION CONCERNING LIBERTY LIFE. You should consider the
financial statements for Liberty Life that are attached to the end of this
Prospectus only as bearing on the Company's ability to meet its obligations
under the Contract. They do not relate to the investment performance of the
assets held in the Variable Account.

VARIABLE ACCOUNT. LLAC Variable Account was originally established on July
10, 1998, as a segregated asset account of Liberty Life, under the laws of the
Commonwealth of Massachusetts. The Variable Account meets the definition of a
"separate account" under the federal securities laws and is registered with the
SEC as a unit investment trust under the 1940 Act. The SEC does not supervise
the management of the Variable Account or Liberty Life.

We own the assets of the Variable Account, but we hold them separate from
our other assets. To the extent that these assets are attributable to the
Account Value of the Contracts offered by this Prospectus, these assets are not
chargeable with liabilities arising out of any other business we may conduct.
Income, gains, and losses, whether or not realized, from assets allocated to the
Variable Account are credited to or charged against the Variable Account without
regard to our other income, gains, or losses. Our obligations arising under the
Contracts are general corporate obligations of Liberty Life.

The Variable Account is divided into Sub-Accounts. The assets of each
Sub-Account are invested in the shares of one of the Portfolios. We do not
guarantee the investment performance of the Variable Account, its Sub-Accounts
or the Portfolios. Values allocated to the Variable Account will rise and fall
with the values of shares of the Portfolios and are also reduced by Contract
charges. In the future, we may use the Variable Account to fund other variable
universal life insurance contracts. We will account separately for each type of
variable life insurance contract funded by the Variable Account.

SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS. We hold the assets of the
Variable Account. We keep those assets physically segregated and held separate
and apart from our general account assets. We maintain records of all purchases
and redemptions of shares of the Portfolios.

STATE REGULATION OF LIBERTY LIFE. We are subject to the laws of
Massachusetts and regulated by the Massachusetts Division of Insurance. Every
year we file an annual statement with the Division of Insurance covering our
operations for the previous year and our financial condition as of the end of
the year. We are inspected periodically by the Division of Insurance to verify
our contract liabilities and reserves. We also are examined periodically by the

54
<PAGE>
National Association of Insurance Commissioners. Our books and records are
subject to review by the Division of Insurance at all times. We are also subject
to regulation under the insurance laws of every jurisdiction in which we
operate.

YEAR 2000 MATTERS

We have been addressing Year 2000 matters since late 1995. We have allocated
significant resources, both internal and external, to an on going, carefully
planned and managed effort to examine all relevant internal computing systems to
identify areas that may require changes. Our efforts include both applications
that we have developed internally and software that has been acquired from
external sources. In addition to the effort to modify existing systems, we have
established Year 2000 compliance standards for all new internal systems.

We completed our Year 2000 efforts on all critical internal application
systems ahead of our self-imposed 12/31/98 schedule. We believe that these
systems are Year 2000 capable in accordance with our corporate standards and
guidelines.

We continue to monitor and test third party software to determine whether it
meets our Year 2000 standards. As needed, we will replace, upgrade or work
around non-compliant products. The effort with respect to third party software
will continue through 1999 as needed. Extended testing is dictated by routine
changes, upgrades, and updates issued by our vendors.

Prior to 1998 with respect to banks and in 1998 for other suppliers, we
established an on-going effort to identify key partners and to reach out to
these entities to determine whether and to what extent there could be an impact
on our business. We have issued Year 2000 readiness surveys to key business
suppliers identified by our Strategic Business Units. We are evaluating
responses to determine which suppliers may present risk and to put in place
appropriate business continuity plans.

Our objective is to provide uninterrupted service to all of our
policyholders and customers through and beyond 2000.

We do not expect that the cost of addressing the Year 2000 issues will be
material to Liberty Life's financial condition or its results of operation.

DISTRIBUTION OF CONTRACTS

Liberty Life Distributors LLC ("LLD") serves as distributor of the
Contracts. LLD is located at 100 Liberty Way, Dover New Hampshire 03820. LLD is
our wholly-owned subsidiary. It is registered as a broker-dealer under the
Securities Exchange Act of 1934, and is a member of the National Association of
Securities Dealers, Inc.

The Contracts described in this Prospectus are sold by registered
representatives of broker-dealers or bank employees who are licensed insurance
agents appointed by the Company, either individually or through an incorporated
insurance agency. LLD enters into selling agreements with affiliated and
unaffiliated broker-dealers and banks whose personnel participate in the offer
and sale of the Contracts. In some states, Contracts may be sold by
representatives or employees of banks that may be acting as broker-dealers
without separate registration under the Securities Exchange Act of 1934,
pursuant to legal and regulatory exceptions.

55
<PAGE>

Generally, representatives will receive a commission of not more than 30% of
the Premiums received in the first year on Premiums up to the commissionable
Premium, plus not more than 4% of any additional Premiums in the first Contract
Year. Commissions on Premiums paid in subsequent years are lower.
Representatives also will generally receive a commission on a Face Amount
increase. In addition we may pay or permit other promotional incentives in cash,
or credit or other compensation. We also may pay override payments, expense
reimbursement allowances, bonuses, broker-dealer fees, training allowances, and
service fees.

The distribution agreement with LLD provides for indemnification of LLD by
Liberty Life for liability to owners arising out of services rendered or
contracts issued.

The name and position of each officer and manager of LLD as of January 1,
1999, is as follows:

John B. Conners, Chairman of the Board of Managers
J. Paul Condrin, Manager
A. Alexander Fontanes, Manager
Christopher C. Mansfield, Manager
Morton E. Spitzer, Manager
John T. Treece, Jr., President
Richard B. Lassow, Vice President, Administration
Richard W. Hadley, Treasurer
Elliott J. Williams, Assistant Treasurer
Barry S. Gilvar, Secretary
Williams J. O'Connell, Assistant Secretary
James R. Pugh, Assistant Secretary
Lee W. Rabkin, Assistant Secretary

The principal business address of Mr. Treece is 100 Liberty Way, Dover, New
Hampshire 03820-5808. The principal business address of the remaining officers
and managers of LLD is 175 Berkeley Street, Boston, Massachusetts 02117.

LEGAL PROCEEDINGS

There are no pending legal proceedings affecting the Variable Account.
Liberty Life is engaged in routine lawsuits which, in our management's judgment,
are not of material importance to its total assets or material with respect to
the Variable Account.

LEGAL MATTERS

All matters of Massachusetts law pertaining to the Contract, including the
validity of the Contract and our right to issue the Contract under Massachusetts
law, have been passed upon by William J. O'Connell, Esq., Vice President and
Assistant General Counsel. The law firm of Jorden Burt Boros Cicchetti Berenson
& Johnson, 1025 Thomas Jefferson St., Suite 400, East Lobby, Washington, D.C.
20007-5201, serve as special counsel to Liberty Life with regard to the federal
securities laws.

56
<PAGE>
REGISTRATION STATEMENT

We have filed a registration statement with the SEC, Washington, D.C., under
the Securities Act of 1933 as amended, with respect to the Contracts offered by
this Prospectus. This Prospectus does not contain all the information set forth
in the registration statement and the exhibits filed as part of the registration
statement. You should refer to the registration statement and the exhibits for
further information concerning the Variable Account, Liberty Life, and the
Contracts. The descriptions in this Prospectus of the Contracts and other legal
instruments are summaries. You should refer to those instruments as filed for
their precise terms.

EXPERTS

The financial statements of Liberty Life Assurance Company of Boston as of
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, included in this Prospectus have been audited by Ernst &
Young LLP, 200 Clarendon Street, Boston, Massachusetts, independent auditors, as
set forth in their report appearing elsewhere herein, and are included in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing. Actuarial matters included in this Prospectus and the
registration statement of which it is a part, including the hypothetical
Contract illustrations, have been examined by Richard B. Lassow, FSA, MAAA, Vice
President and Actuary of the Company, and are included in reliance upon his
opinion as to their reasonableness.

FINANCIAL STATEMENTS

No financial statements are included for the Variable Account. As of July
31, 1999, it had not yet commenced operations, had no assets or liabilities, and
had received no income nor incurred any expense. The financial statements of
Liberty Life that are included should be considered only as bearing upon Liberty
Life's ability to meet its contractual obligations under the Contracts. Liberty
Life's financial statements do not bear on the investment experience of the
assets held in the Variable Account. The most current financial statements of
Liberty Life are those as of the end of the most recent fiscal year. Liberty
Life does not prepare such financial statements more often than annually and
believes that any incremental benefit to prospective Contract Owners that may
result from preparing and delivering more current financial statements, though
unaudited, does not justify the additional cost that would be incurred. Liberty
Life represents that there have been no adverse material changes in Liberty
Life's financial position or operations between the end of the most recent
fiscal year and the date of this Prospectus.

57
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
AUDITED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
CONTENTS

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Report of Independent Auditors............................................................................ F-2

Audited Financial Statements

Balance Sheets............................................................................................ F-3
Statements of Income...................................................................................... F-4
Statements of Stockholders' Equity........................................................................ F-5
Statements of Cash Flows.................................................................................. F-6
Notes to Financial Statements............................................................................. F-8
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Liberty Life Assurance Company of Boston

We have audited the accompanying balance sheets of Liberty Life Assurance
Company of Boston (the Company) as of December 31, 1998 and 1997, and the
related statements of income, stockholders' equity, and cash flows for each of
the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Liberty Life Assurance
Company of Boston at December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts
February 8, 1999

F-2
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
------------ ----------
<S> <C> <C>
ASSETS (IN THOUSANDS)
Investments:
Fixed maturities, available for sale.............................. $ 2,506,333 $2,143,658
Equity securities, available for sale........................... 1 3,187
Policy loans.................................................... 53,153 49,331
Short-term investments.......................................... 38,359 57,956
Other invested assets........................................... 50,760 43,747
------------ ----------
Total investments................................................. 2,648,606 2,297,879
Cash and cash equivalents......................................... 117,610 37,211
Amounts recoverable from reinsurers............................... 58,277 55,313
Premiums receivable............................................... 22,390 13,606
Federal income taxes recoverable.................................. 718
Investment income due and accrued................................. 28,624 23,764
Deferred policy acquisition costs................................. 98,856 89,154
Other assets...................................................... 12,594 7,977
Assets held in separate accounts.................................. 1,914,657 1,487,078
------------ ----------
Total assets...................................................... $ 4,901,614 $4,012,700
------------ ----------
------------ ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Future policy benefits.......................................... $ 1,335,685 $1,128,468
Policyholders' and beneficiaries' funds......................... 832,234 687,458
Policy and contract claims...................................... 38,792 42,222
Dividends to policyholders...................................... 11,826 11,246
Experience rating refund reserves............................... 823 1,760
Liability for participating policies............................ 74,664 72,811
Federal income taxes payable.................................... 18,603
Deferred federal income taxes................................... 101,900 102,767
Due to Parent................................................... 13,408 8,262
Accrued expenses and other liabilities.......................... 170,709 112,724
Liabilities related to separate accounts........................ 1,914,657 1,487,078
------------ ----------
Total liabilities................................................. 4,513,301 3,654,796
Stockholders' equity:
Common stock, $312.50 par value; 8,000 shares authorized, issued
and outstanding................................................ 2,500 2,500
Additional paid-in capital...................................... 52,500 52,500
Retained earnings............................................... 176,269 170,995
Accumulated other comprehensive income.......................... 157,044 131,909
------------ ----------
Total stockholders' equity........................................ 388,313 357,904
------------ ----------
Total liabilities and stockholders' equity........................ $ 4,901,614 $4,012,700
------------ ----------
------------ ----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-3
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
(IN THOUSANDS)
Revenues:
Premiums, net............................................ $ 469,510 $ 415,636 $ 283,965
Net investment income.................................... 164,998 144,989 122,527
Realized capital gains on investments.................... 18,311 8,074 6,722
Contractholder charges and assessments................... 9,816 7,335 5,759
Other revenues........................................... 20,289 9,010 4,469
---------- --------- ---------
Total revenues............................................. 682,924 585,044 423,442
Benefits and expenses:
Death and other policy benefits.......................... 298,277 249,449 173,281
Recoveries from reinsurers on ceded claims............... (12,740) (11,382) (11,454)
Provision for future policy benefits and other policy
liabilities............................................. 213,368 186,883 121,347
Interest credited to policyholders....................... 42,355 38,128 32,252
Change in deferred policy acquisition costs.............. (12,920) (16,709) (15,247)
General expenses......................................... 120,495 100,535 69,926
Insurance taxes and licenses............................. 11,960 10,069 6,956
Dividends to policyholders............................... 11,561 9,279 12,610
---------- --------- ---------
Total benefits and expenses................................ 672,356 566,252 389,671
---------- --------- ---------
Income from continuing operations before federal income
taxes and earnings of participating policies............ 10,568 18,792 33,771
Federal income taxes..................................... 3,441 6,726 10,327
---------- --------- ---------
Income from continuing operations before earnings of
participating policies.................................. 7,127 12,066 23,444
Earnings of participating policies net of federal income
tax benefit of $3,317 in 1998, $3,719 in 1997 and $2,514
in 1996................................................. 1,853 4,307 3,247
---------- --------- ---------
Income from continuing operations........................ 5,274 7,759 20,197
Discontinued operations:
Loss from operations on discontinued group health, net
of federal income tax benefits of $29 in 1997 and $175
in 1996............................................... (54) (325)
---------- --------- ---------
Net income............................................... $ 5,274 $ 7,705 $ 19,872
---------- --------- ---------
---------- --------- ---------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-4
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN RETAINED COMPREHENSIVE
STOCK CAPITAL EARNINGS INCOME TOTAL
----------- ----------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1996................. $ 2,500 $ 2,500 $ 143,418 $ 123,832 $ 272,250
Additional paid-in capital................. 50,000 50,000
Comprehensive income:
Net income............................... 19,872 19,872
Other comprehensive income, net of tax:
Net unrealized losses on investments.... (41,545) (41,545)
Foreign currency translation
adjustment............................. 182 182
------------
Comprehensive income....................... (21,491)
----------- ----------- ------------ ---------------- ------------
Balance at December 31, 1996............... 2,500 52,500 163,290 82,469 300,759
Comprehensive income:
Net income............................... 7,705 7,705
Other comprehensive income, net of tax:
Net unrealized gains on investments..... 48,996 48,996
Foreign currency translation
adjustment............................. 444 444
------------
Comprehensive income....................... 57,145
----------- ----------- ------------ ---------------- ------------
Balance at December 31, 1997............... 2,500 52,500 170,995 131,909 357,904
Comprehensive income:
Net income............................... 5,274 5,274
Other comprehensive income, net of tax:
Net unrealized gains on investments..... 24,174 24,174
Foreign currency translation
adjustment............................. 961 961
------------
Comprehensive income....................... 30,409
----------- ----------- ------------ ---------------- ------------
Balance at December 31, 1998............... $ 2,500 $ 52,500 $ 176,269 $ 157,044 $ 388,313
----------- ----------- ------------ ---------------- ------------
----------- ----------- ------------ ---------------- ------------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-5
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997 1996
------------ ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES
Premiums collected................................... $ 445,376 $ 413,539 $ 280,613
Investment income received........................... 137,106 117,860 98,899
Other considerations received........................ 13,595 10,300 10,331
Policyholder claims paid............................. (210,111) (188,976) (124,297)
Surrender benefits paid.............................. (76,775) (44,534) (33,748)
General expenses paid................................ (102,627) (89,327) (67,834)
Insurance taxes and licenses paid.................... (12,584) (9,955) (3,959)
Policyholder dividends paid.......................... (10,996) (10,962) (12,008)
Federal income taxes recovered (paid), including
capital gains taxes................................. 773 (5,829) (5,858)
Intercompany net receipts............................ 5,146 (645) (426)
Other (payments) receipts............................ (3,268) 11,157 12,218
------------ ---------- ----------
Net cash provided by operating activities............ 185,635 202,628 153,931
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from fixed maturities sold.................. 301,907 159,987 128,493
Proceeds from fixed maturities matured............... 52,370 89,033 91,292
Cost of fixed maturities acquired.................... (639,354) (550,588) (480,206)
Proceeds from equity securities sold................. 6,973 5,039 125,997
Cost of equity securities acquired................... (342) (369) (122,197)
Change in policy loans............................... (3,822) (3,986) (4,673)
Investment cash in transit........................... (1,881) 59 126
Proceeds from short-term investments sold or
matured............................................. 1,002,551 802,596 833,144
Cost of short-term investments acquired.............. (982,689) (780,872) (790,040)
Proceeds from other long-term investments sold....... 8,623 7,962 5,997
Cost of other long-term investments acquired......... (14,934) (10,972) (6,904)
------------ ---------- ----------
Net cash used in investing activities................ (270,598) (282,111) (218,971)
CASH FLOWS FROM FINANCING ACTIVITIES
Additional paid-in capital........................... -- -- 50,000
Policyholders' deposits on investment contracts...... 239,357 185,488 139,579
Policyholders' withdrawals from investment
contracts........................................... (133,503) (82,425) (65,343)
Change in securities loaned.......................... 59,508 (20,741) (89,625)
------------ ---------- ----------
Net cash provided by financing activities.............. 165,362 82,322 34,611
------------ ---------- ----------
Change in cash and cash equivalents.................... 80,399 2,839 (30,429)
Cash and cash equivalents, beginning of year........... 37,211 34,372 64,801
------------ ---------- ----------
Cash and cash equivalents, end of year................. $ 117,610 $ 37,211 $ 34,372
------------ ---------- ----------
------------ ---------- ----------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-6
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
(IN THOUSANDS)
Reconciliation of net income to net cash provided by
operating activities:
Net income............................................... $ 5,274 $ 7,705 $ 19,872
Adjustments to reconcile net income to net cash provided
by operating activities:
Realized capital gains on investments................ (18,311) (8,074) (6,722)
Accretion of bond discount........................... (22,783) (23,586) (20,271)
Interest credited to policyholders................... 43,958 38,128 32,252
Changes in assets and liabilities:
(Repayments of) proceeds from securities loaned.... (59,508) 20,741 89,625
Amounts recoverable from reinsures................. (2,964) (6,513) (11,881)
Premiums receivable................................ (8,784) (5,185) (3,447)
Investment income due and accrued.................. (4,860) (2,944) (3,545)
Deferred policy acquisition costs.................. (12,920) (16,709) (15,247)
Other assets....................................... (4,617) (1,514) 495
Future policy benefits............................. 207,217 191,626 127,800
Policy and contract claims......................... (3,430) 11,828 11,050
Dividends to policyholders......................... 580 (1,673) 610
Experience rating refund liabilities............... (937) (640) 1,210
Liability for participating policies............... 1,853 4,307 3,248
Change in federal income tax balances.............. 19,321 (1,260) 542
Deferred federal income taxes...................... (15,107) 2,128 3,805
Due to Parent...................................... 5,146 (645) (427)
Accrued expenses and other liabilities............. 56,507 (5,092) (75,038)
---------- --------- ---------
Net cash provided by operating activities.......... $ 185,635 $ 202,628 $ 153,931
---------- --------- ---------
---------- --------- ---------
</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-7
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Liberty Life Assurance Company of Boston (the Company) is domiciled in the
Commonwealth of Massachusetts. The Company is directly owned 100% by Liberty
Mutual Property-Casualty Holding Corporation, a subsidiary directly owned 90% by
Liberty Mutual Insurance Company and 10% by Liberty Mutual Fire Insurance
Company (Liberty Mutual).

The Company insures life, annuity and accident and health risks for groups
and individuals. The Company also issues structured settlement contracts and
administers separate account contracts. The Company is licensed and sells its
products in all 50 states, the District of Columbia and Canada.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the financial statements, and the
reported amounts of revenues and expenses during the year. Actual amounts could
subsequently differ from such estimates.

REPORTING CHANGES

During 1998, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 130, "REPORTING COMPREHENSIVE INCOME." SFAS No. 130 establishes
standards for the reporting and display of comprehensive income and its
components and requires that selected changes in stockholders' equity be added
to net income and reported as comprehensive income. The Company adopted this
Statement retroactively and has reported this information within the statement
of stockholders' equity and the footnotes to the financial statements. The
adoption of SFAS No. 130 had no impact on the Company's financial position or
results of operations.

During 1998, the Company adopted SFAS No. 131, "DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION." SFAS No. 131 establishes standards
for the disclosure of information about the Company's operating segments, which
are defined on the same basis that the Company is managed, including disclosures
about products and services, geographic areas, and major customers. The adoption
of SFAS No. 131 did not affect the Company's financial position or results of
operations, nor did it affect the manner in which the Company defines its
operating segments. Data reported for all periods has been presented to conform
to the requirements of SFAS No. 131.

F-8
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants (AICPA) issued Statement of Position
(SOP) 98-1, "ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED
FOR INTERNAL USE." SOP 98-1 provides guidance for determining whether computer
software is for internal use and when costs incurred for internal use software
are to be capitalized. SOP 98-1 is effective for fiscal years beginning after
December 15, 1998. The adoption of SOP 98-1 is not expected to have a material
impact on the Company's financial statements.

In April 1998, the AICPA issued SOP 98-5, "REPORTING THE COSTS OF START-UP
ACTIVITIES." The SOP is effective beginning on January 1, 1999, and requires
that start-up costs capitalized prior to January 1, 1999 be written-off and any
future start-up costs be expensed as incurred. Restatement of previously issued
financial statements is not permitted. SOP 98-5 is not expected to have a
material impact on the Company's financial statements.

In December 1997, the AICPA issued SOP 97-3, "ACCOUNTING BY INSURANCE AND
OTHER ENTERPRISES FOR INSURANCE-RELATED ASSESSMENTS." SOP 97-3 provides guidance
for assessments related to insurance activities and requirements for disclosure
of certain information. SOP 97-3 is effective for financial statements issued
for periods beginning after December 31, 1998. Restatement of previously issued
financial statements is not permitted. SOP 97-3 is not expected to have a
material impact on the Company's financial statements.

SOP 98-7, "DEPOSIT ACCOUNTING: ACCOUNTING FOR INSURANCE AND REINSURANCE
CONTRACTS THAT DO NOT TRANSFER INSURANCE RISK," provides guidance on how to
account for insurance and reinsurance contracts that do not transfer insurance
risk under a method referred to as deposit accounting. SOP 98-7 is effective for
fiscal years beginning after June 15, 1999. SOP 98-7 is not expected to have a
material impact on the Company's financial statements.

INVESTMENTS

Fixed maturity and equity securities are classified as available for sale
and are carried at fair value. Unrealized gains and losses on fixed maturity and
equity securities are reflected in accumulated other comprehensive income, net
of applicable deferred income taxes.

For the mortgage-backed bond portion of the fixed maturity investment
portfolio, the Company recognizes income using a constant effective yield based
on anticipated prepayments over the estimated economic life of the security.
When actual prepayments differ significantly from anticipated prepayments, the
effective yield is recalculated to reflect actual payments to date and
anticipated future payments and any resulting adjustments are included in
investment income.

F-9
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Short-term investments include investments with maturities of less than one
year at the date of acquisition.

Other invested assets, principally investments in limited partnerships, are
accounted for using the equity method.

Policy loans are reported at unpaid loan balances.

Realized capital gains and losses are determined on the specific
identification basis.

DEFERRED POLICY ACQUISITION COSTS

Policy acquisition costs are the costs of acquiring new business which vary
with, and are primarily related to, the production of new business. Such costs
include commissions, costs of policy underwriting and variable agency expenses.
Acquisition costs related to traditional and group life insurance and certain
long-duration group accident and health insurance, to the extent recoverable
from future policy revenues, are deferred and amortized over the premium-paying
period of the related policies using assumptions consistent with those used in
computing policy benefit reserves. Costs relating to group life and disability
insurance policies are amortized straight line over a five-year period. For
universal life insurance and investment products, to the extent recoverable from
future gross profits, deferred policy acquisition costs are amortized generally
in proportion to the present value of expected gross profits from surrender
charges and investment, mortality and expense margins. Deferred policy
acquisition costs are adjusted for amounts relating to unrealized gains and
losses on fixed maturity and equity securities the Company has designated as
available for sale. This adjustment, net of tax, is included with the net
unrealized gains or losses that are reflected in accumulated other comprehensive
income.

RECOGNITION OF TRADITIONAL LIFE PREMIUM REVENUE AND RELATED EXPENSES

Premiums on traditional life insurance policies are recognized as revenue
when due. Benefits and expenses are associated with premiums so as to result in
the recognition of profits over the life of the policies. This association is
accomplished by providing liabilities for future policy benefits and the
deferral and subsequent amortization of acquisition costs.

RECOGNITION OF UNIVERSAL LIFE REVENUE AND POLICY ACCOUNT BALANCES

Revenues from universal life policies represent investment income from the
related invested assets and amounts assessed against policyholders. Included in
such assessments are mortality charges, surrender charges paid and
administrative fees. Policy account balances consist of consideration received
plus credited interest, less accumulated policyholder charges, assessments and
withdrawals. Credited interest rates were between 5.5% and 6.3% in 1998, 1997
and 1996.

F-10
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENT CONTRACTS

The Company writes certain annuity and structured settlement contracts
without mortality risk which are accounted for as investment contracts. Revenues
for investment contracts consist of investment income from the related invested
assets, with profits recognized to the extent investment income earned exceeds
the amount credited to the contract. This method of computing the liability for
future policy benefits effectively results in recognition of profits over the
benefit period. Policy account balances consist of consideration received plus
credited interest less policyholder withdrawals. Credited interest rates for
annuity contracts were between 5.0% and 5.85% in 1998, 5.30% and 7.25% in 1997
and 5.35% and 7.05% in 1996. Credited interest rates for structured settlement
contracts were between 6.1% and 11.4% in 1998, 1997 and 1996.

FUTURE POLICY BENEFITS

Liabilities for future policy benefits for traditional life policies have
been computed using the net level premium method based on estimated future
investment yield, mortality and withdrawal experience. Interest rate assumptions
were between 4.5% and 10.25% for all years of issue. Mortality assumptions have
been calculated principally on an experience multiple applied to the 1955-60 and
1965-70 Select and Ultimate Basic Tables for issues prior to 1986, the 1986
Bragg Non-Smoker/Smoker Select and Ultimate Basic Tables for 1986 to 1992 issues
and the 1991 Bragg Non-Smoker/Smoker Select and Ultimate Basic Tables for 1993
and subsequent issues. Withdrawal assumptions generally are based on the
Company's experience.

The liability for future policy benefits with respect to structured
settlement contracts with life contingencies and single premium group annuities
(group pension) is determined based on interest crediting rates between 6.1% and
11.4%, and the mortality assumptions are based on the 1971 GAM and IAM tables.

Future policy benefits for long-term disability cases are computed using the
1987 Commissioners' Group Disability Table adjusted for the Companys'
experience.

POLICY AND CONTRACT CLAIMS

Accident and health business policy and contract claims principally include
claims in course of settlement and claims incurred but not reported, which are
determined based on a formula derived as a result of the Company's past
experience. Claims liabilities may be more or less than the amounts paid when
the claims are ultimately settled. Such differences are considered changes in
estimates and are recorded in the statement of income in the year the claims are
settled.

F-11
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REINSURANCE

All assets and liabilities related to reinsurance ceded contracts are
reported on a gross basis in the accompanying balance sheets. The accompanying
statements of income reflect premiums, benefits and settlement expenses net of
reinsurance ceded.

Reinsurance premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for original policies issued and the terms of the
reinsurance contracts.

FEDERAL INCOME TAXES

Income taxes have been provided using the liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes." Under this method, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect of a change in tax rates on deferred tax
assets and liabilities is recognized in income in the period that includes the
enactment date. The measurement of deferred tax assets is reduced by a valuation
allowance if, based upon the available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.

PARTICIPATING POLICIES

Participating policies approximate 28%, 29% and 33% of ordinary life
insurance in force at December 31, 1998, 1997 and 1996, respectively, and 13%,
12% and 18% of ordinary insurance premium revenue in 1998, 1997 and 1996,
respectively. Dividends to participating policyholders are calculated as the sum
of the difference between the assumed mortality, interest and loading, and the
actual experience of the Company relating to participating policyholders. As a
result of statutory regulations, the major portion of earnings from
participating policies inures to the benefit of the participating policyholders
and is not available to stockholders. Undistributed earnings of the
participating block of business is represented by the liability for
participating policies in the accompanying balance sheets. The payment of
dividends to stockholders is further restricted by insurance laws of the
Commonwealth of Massachusetts.

FOREIGN CURRENCY TRANSLATIONS

The Company enters into certain transactions that are denominated in a
currency other than the U.S. dollar. Functional currencies are assigned to
foreign currencies. These amounts are accumulated and then converted to U.S.
dollars. The unrealized gain or loss from the

F-12
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

translation is reflected in accumulated other comprehensive income, net of
deferred federal income taxes. The translations are calculated using current
exchange rates for the balance sheet and average exchange rates for the
statement of income.

SEPARATE ACCOUNTS

Separate account assets and liabilities reported in the accompanying balance
sheets represent funds that are separately administered, principally for annuity
contracts, and for which the contractholder, rather than the Company, bears the
investment risk. Separate account contractholders have no claim against the
assets of the general account of the Company. Separate account assets are
reported at market value. The operations of the separate accounts are not
included in the accompanying financial statements. Fees charged on separate
account policyholder deposits are included in other income.

RECLASSIFICATION

Certain 1996 and 1997 amounts have been reclassified to conform to the 1998
presentation.

F-13
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

2. INVESTMENTS

FIXED MATURITIES

The amortized cost, gross unrealized gains and losses, and fair value of
investments in fixed maturities available for sale are summarized as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
----------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies......... $ 378,791 $ 108,906 $ (163) $ 487,534
Debt securities issued by states
and municipalities................ 55,805 3,651 59,456
Corporate securities............... 998,995 102,351 (1,687) 1,099,659
U.S. government guaranteed
mortgage-backed securities........ 823,966 36,695 (977) 859,684
------------ ----------- ----------- ------------
Total fixed maturities available
for sale.......................... $ 2,257,557 $ 251,603 $ (2,827) $ 2,506,333
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies............ $ 403,296 $ 99,877 $ (80) $ 503,093
Debt securities issued by states and
municipalities....................... 50,794 2,848 53,642
Corporate securities.................. 773,208 68,035 (601) 840,642
U.S. government guaranteed
mortgage-backed securities........... 712,132 34,543 (394) 746,281
---------- ----------- ----------- ----------
Total fixed maturities available for
sale................................. $1,939,430 $ 205,303 $ (1,075) $2,143,658
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
</TABLE>

F-14
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

2. INVESTMENTS (CONTINUED)

The amortized cost and fair value of the Company's investment in fixed
maturities available for sale by contractual maturity is summarized as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
--------------------------
AMORTIZED FAIR
COST VALUE
------------ ------------
<S> <C> <C>
Maturity in one year or less................................ $ 37,559 $ 37,981
Maturity after one year through five years.................. 316,747 340,845
Maturity after five years through ten years................. 508,497 551,012
Maturity after ten years.................................... 570,788 716,811
U.S. government guaranteed mortgage-backed securities....... 823,966 859,684
------------ ------------
Total fixed maturities available for sale................... $ 2,257,557 $ 2,506,333
------------ ------------
------------ ------------
</TABLE>

The expected maturities in the foregoing table may differ from the
contractual maturities because certain borrowers have the right to call or
prepay obligations with or without call or prepayment penalties.

Gross gains of $11,163, $1,145 and $1,472, and gross losses of $516, $1,019
and $1,411, were realized on the sales of fixed maturities available for sale
during 1998, 1997 and 1996, respectively.

At December 31, 1998, bonds with a cost of $8,851 were on deposit with state
insurance departments to satisfy regulatory requirements.

F-15
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

2. INVESTMENTS (CONTINUED)

EQUITY SECURITIES AND OTHER INVESTED ASSETS

Unrealized gains and losses on investments in equity securities available
for sale and other invested assets are reflected in stockholders' equity and do
not affect operations. The cost, gross unrealized gains and losses, and fair
value of those investments are summarized as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
----------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Equity securities........................ $ 1 $ 1
Other invested assets.................... 49,674 $ 5,071 $ (3,985) 50,760
--------- ----------- ----------- ---------
Total.................................... $ 49,675 $ 5,071 $ (3,985) $ 50,761
--------- ----------- ----------- ---------
--------- ----------- ----------- ---------
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31, 1997
----------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Equity securities........................ $ 3,003 $ 401 $ (217) $ 3,187
Other invested assets.................... 39,217 6,304 (1,774) 43,747
--------- ----------- ----------- ---------
Total.................................... $ 42,220 $ 6,705 $ (1,991) $ 46,934
--------- ----------- ----------- ---------
--------- ----------- ----------- ---------
</TABLE>

NET INVESTMENT INCOME

Major categories of the Company's net investment income are summarized as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
Investment income:
Fixed maturities.................................... $ 160,351 $ 139,894 $ 118,365
Equity securities................................... 83
Policy loans........................................ 3,238 3,020 2,672
Short-term investments and cash equivalents......... 2,598 2,376 1,633
Other invested assets............................... 2,003 1,623 1,476
---------- --------- ---------
Gross investment income............................... 168,190 146,913 124,229
Less investment expenses.............................. 3,192 1,924 1,702
---------- --------- ---------
Net investment income................................. $ 164,998 $ 144,989 $ 122,527
---------- --------- ---------
---------- --------- ---------
</TABLE>

F-16
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

2. INVESTMENTS (CONTINUED)

REALIZED CAPITAL GAINS ON INVESTMENTS

Realized capital gains on investments were derived from the following
sources:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Fixed maturities............................................ $ 10,647 $ 126 $ 61
Equity securities........................................... 3,629 4,575 3,812
Other invested assets....................................... 4,035 3,373 2,849
--------- --------- ---------
Realized capital gains on investments....................... $ 18,311 $ 8,074 $ 6,722
--------- --------- ---------
--------- --------- ---------
</TABLE>

CONCENTRATION OF INVESTMENTS

There were no investments in a single entity's fixed maturities in excess of
ten percent of stockholders' equity at December 31, 1998 and 1997.

3. REINSURANCE

Certain premiums and benefits are assumed from and ceded to other insurance
companies under various reinsurance agreements. The Company cedes business to
reinsurers

F-17
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

3. REINSURANCE (CONTINUED)

to share risks under life, health, and annuity contracts for the purpose of
providing the Company with increased capacity to write larger risks and maintain
its exposure to loss within capital resources. The effect of reinsurance assumed
and ceded on premiums was as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
------------------------------------------------
ASSUMED
FROM CEDED TO
DIRECT OTHER OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Individual Life and Annuity........... $ 148,153 $ 3,873 $ 1,907 $ 150,119
Group Life and Disability............. 317,155 482 14,758 302,879
Group Pension and Other............... 20,908 5,354 9,750 16,512
---------- ----------- ----------- ----------
Total premiums........................ $ 486,216 $ 9,709 $ 26,415 $ 469,510
---------- ----------- ----------- ----------
---------- ----------- ----------- ----------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
------------------------------------------------
ASSUMED
FROM CEDED TO
DIRECT OTHER OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
--------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Individual Life and Annuity............. $ 142,357 $ 6,022 $ 1,456 $ 146,923
Group Life and Disability............... 265,620 2,698 10,699 257,619
Group Pension and Other................. 15,263 4,169 11,094
--------- ------------- ----------- ---------
Total premiums.......................... $ 423,240 $ 8,720 $ 16,324 $ 415,636
--------- ------------- ----------- ---------
--------- ------------- ----------- ---------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------
ASSUMED
FROM CEDED TO
DIRECT OTHER OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
--------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Individual Life and Annuity............. $ 102,373 $ 2,939 $ 5,536 $ 99,776
Group Life and Disability............... 187,766 55 7,746 180,075
Group Pension and Other................. 6,438 2,324 4,114
--------- ------------- ----------- ---------
Total premiums.......................... $ 296,577 $ 2,994 $ 15,606 $ 283,965
--------- ------------- ----------- ---------
--------- ------------- ----------- ---------
</TABLE>

Amounts payable or recoverable for reinsurance on policy and contract
liabilities are not subject to periodic or maximum limits. At December 31, 1998,
no individual reinsurer owed the Company an amount that was equal to or greater
than 3% of the Company's surplus.

The Company remains obligated for amounts ceded in the event that the
reinsurers do not meet their obligations.

F-18
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

4. FEDERAL INCOME TAXES

The Company is included in a consolidated federal income tax return with
Liberty Mutual and its other subsidiaries. Under a written tax sharing
agreement, approved by the Board of Directors, Liberty Mutual collects from and
refunds to the subsidiaries the amount of taxes or benefits determined as if
Liberty Mutual and the subsidiaries filed separate returns.

Federal income tax expense (benefit) attributable to income from operations
was composed of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Continuing operations:
Current.................................................. $ 18,548 $ 4,598 $ 7,011
Deferred................................................. (15,107) 2,128 3,316
--------- --------- ---------
Federal income tax expense................................. $ 3,441 $ 6,726 $ 10,327
--------- --------- ---------
--------- --------- ---------
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------
1998 1997 1996
----- ----- ---------
<S> <C> <C> <C>
Discontinued operations:
Current......................................................... $ 0 $ (29) $ (175)
Deferred........................................................ 0 0 0
--
----- ---------
Federal income tax benefit........................................ $ 0 $ (29) $ (175)
--
--
----- ---------
----- ---------
</TABLE>

A reconciliation of federal income tax expense as recorded in the statements
of income with expected federal income tax expense computed at the applicable
federal income tax rate of 35% is summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Expected income tax expense................................. $ 3,699 $ 6,577 $ 11,820
Adjustments to income taxes resulting from:
Reconciliation of prior year tax return................. (756) 68 (1,226)
Other, net.............................................. 498 81 (267)
--------- --------- ---------
Federal income tax expense.................................. $ 3,441 $ 6,726 $ 10,327
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-19
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

4. FEDERAL INCOME TAXES (CONTINUED)

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred liabilities are summarized as
follows:

<TABLE>
<CAPTION>
AT DECEMBER 31
-----------------------
1998 1997
----------- ----------
<S> <C> <C>
Deferred tax assets:
Dividends to policyholders................................... $ 2,984 $ 2,816
Unearned interest on policy loans............................ 338 323
Unearned group premium adjustment............................ 91 1,021
Accrued surrender charges on deposit funds................... 1,531 426
Bonds purchased at market premium............................ 3,318
Recapture of statutory reinsurance........................... 21,777
Other........................................................ 292 93
----------- ----------
Total deferred tax assets...................................... 30,331 4,679
----------- ----------
Deferred tax liabilities:
Future policy benefits....................................... (23,343) (11,483)
Deferred acquisition costs................................... (21,504) (20,772)
Bonds purchased at market discount........................... (2,115)
Bonds market valuation adjustment............................ (83,366) (68,569)
Unrealized gain on other long-term investments............... (380) (1,649)
Reconciliation of taxes on other long-term investments....... (1,145) (951)
Cumulative foreign currency translations..................... (1,370) (852)
Deferred and uncollected premium adjustment.................. (791) (646)
Other........................................................ (332) (409)
----------- ----------
Total deferred tax liabilities................................. (132,231) (107,446)
----------- ----------
Net deferred tax liability..................................... $ (101,900) $ (102,767)
----------- ----------
----------- ----------
</TABLE>

In the opinion of management, it is more likely than not that the Company
will realize the benefit of the deferred tax assets and, therefore, no valuation
allowance has been established.

Prior to 1984, a portion of the Company's income was not taxed, but was
accumulated in a "policyholders' surplus account." In the event that those
amounts are distributed to stockholders', or the balance of the account exceeds
certain limitations under the Internal Revenue Code, the excess amounts would
become taxable at current rates. The policyholders' surplus account balance at
December 31, 1998 and 1997 was approximately $4,000. Management does not intend
to take actions nor does management expect any events to occur that would cause
federal income taxes to become payable on that amount. However, if such taxes
were assessed, the amount of taxes payable would be approximately $1,400 in 1998
and 1997.

F-20
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

5. UNPAID CLAIMS LIABILITY FOR GROUP ACCIDENT AND HEALTH BUSINESS

The following table provides a reconciliation of the beginning and ending
balances of unpaid claim liabilities, principally included in future policy
benefits, net of reinsurance recoverables:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31
---------------------
1998 1997
---------- ---------
<S> <C> <C>
Unpaid claim liabilities, at beginning of year........... $ 254,002 $ 163,035
Less reinsurance recoverables............................ 490 238
---------- ---------
Net balance at beginning of year......................... 253,512 162,797
Claims incurred related to:
Current year........................................... 247,527 196,941
Prior years--incurred.................................. 9,693 6,432
Prior years--interest.................................. 13,400 9,132
---------- ---------
Total incurred........................................... 270,620 212,505
Claims paid related to:
Current year........................................... 78,851 76,710
Prior years............................................ 79,198 45,080
---------- ---------
Total paid............................................... 158,049 121,790
---------- ---------
Net balance at end of year............................... 366,083 253,512
Add reinsurance recoverables........................... 852 490
---------- ---------
Unpaid claim liabilities, at end of year................. $ 366,935 $ 254,002
---------- ---------
---------- ---------
</TABLE>

The adverse development during 1998 and 1997 primarily resulted from a
higher incidence of new claims on certain policies. Interest accrued on prior
year reserves has been calculated on the opening reserve balance less one half
year's cash payments at the average rate at which the Company's reserves were
discounted during 1998 and 1997.

6. RISK-BASED CAPITAL AND RETAINED EARNINGS

Life insurance companies are subject to certain Risk-Based Capital (RBC)
requirements as specified by the NAIC. Under those requirements, the amount of
capital and surplus maintained by a life insurance company is to be determined
based on the various risk factors related to it. At December 31, 1998, the
Company meets the RBC requirements.

The payment of dividends by the Company to stockholders is limited and
cannot be made except from earned profits. The maximum amount of dividends that
may be paid by life insurance companies without prior approval of the
Commonwealth of Massachusetts Insurance Commissioner is subject to restrictions
relating to statutory surplus and net gain from operations.

According to a resolution voted by the Board of Directors of the Company,
not more than the larger of 10% of statutory profits on participating business
or fifty cents per thousand dollars of participating business in force in a
given year may accrue to the benefit of stockholders. The amount of statutory
unassigned (deficit) surplus held for the benefit of

F-21
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

6. RISK-BASED CAPITAL AND RETAINED EARNINGS (CONTINUED)

participating policyholders and stockholders was $(14,047) and $73,746,
respectively, at December 31, 1998. Dividends paid to policyholders were $10,996
in 1998, and there were no dividends paid to stockholders in 1998.

7. COMMITMENTS AND CONTINGENCIES

The Company is named as a defendant in various legal actions arising
principally from claims made under insurance policies and contracts. Those
actions are considered by the Company in estimating reserves for policy and
contract liabilities. The Company's management believes that the resolution of
those actions will not have a material effect on the Company's financial
position or results of operations.

The Company is subject to insurance guaranty fund laws in the states in
which it does business. These laws assess insurance companies amounts to be used
to pay benefits to policyholders and claimants of insolvent insurance companies.
Many states allow these assessments to be credited against future premium taxes.
At December 31, 1998, 1997 and 1996, the Company has accrued $645, $576 and
$888, respectively, of premium tax deductions. The Company recognizes its
obligations for guaranty fund assessments when it receives notice that an amount
is payable to a guaranty fund. Expenses incurred for guaranty fund assessments
were $23, $443 and $150 in 1998, 1997 and 1996, respectively.

8. SEPARATE ACCOUNTS

Separate Accounts held by the Company represent primarily funds which are
administered for pension plans. The assets consist of common stock, long-term
bonds, real estate and short-term investments which are carried at estimated
fair value. Investment income and changes in asset values do not affect the
operating results of the Company. Separate Accounts business is maintained
independently from the general account of the Company. The Company provides
administrative services for these contracts. Fees earned by the Company related
to these contracts included in other revenues were $2,016, $1,700 and $1,503 for
the years ended December 31, 1998, 1997 and 1996, respectively.

9. BENEFIT PLANS

Significant benefit plans are sponsored by Liberty Mutual and the associated
costs are shared by members of the Liberty Companies. Liberty Mutual's sponsored
plans are summarized as follows:

F-22
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

9. BENEFIT PLANS (CONTINUED)

(A) PENSION PLAN

Liberty Mutual sponsors noncontributory defined benefit pension plans (the
Plans) covering U.S. employees who have attained age 21 and have completed
one year of service and Canadian employees who have completed one year of
service. The benefits are based on years of service and the employee's
"final average compensation" which is the employee's average annual
compensation for the highest five consecutive calendar years during the ten
years immediately preceding retirement.

In 1997, Liberty Mutual adopted SFAS No. 87, EMPLOYERS' ACCOUNTING FOR
PENSIONS, for vested employees. In 1996, the accounting policy was primarily
to recognize expense equal to the amount funded. Assets of the Plans consist
primarily of investments in life insurance company separate accounts and a
collective investment trust fund, which invests primarily in fixed income
and Standard and Poor's Index of 500 equity securities. At December 31, 1998
and 1997, assets of the Plans totaling $1,548,141 and $1,197,094,
respectively, were held in separate accounts managed by the Company.

Under the intercompany pooling agreement, there was no pension expense
charged to the Company in 1998 and 1997 and $395 of pension expense charged
to the Company in 1996.

(b) POSTRETIREMENT BENEFITS

Liberty Mutual provides certain health care and life insurance benefits
(postretirement) for retired employees. Substantially all employees may
become eligible for these benefits if they reach retirement age and have ten
years of service working for the Liberty Companies. Alternatively, retirees
may elect certain prepaid health care benefit plans. Life insurance benefits
are based upon a participant's final compensation subject to the plan
maximum.

Under the intercompany pooling arrangement, $372, $166 and $236 of
postretirement expense was charged to the Company in 1998, 1997 and 1996,
respectively.

Liberty Mutual sponsors a defined contribution savings plan for all
employees of the Liberty Companies who meet certain eligibility
requirements. During 1998, 1997 and 1996, employees were permitted to
contribute up to 16% of their annual compensation on a combined before-tax
and after-tax basis, subject to certain limitations imposed by the Tax
Reform Act of 1986. In 1998, 1997 and 1996, Liberty Mutual made matching
contributions of $1.00, $1.00 and $0.87, respectively, for each dollar
contributed by employees, up to 6% of their annual compensation. Liberty
Mutual's expense was $40,278, $36,850 and $30,075 in 1998, 1997 and 1996,
respectively.

F-23
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

9. BENEFIT PLANS (CONTINUED)

Under the intercompany pooling arrangement, the Company's expense related to
the Thrift-Incentive Plan is borne by Liberty Mutual.

10. RELATED-PARTY TRANSACTIONS

Under a Service Agreement between the Company and Liberty Mutual, the latter
provides personnel, office space, equipment, computer processing and other
services. The Company reimburses Liberty Mutual for these services at cost, and
for any other special services supplied at the Company's request. Substantially
all of the Company's general expenses incurred in 1998, 1997 and 1996 related to
this agreement.

The Company insures the group term life and disability risks for Liberty
Mutual employees. Premiums associated with these policies amounted to $17,249,
$15,768 and $13,903 in 1998, 1997 and 1996, respectively.

The Company insures key officers of Liberty Mutual Group under an Optional
Life Insurance Plan. Premiums associated with this plan amounted to $9,329,
$8,252 and $4,967 in 1998, 1997 and 1996, respectively.

Liberty Mutual purchases structured settlement annuity contracts, with and
without life contingencies, from the Company. Premiums under these contracts
amounted to $137,663, $136,161 and $91,754 in 1998, 1997 and 1996, respectively.
The related policy and contract reserves with respect to all structured
settlement annuity contracts purchased by Liberty Mutual amounted to $714,886
and $595,146 at December 31, 1998 and 1997, respectively.

Liberty Mutual deposited $3,206 and $774 with the Company in 1998 and 1997,
respectively, to fund certain Liberty Mutual environmental claim transactions.
Such amounts have been included in the liability for policyholders' and
beneficiaries' funds at December 31, 1998 and 1997, respectively.

In 1996, Keyport Life Insurance Company began ceding 100% of the premiums
and benefits of certain structured settlement annuity contracts, with and
without life contingencies, to the Company. Premiums under these contracts
amounted to $4,280, $6,002 and $3,194 in 1998, 1997 and 1996, respectively. The
related policy and contract reserves with respect to these structured settlement
annuity contracts assumed by the Company amounted to $13,223 and $8,501 at
December 31, 1998 and 1997, respectively.

F-24
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

11. DEFERRED POLICY ACQUISITION COSTS

Details with respect to deferred policy acquisition costs are summarized as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31
--------------------
1998 1997
--------- ---------
<S> <C> <C>
Balance, beginning of year................................ $ 89,154 $ 77,424
Additions............................................... 31,405 28,736
Amortization............................................ (18,485) (12,027)
Valuation adjustment for unrealized gain on fixed
maturities............................................. (3,218) (4,979)
--------- ---------
Balance, end of year...................................... $ 98,856 $ 89,154
--------- ---------
--------- ---------
</TABLE>

12. STATUTORY FINANCIAL INFORMATION

The Company prepares their statutory-basis financial statements in
accordance with accounting practices prescribed or permitted by the Division of
Insurance of the Commonwealth of Massachusetts. Prescribed statutory accounting
practices include state laws, regulations and administrative rules, as well as
guidance published by the NAIC. Permitted accounting practices encompass all
accounting practices that are not prescribed by the sources noted above.

During 1998, the Company entered into a reinsurance agreement with Liberty
Mutual Insurance Company to cede to Liberty Mutual 100% of its existing group
long and short-term disability, individual accident and sickness, and student
accident and health business. The Company received permission from the
Commonwealth of Massachusetts to treat this agreement as prospective reinsurance
in its entirety for 1998. This agreement increased the Company's statutory net
gain from operations before federal income taxes by $64,898 in 1998. There are
no other material permitted practices.

Statutory net income (loss) and capital and surplus is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
Statutory net income (loss)............................ $ 9,741 $ (8,549) $ 3,554
Statutory capital and surplus.......................... 115,449 126,669 137,933
</TABLE>

F-25
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

13. STOCKHOLDERS' EQUITY

The components of accumulated other comprehensive income are as follows:

<TABLE>
<CAPTION>
NET FOREIGN ACCUMULATED
UNREALIZED CURRENCY OTHER
GAINS TRANSLATION COMPREHENSIVE
(LOSSES) ADJUSTMENT INCOME
----------- ------------- ----------------
<S> <C> <C> <C>
Balance at January 1, 1996.................. $ 122,875 $ 957 $ 123,832
Gross unrealized losses (net of deferred
income tax benefit of $20,222)............. (37,556) (37,556)
Less reclassification adjustment for gains,
realized in net income (net of tax expense
of $2,353)................................. (4,369) (4,369)
Adjustment to deferred policy acquisition
costs (net of deferred income tax expense
of $205)................................... 380 380
----------- ----------------
Net unrealized losses....................... (41,545) (41,545)
Foreign currency translation adjustment..... 182 182
----------- ------------- ----------------
Balance at December 31, 1996................ 81,330 1,139 82,469
Gross unrealized gains (net of deferred
income tax expense of $30,951)............. 57,480 57,480
Less reclassification adjustment for gains,
realized in net income (net of tax expense
of $2,826)................................. (5,248) (5,248)
Adjustment to deferred policy acquisition
costs and present value of future profits
(net of deferred income tax benefit of
$1,743).................................... (3,236) (3,236)
----------- ----------------
Net unrealized gains........................ 48,996 48,996
Foreign currency translation adjustment..... 444 444
----------- ------------- ----------------
Balance at December 31, 1997................ 130,326 1,583 131,909
Gross unrealized gains (net of deferred
income tax expense of $20,552)............. 38,168 38,168
Less reclassification adjustment for gains,
realized in net income (net of tax expense
of $6,409)................................. (11,902) (11,902)
Adjustment to deferred policy acquisition
costs (net of deferred income tax benefit
of $1,126)................................. (2,092) (2,092)
----------- ----------------
Net unrealized gains........................ 24,174 24,174
Foreign currency translation adjustment..... 961 961
----------- ------------- ----------------
Balance at December 31, 1998................ $ 154,500 $ 2,544 $ 157,044
----------- ------------- ----------------
----------- ------------- ----------------
</TABLE>

F-26
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

13. STOCKHOLDERS' EQUITY (CONTINUED)

Net unrealized investment gains, included in the balance sheets as a
component of stockholders' equity are summarized as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
Balance, end of year comprises:
Unrealized investment gains on:
Fixed maturities............................ $ 248,776 $ 204,228 $ 121,967
Equity investments and other................ 1,086 4,714 6,576
---------- --------- ---------
Total........................................... 249,862 208,942 128,543
Amounts of unrealized investment gains
attributable to:
Deferred policy acquisition costs........... (11,616) (8,398) (3,419)
Deferred federal income taxes............... (83,746) (70,218) (43,794)
---------- --------- ---------
Total........................................... (95,362) (78,616) (47,213)
---------- --------- ---------
Net unrealized investment gains................. $ 154,500 $ 130,326 $ 81,330
---------- --------- ---------
---------- --------- ---------
</TABLE>

14. SEGMENT INFORMATION

The Company's business is organized in three principal segments: Individual
Life and Annuity, Group Life and Disability, and Group Pension and Other. In the
Individual Life and Annuity segment, the Company sells a variety of individual
products, including participating whole life, term insurance, universal life,
structured settlements, and immediate and deferred annuity contracts. These
products are sold through a combination of distribution methods, including
Company agents, Liberty Mutual personal markets agents, direct marketers, and
banks. In the Group Life and Disability segment, the Company sells group life
and long-term and short-term disability products to corporate and organizational
customers through the Company's group market agency force. The Group Pension and
Other segment is a closed block of active pension customers, as well as
international customer life and disability products.

The accounting policies of the segments are the same as those described in
Note 1. The Company evaluates performance based on the income from continuing
operations before federal income taxes and earnings of participating policies of
the segments.

F-27
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

14. SEGMENT INFORMATION (CONTINUED)

The following table summarizes selected financial information by segment:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------
1998 1997 1996
------------ ---------- ---------
<S> <C> <C> <C>
Revenues:
Individual Life and Annuity.................... $ 274,175 $ 250,751 $ 186,696
Group Life and Disability...................... 351,384 301,684 203,911
Group Pension and Other........................ 57,365 32,609 32,835
------------ ---------- ---------
Total revenues................................... $ 682,924 $ 585,044 $ 423,442
------------ ---------- ---------
------------ ---------- ---------
Income (loss) from continuing operations before
federal income taxes and earnings of
participating policies:
Individual Life and Annuity.................. $ 31,446 $ 28,874 $ 24,319
Group Life and Disability.................... (23,160) (11,588) 8,377
Group Pension and Other...................... 2,282 1,506 1,075
------------ ---------- ---------
Total income from continuing operations before
federal income taxes and earnings of
participating policies.......................... $ 10,568 $ 18,792 $ 33,771
------------ ---------- ---------
------------ ---------- ---------
</TABLE>

<TABLE>
<CAPTION>
AT DECEMBER 31
1998 1997
------------ ----------
<S> <C> <C> <C>
Assets:
Individual Life and Annuity.................... $ 1,875,583 $1,640,099
Group Life and Disability...................... 571,695 522,569
Group Pension and Other........................ 2,454,336 1,850,032
------------ ----------
Total assets..................................... $ 4,901,614 $4,012,700
------------ ----------
------------ ----------
</TABLE>

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair values generally represent quoted market value prices for securities
traded in the public marketplace, or analytically determined values using bid or
closing prices for securities not traded in the public marketplace.

The following methods and assumptions were used by the Company in estimating
the "fair value" disclosures for financial instruments in the accompanying
financial statements and notes thereto:

FIXED MATURITIES

Fair values for publicly-traded fixed maturates are determined using values
reported by an independent pricing service. Fair values of private placement
fixed maturities are determined by obtaining market indications from various
broker-dealers.

F-28
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

EQUITY SECURITIES

The fair values for equity securities are based upon quoted market prices,
where available; for equity securities that are not actively traded,
estimated fair values are based on values of issues of comparable yield and
quality.

POLICY LOANS

The carrying amounts reported in the accompanying balance sheets for these
financial instruments approximate their fair values.

SHORT-TERM INVESTMENTS

The carrying amounts reported in the accompanying balance sheets for these
financial instruments approximate their fair values.

OTHER INVESTED ASSETS

The fair values of other invested assets are based on the financial
statements of the underlying funds.

INVESTMENT CONTRACTS

The fair values for the Company's liabilities under investment-type
insurance contracts, including individual and group annuities, are estimated
using discounted cash flow calculations, based on interest rates currently
being offered for similar contracts with maturities consistent with those
remaining for the contracts being valued.

POLICY ACCOUNT BALANCES

The fair values of the Company's liabilities for insurance contracts other
than investment-type contracts are not required to be disclosed. However,
the fair values of liabilities under all insurance contracts are taken into
consideration in the Company's overall management of interest rate risk,
such that the Company's exposure to changing interest rates is minimized
through the matching of investment maturities with amounts due under
insurance contracts.

Additional data with respect to fair values of the Company's investments is
disclosed is Note 2.

F-29
<PAGE>
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The carrying amount and fair value of the Company's financial instruments
are summarized as follows:

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998 AT DECEMBER 31, 1997
-------------------------- ----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Fixed maturities.................... $ 2,506,333 $ 2,506,333 $2,143,658 $2,143,658
Equity securities................... 1 1 3,187 3,187
Policy loans........................ 53,153 53,153 49,331 49,331
Short-term investments.............. 38,359 38,359 57,956 57,956
Other invested assets............... 50,760 50,760 43,747 43,747
Individual and group annuities...... 100,748 99,988 131,549 131,297
</TABLE>

16. DISCONTINUED OPERATIONS

On December 31, 1993, the Company discontinued its Group Medical insured and
administrative services line of business. Substantially all of the insured
operating assets and future policy liabilities, as of December 31, 1993, were
ceded to Liberty Mutual effective January 1, 1994, until the termination date of
the contracts. After termination there is no additional insurance risk
associated with this particular line of business and all insured operating
assets and future policy liabilities will be extinguished.

17. IMPACT OF YEAR 2000 (UNAUDITED)

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. As a result, those
computer programs have time-sensitive software that recognize the date "00" as
the year 1900 rather than the Year 2000. This may cause a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in similar
normal business activities.

The Company has allocated significant resources to examining all relevant
internal computing systems to identify areas that may require changes. Efforts
include an examination of both internally developed and purchased software
applications to ensure vendor Year 2000 compliance and working with major
vendors to ensure Year 2000 compliance. As of December 31, 1998, the Company had
substantially completed their Year 2000 efforts and will continue monitoring and
working toward infrastructure readiness throughout 1999.

F-30
<PAGE>

PART II - OTHER INFORMATION

UNDERTAKING TO FILE REPORTS

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

REPRESENTATION AS TO FEES AND CHARGES

Liberty Life Assurance Company of Boston hereby represents that the fees
and charges deducted under the Flexible Premium Variable Life Insurance Contract
hereby registered by this Registration Statement in the aggregate are reasonable
in relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by Liberty Life Assurance Company of Boston.

REPRESENTATION PURSUANT TO RULE 6e-3(T)

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

UNDERTAKING AS TO INDEMNIFICATION

Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant, 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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.

CONTENTS OF THIS REGISTRATION STATEMENT

This Registration Statement consists of the following papers and documents:

Facing Sheet

i
<PAGE>

Cross-Reference Sheet
Prospectus consisting of ___ pages
Undertaking to File Reports
Undertaking As To Indemnification
Representation As To Fees and Charges
Representation Pursuant to Rule 6e-3(T)
Signature Pages
Exhibits

EXHIBIT LIST

1. Exhibits required by paragraph A of the instructions as to Exhibits of Form
N-8B-2

(1) Resolution of the Board of Directors of Liberty Life Assurance Company
of Boston authorizing establishment of LLAC Variable Account(3)

(2) Custodian Agreement (not applicable)

(3) (a) Form of Distribution Agreement(3)

(b) Form of Broker-Dealer and General Agent Sales Agreement (3)

(4) Other Agreements between the depositor, principal underwriter, and
custodian with respect to Registrant or its securities (not
applicable)

(5) (a) Specimen Contract (filed herewith)

(b) Specimen Disability Waiver of Monthly Deduction Benefit
Agreement(4)

(d) Specimen Disability Waiver of Specified Monthly Premium Benefit
Agreement(4)

(e) Specimen Primary Insured Term Insurance Benefit Agreement(4)

(f) Specimen Additional Insured Term Insurance Benefit Agreement(4)

(g) Specimen Accidental Death and Dismemberment Benefit Agreement(4)

(h) Specimen Accelerated Death Benefit Agreement(4)

(6) (a) Articles of Incorporation of Liberty Life Assurance Company
of Boston, as amended(1)

(b) By-laws of Liberty Life Assurance Company of Boston(2)

(7) Not applicable

(8) Form of Participation Agreements
(a)(1) Form of Participation Agreement By and Among AIM Variable
Insurance Funds, Inc., AIM Distributors Inc., Liberty Life
Company of Boston, on behalf of itself and its Accounts, and
Liberty Life Distributors, LLC(5)

ii
<PAGE>

(a)(2) Form of Administrative Service Agreement between Liberty
Assurance Company of Boston and AIM Advisers Inc.(5)

(b)(1) Form of Participation Agreement By and Among Liberty Life
Assurance Company of Boston, Liberty Variable Investment
Trust, Liberty Advisory Services Corp. and Keyport
Financial Services Corp. (filed herewith)

(b)(2) Form of Administrative Services Agreement By and Between
Liberty Advisory Services Corp. and Liberty Life Assurance
Company of Boston (filed herewith)

(c)(1) Form of Participation Agreement By and Among Liberty Life
Assurance Company of Boston, Dreyfus Variable Investment Fund,
The Dreyfus Socially Responsible Growth Fund, Inc., and
Dreyfus Life and Annuity Index Fund, Inc. (d/b/a Dreyfus Stock
Index Fund)(5)

(c)(2) Form of Administrative Services Agreement By and Between The
Dreyfus Corporation and Liberty Life Assurance Company of
Boston(5)

(d)(1) Form of Participation Agreement By and Among MFS Variable
Insurance Trust, Liberty Life Assurance Company of Boston, and
Massachusetts Financial Services Company(5)

(d)(2) Form of Administrative Services Agreement By and Between
Massachusetts Financial Services Company and Liberty Life
Assurance Company of Boston(5)

(e)(1) Form of Participation Agreement By and Among Keyport Financial
Services Corp., Liberty Life Assurance Company of Boston,
Stein Roe Variable Investment Trust, Stein Roe & Farnham, Inc.,
and Keyport Financial Services Corp. (filed herewith)

(e)(2) Form of Administrative Services Agreement By and Between Stein
Roe & Farnham, Inc., and Liberty Life Assurance Company of
Boston (filed herewith)

(9) Other Material Contracts (not applicable)

(10) (a) Specimen Application (3)

2. Opinion and Consent of Counsel (filed herewith)

3. All financial statements omitted from the Prospectus (not applicable)

4. Not applicable

5. Financial Data Schedule (not applicable)

6. Procedures memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) (filed
herewith)

7. Actuarial Opinion and Consent (filed herewith)

8. Consent of Independent Accountants (filed herewith)

9. Form of Illustrations (filed herewith)

10. Table of Surrender Charge Factors and Percentages (filed herewith)

iii
<PAGE>

(1) Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement of Variable Account J of Liberty Life Assurance Company of Boston
(File No. 333-29811; 811-08269), filed on or about July 17, 1997.

(2) Incorporated by reference to Registration Statement of Variable Account J
of Liberty Life Assurance Company of Boston (File No. 333-29811;
811-08269), filed on or about June 18, 1997.

(3) Incorporated by reference to Registration Statement of LLAC Variable
Account on Form S-6 (File No. 333-65957), filed October 21, 1998.

(4) Incorporated by reference to Registration Statement of LLAC Variable
Account on Form S-6 (File No. 333-76931), filed April 23, 1999.

(5) Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement of LLAC Variable Account on Form S-6 (File No. 333-65957), filed
May 14, 1999.

iv
<PAGE>

SIGNATURES

As required by the Securities Act of 1933, the registrant has duly
caused this Amendment to the Registration Statement to be signed on its
behalf in the City of Boston, Commonwealth of Massachusetts, on the 27th of
August, 1999.

LLAC VARIABLE ACCOUNT
(Registrant)

BY: LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
(Depositor)

By: /s/ Elliot J. Williams
----------------------------
Elliot J. Williams
Treasurer

As required by the Securities Act of 1933, this Amendment to the
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

<TABLE>
<S> <C> <C>
/s/ Gary L. Countryman
- ----------------------------
Gary L. Countryman Chairman of the Board August 27, 1999

/s/ Edmund F. Kelly
- ----------------------------
Edmund F. Kelly President, Chief Executive Officer August 27, 1999
and Director

/s/ Elliot J. Williams
- ----------------------------
Elliot J. Williams Treasurer August 27, 1999

/s/ J. Paul Condrin
- ---------------------------- Director August 27, 1999
J. Paul Condrin

v
<PAGE>

/s/ John B. Conners
- ----------------------------
John B. Conners Director August 27, 1999

/s/ A. Alexander Fontanes
- ----------------------------
A. Alexander Fontanes Director August 27, 1999

/s/ Christopher C. Mansfield
- ----------------------------
Christopher C. Mansfield Director August 27, 1999

/s/ Jean M. Scarrow
- ----------------------------
Jean M. Scarrow Director August 27, 1999

/s/ Morton E. Spitzer
- ----------------------------
Morton E. Spitzer Director August 27, 1999
</TABLE>

vi
<PAGE>

EXHIBIT INDEX

1.3(c) Schedule of Sales Commissions

1.5(a) Specimen Contract

1.8(b)(1) Form of Participation Agreement By and Among Liberty Life Assurance
Company of Boston, Liberty Variable Investment Trust, Liberty
Advisory Services Corp. and Keyport Financial Services Corp.
(filed herewith)

1.8(b)(2) Form of Administrative Services Agreement By and Between Liberty
Life Assurance Company of Boston and Liberty Advisory Services
Corp. (filed herewith)

1.8(e)(1) Form of Participation Agreement By and Among Keyport Financial
Services Corp. Liberty Life Assurance Company of Boston, Stein
Roe Variable Investment Trust, Stein Roe & Farnham, Inc. and
Keyport Financial Services Corp. (filed herewith)

1.8(e)(2) Form of Administrative Services Agreement By and Between Liberty
Life Assurance Company of Boston and Stein Roe & Farnham, Inc.
(filed herewith)

2 Opinion and Consent of Counsel

6 Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii)

7 Actuarial Opinion and Consent

8 Consent of Independent Accountants

9 Form of Illustrations

10 Table of Surrender Charge Factors and Percentages

vii

<PAGE>

Exhibit 1.(3)(c)

SCHEDULE

COMPENSATION

This schedule is attached to and made a part of the most current executed
Broker-Dealer and General Agent Selling Agreement (the "Agreement") between and
among Liberty Life Assurance Company of Boston ("Liberty Life"), Liberty Life
Distributors LLC ("Distributor"), ____________________ ("Broker-Dealer") and
_______________ ("General Agent").

The compensation for the variable life insurance and annuity products (the
"Contracts") referred to in the Agreement is as follows:

FOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACTS, written on Form
FPV-98150, and any variations of these forms as may be required by insurance
regulatory authorities:

1. NEW BUSINESS COMMISSION AND EXPENSE REIMBURSEMENT ALLOCATION:

DISTRIBUTOR shall receive commissions in the following percentages for
each Contract for which Broker-Dealer is the broker-of-record:

First Contract Year: 30% of the total Premiums paid up to the twelve
times the commissionable monthly Premium and 4% of any Premium paid
in excess of that amount.(1)

Second and Third Contract Years: 4% of each Premium paid.

Fourth through Fifteenth Contract Years: 3% of each Premium paid.

Sixteenth+ Contract Years: 2% of each Premium paid.

However, no compensation shall be paid on Premium received from a Contract owner
when an existing life insurance or annuity contract issued by Liberty Life on
the same life has lapsed, been terminated or surrendered, been continued on a
nonforfeiture option, or been changed, modified or converted in any manner
within six months of the date of the application for the new Contract or twelve
months after the issue date of the new Contract, except to the extent that the
first year's annualized premium for the new Contract exceeds the first year's
annualized premium from the existing contract.

2. RETURN OF COMPENSATION IN SPECIFIED CIRCUMSTANCES

The following rules regarding "chargebacks" shall apply in connection with
the offer and sale of Contracts under this Agreement:

a. In the event that:

i. a Premium is returned because Liberty Life rejects the
application for the Contract under which such Premium has been paid or
because the Premium, or the related application, is not timely received by
Liberty Life as required herein, or a refund is made because a purchaser
exercises his or her free

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

(1)In adddition, an expense reimbursement allowance may be paid equal to
up to 25% of the total Premiums paid in the first Contract Year up to twelve
times the commissionable monthly Premium.

<PAGE>

look right under a Contract; or

ii. within the first twelve months after the date on which a
Contract was issued, the purchaser surrenders the Contract, or otherwise
rescinds the Contract, or the Contract lapses;

then, in any such event, Broker-Dealer shall not be entitled to any compensation
with respect to such Contract, and any and all compensation previously received
by Broker-Dealer based on all Premiums paid into the Contract shall be repaid to
Distributor, and Broker-Dealer shall pay any loss incurred as a result of a
Premium being returned which was not timely received or for which an application
was not timely received by Liberty Life.

b. If and to the extent that any loans or partial withdrawals are
made with respect to any Contract during the first year after issuance, the
compensation due to Broker-Dealer shall be recomputed as though the amount of
the loan or partial withdrawal had never been paid as a Premium.

c. If and to the extent that a Contract is exchanged for another
contract during the first contract year of the Contract, the compensation due to
Broker-Dealer shall be recomputed as though the Contract had never been issued.

Distributor shall have the right to collect from Broker-Dealer or to withhold
from future payments of compensation due to Broker-Dealer under this Agreement
an amount equal to any reduction in compensation effected by this Schedule, to
the extent permitted by applicable law; provided, however, that this option on
the part of Distributor shall not prevent both Distributor and Broker-Dealer or
either of them from pursuing any other means or remedies available to them to
recover such compensation. For purposes of this Schedule, the payment of a death
benefit pursuant to the terms of a Contract shall not be deemed a surrender or
rescission by a purchaser.

<PAGE>

EXHIBIT 1.5(a)

[LOGO]

- --------------------------------------------------------------------------------
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
A MEMBER OF THE LIBERTY MUTUAL GROUP

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

Home Office: 175 Berkeley Street, P.O. Box 140, Boston, Massachusetts
02117-0140.
Service Center: 100 Liberty Way, Dover, New Hampshire 03820-5808

READ THIS INSURANCE CONTRACT CAREFULLY

RIGHT TO RETURN
This is a legal contract between You and the Company. If You are not satisfied,
You may return it to Us or Your agent within 10 days of its receipt and any
premium will be refunded.

Liberty Life Assurance Company of Boston, a stock Company, will pay the benefits
provided in this contract, subject to its terms and conditions. The CONTRACT
GUIDE on the inside of the front cover shows where the major contract provisions
can be found.

We have issued this flexible premium variable life insurance contract in
consideration of Your application and the receipt of Your initial premium.

THE AMOUNT AND DURATION OF THE DEATH BENEFIT AND OTHER VALUES PROVIDED BY THIS
CONTRACT ARE BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, THE
FIXED ACCOUNT EARNINGS AND CONTRACT CHARGES. SEPARATE ACCOUNT VALUES ARE
VARIABLE AND MAY INCREASE OR DECREASE. THESE VALUES ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THE DEATH BENEFIT IS DESCRIBED ON PAGE 3.

Signed for the Company.

/s/ Barry S. Gilvan /s/ Edmund F. Kelly
SECRETARY PRESIDENT

CONTRACT DESCRIPTION

This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT.
The amount and frequency of payments are flexible.
The Death Benefit is payable if the Insured dies while this contract is in
force.
Death Benefit and Account Value may vary with investment and earnings experience
and contract charges. This contract is non-participating.

FPV-98150

<PAGE>

<TABLE>
<CAPTION>
Page
<S> <C> <C>
CONTRACT ASSIGNMENT........................................................6
GUIDE CONTRACT LOANS...................................................12
CONTRACT VALUES...................................................8
CONTRACT WITHDRAWAL..............................................13
DEATH BENEFIT.....................................................3
DEFINITIONS.......................................................2
GENERAL CONTRACT PROVISIONS.......................................6
GRACE PERIOD......................................................5
INCONTESTABILITY AND SUICIDE......................................7
OWNER AND BENEFICIARY.............................................6
PAYMENT OF PROCEEDS..............................................14
PAYMENT OF PROCEEDS OPTIONS......................................14
REINSTATEMENT.....................................................6
SEPARATE ACCOUNT PROVISIONS......................................11
PREMIUMS..........................................................5
TABLE OF GUARANTEED MAXIMUM MONTHLY
COST OF INSURANCE RATES................... Contract Information page
TABLE OF WITHDRAWAL CHARGES............... Contract Information page
ANY ADDITIONAL AGREEMENTS, ENDORSEMENTS
AND A COPY OF THE APPLICATION APPEAR
AFTER PAGE.......................................................16
</TABLE>

DEFINITIONS This is what We mean when We use the following words in Your
contract:

ACCUMULATION UNIT. An accounting unit of measurement which We use
to calculate the value of a sub-account.

ATTAINED AGE. The Insured's age on his or her last birthday.

CONTRACT DATE. The date when insurance coverage becomes effective.

INDEBTEDNESS. Any unpaid contract loan and unpaid loan interest.

LOAN ACCOUNT. An account established for amounts transferred from
the sub-accounts or the Fixed Account as security for outstanding
Indebtedness.

MONTHLY DATE. The same day in each month as the Contract Date.
The day of the month on which the Monthly Deduction is taken from
Your Account Value.

NET DEATH BENEFIT. The Death Benefit, less any Indebtedness.

NET PREMIUM. The premium paid, less any premium expense charge.

PROCEEDS. All or part of the amount payable under any provision of
this contract.

WRITTEN REQUEST. A notice in writing, satisfactory to Us, placed
on file at Our Service Center.

VALUATION DAY. The day when a sub-account is valued. This occurs
every day We are open and the New York Stock Exchange is open for
trading.

VALUATION PERIOD. The time period between the close of business on
successive Valuation Days.

WE, OUR, US, THE COMPANY. Liberty Life Assurance Company of Boston.

YOU, YOUR. The Owner of this contract, who may be someone other
than the Insured.

FPV-98150 2

<PAGE>

CONTRACT INFORMATION

<S> <C> <C> <C>
Insured [John Doe] Contract Number [NV-12345678]

Issue Age/Sex [35 ]/[Male] Contract Date [June 1, 2000]

Rating Class [Standard] [Non-Tobacco] Loan Interest Rate [6.00%]

Face Amount [$100,000.00] Minimum Face Amount [$50,000]

Initial Premium [$300.00] Minimum Face Amount Increase [$25,000]

Planned Premium [$1,200.00] Death Benefit Option [1]

Planned Premium Frequency [Annual] Initial Net Premium
Allocation Limit [$2,000]
</TABLE>

Three Year Guaranteed Coverage Monthly Premium [$ XXX.XX]
Three Year Guaranteed Coverage Period - The Three Year Guaranteed Coverage
Period begins on the Contract Date and is in effect until the end of
the third contract year.

Limited Guaranteed Coverage Monthly Premium [$ 84.92]
Limited Guaranteed Coverage Period - The Limited Guaranteed Coverage Period
begins on the Contract Date and is in effect until
the Insured's Attained Age [75.]

Lifetime Guaranteed Coverage Monthly Premium [$ 109.92]
Lifetime Guaranteed Coverage Period - The Lifetime Guaranteed Coverage Period
begins on the Contract Date and is in effect for the duration of the contract.

Coverage may end if no premiums are paid after the Initial Premium or if
subsequent premiums are not sufficient to cover the Monthly Deduction.

<S><C>
INTEREST RATES
Guaranteed Annual Interest Rate For the Fixed Account [4.00%]
Guaranteed Monthly Equivalent Interest Rate [0.32737%]

CONTRACT CHARGES
Contract Fee [$6.00] per month. Withdrawal Charge on Withdrawal as defined on page 13.
Cost of Insurance as defined on page 9. Premium Expense Charge [5.5%] of each premium payment.
Separate Account Expense Charge [ .60%]
</TABLE>

TABLE OF WITHDRAWAL CHARGES
This table applies in the event of a
Withdrawal in the first [10] contract years.

Contract Withdrawal Contract Withdrawal
Year Charge Year Charge
<S> <C> <C> <C>
[1 $959.00 6 $671.00

2 $959.00 7 $575.00

3 $959.00 8 $480.00

4 $863.00 9 $384.00

5 $767.00 10 192.00

11 and $0.00]
</TABLE>

MORTALITY TABLE
1980 Commissioners Standard Ordinary, Age Last Birthday, Smoker or Non-smoker

<PAGE>

Contract Number [NV-12345678]
CONTRACT INFORMATION (continued)

Additional Agreements

Accelerated Death Benefit Agreement
Issue Date: [June 1, 1999]

Additional Insured Benefit Agreement
Additional Insured: [Jane Doe]
Face Amount: [$100,000.00]
Issue Age/Sex [35 ]/[Female]
Rating Class [Standard] [Non-Tobacco]
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2064]

Primary Insured Term Insurance Benefit Agreement
Primary Insured: [John Doe]
Face Amount: [$100,000.00]
Issue Age/Sex [35 ]/[Male]
Rating Class [Standard] [Non-Tobacco]
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2064]

Accidental Death and Dismemberment Benefit Agreement
Amount of Accidental Death Benefit: [$100,000.00]
Monthly Deduction [$7.00]
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2034]

Children's Protection Benefit Agreement
Units: [5]
Monthly Deduction: [$2.50]
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2034]

Disability Waiver of Monthly Deductions Benefit Agreement
Rating Factor: [1.00]
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2029]

Disability Waiver of Monthly Specified Premium Benefit Agreement
Specified Monthly Premium Amount: [$100.00]
Monthly Deduction: [$6.00]
The Monthly Deduction is based on a rating factor of [1.00].
Issue Date: [June 1, 1999]
Termination Date: [June 1, 2029]

<PAGE>

Contract Number [NV-12345678]
CONTRACT INFORMATION (continued)

TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

Attained Monthly Cost of Attained Monthly Cost of Attained Monthly Cost of
Age Insurance Rate Age Insurance Rate Age Insurance Rate

<S> <C> <C> <C> <C> <C>
Male Male Male
0 _ 35 0.1442 70 3.0703
1 _ 36 0.1517 71 3.4033
2 _ 37 0.1617 72 3.7600
3 _ 38 0.1726 73 4.1934
4 _ 39 0.1843 74 4.6701

5 _ 40 0.1984 75 5.1801
6 _ 41 0.2134 76 5.7192
7 _ 42 0.2293 77 6.2835
8 _ 43 0.2468 78 6.8762
9 _ 44 0.2660 79 7.5161

10 _ 45 0.2876 80 8.2238
11 _ 46 0.3110 81 9.0181
12 _ 47 0.3360 82 9.9157
13 _ 48 0.3635 83 10.9129
14 _ 49 0.3935 84 11.9904

15 _ 50 0.4277 85 13.1242
16 _ 51 0.4669 86 14.3000
17 _ 52 0.5120 87 15.5000
18 _ 53 0.5637 88 16.7191
19 _ 54 0.6213 89 17.9749

20 _ 55 0.6855 90 19.2858
21 _ 56 0.7556 91 20.6825
22 _ 57 0.8299 92 22.2180
23 _ 58 0.9125 93 24.0437
24 _ 59 1.0052 94 26.5035

25 _ 60 1.1088 95 30.2074
26 _ 61 1.2240 96 36.3581
27 _ 62 1.3569 97 47.2118
28 _ 63 1.5073 98 66.2071
29 _ 64 1.6745 99 82.5000

30 _ 65 1.8577
31 _ 66 2.0559
32 _ 67 2.2685
33 _ 68 2.4996
34 _ 69 2.7560
</TABLE>

<PAGE>

Contract Number [NV-12345678]
CONTRACT INFORMATION (continued)

PRIMARY INSURED TERM INSURANCE BENEFIT AGREEMENT
TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

Attained Monthly Cost of Attained Monthly Cost of Attained Monthly Cost of
Age Insurance Rate Age Insurance Rate Age Insurance Rate

<S> <C> <C> <C> <C> <C>
Male Male Male
[0 _ 35 0.1442 70 3.0703
1 _ 36 0.1517 71 3.4033
2 _ 37 0.1617 72 3.7600
3 _ 38 0.1726 73 4.1934
4 _ 39 0.1843 74 4.6701

5 _ 40 0.1984 75 5.1801
6 _ 41 0.2134 76 5.7192
7 _ 42 0.2293 77 6.2835
8 _ 43 0.2468 78 6.8762
9 _ 44 0.2660 79 7.5161

10 _ 45 0.2876 80 8.2238
11 _ 46 0.3110 81 9.0181
12 _ 47 0.3360 82 9.9157
13 _ 48 0.3635 83 10.9129
14 _ 49 0.3935 84 11.9904

15 _ 50 0.4277 85 13.1242
16 _ 51 0.4669 86 14.3000
17 _ 52 0.5120 87 15.5000
18 _ 53 0.5637 88 16.7191
19 _ 54 0.6213 89 17.9749

20 _ 55 0.6855 90 19.2858
21 _ 56 0.7556 91 20.6825
22 _ 57 0.8299 92 22.2180
23 _ 58 0.9125 93 24.0437
24 _ 59 1.0052 94 26.5035

25 _ 60 1.1088 95 30.2074
26 _ 61 1.2240 96 36.3581
27 _ 62 1.3569 97 47.2118
28 _ 63 1.5073 98 66.2071
29 _ 64 1.6745 99 82.5000

30 _ 65 1.8577
31 _ 66 2.0559
32 _ 67 2.2685
33 _ 68 2.4996
34 _ 69 2.7560
</TABLE>

These rates are based on the Mortality Table listed on the Contract Information
Page.

<PAGE>

Contract Number [NV-12345678]
CONTRACT INFORMATION (continued)

ADDITIONAL INSURED TERM INSURANCE BENEFIT AGREEMENT
TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

Attained Monthly Cost of Attained Monthly Cost of Attained Monthly Cost of
Age Insurance Rate Age Insurance Rate Age Insurance Rate
Male Male Male

<S> <C> <C> <C> <C> <C>
0 _ 35 0.1442 70 3.0703
1 _ 36 0.1517 71 3.4033
2 _ 37 0.1617 72 3.7600
3 _ 38 0.1726 73 4.1934
4 _ 39 0.1843 74 4.6701

5 _ 40 0.1984 75 5.1801
6 _ 41 0.2134 76 5.7192
7 _ 42 0.2293 77 6.2835
8 _ 43 0.2468 78 6.8762
9 _ 44 0.2660 79 7.5161

10 _ 45 0.2876 80 8.2238
11 _ 46 0.3110 81 9.0181
12 _ 47 0.3360 82 9.9157
13 _ 48 0.3635 83 10.9129
14 _ 49 0.3935 84 11.9904

15 _ 50 0.4277 85 13.1242
16 _ 51 0.4669 86 14.3000
17 _ 52 0.5120 87 15.5000
18 _ 53 0.5637 88 16.7191
19 _ 54 0.6213 89 17.9749

20 _ 55 0.6855 90 19.2858
21 _ 56 0.7556 91 20.6825
22 _ 57 0.8299 92 22.2180
23 _ 58 0.9125 93 24.0437
24 _ 59 1.0052 94 26.5035

25 _ 60 1.1088 95 30.2074
26 _ 61 1.2240 96 36.3581
27 _ 62 1.3569 97 47.2118
28 _ 63 1.5073 98 66.2071
29 _ 64 1.6745 99 82.5000
30 _ 65 1.8577
31 _ 66 2.0559
32 _ 67 2.2685
33 _ 68 2.4996
34 _ 69 2.7560
</TABLE>

These rates are based on the Mortality Table listed on the Contract Information
page.

<PAGE>

DEATH THE BENEFIT
BENEFIT If the Insured dies while this contract is in force, We will pay a
Death Benefit to the Beneficiary. The amount of the Death Benefit
will depend on the Death Benefit Option in effect on the date of
death. We will reduce the Death Benefit by any Indebtedness.

The Death Benefit will be determined on the date We receive
due proof of the Insured's death.

There are two Death Benefit Options available under this contract:
Option 1 and Option 2. The Death Benefit Option selected on the
application is shown on the Contract Information page. You may
change that Option while this contract is in force, in accordance
with the Contract Change section.

DEATH BENEFIT OPTIONS
Under Option 1, the Death Benefit will be the greater of:

- the Face Amount; or
- a percentage, shown below, of the Account Value.

Under Option 2, the Death Benefit will be the greater of:

- the Face Amount plus the Account Value; or
- a percentage shown below, of the Account Value.

The Face Amount is shown on the Contract Information page. This
amount may be changed in accordance with the Contract Change
section.

Under either Death Benefit Option, the percentage depends on the
Insured's Attained Age.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Attained Account Attained Account Attained Account
Age Value % Age Value % Age Value %
<S> <C> <C> <C> <C> <C> <C>
40 & less 250 56 146 72 111
41 243 57 142 73 109
42 236 58 138 74 107
43 229 59 134 75-90 105
44 222 60 130 91 104
45 215 61 128 92 103
46 209 62 126 93 102
47 203 63 124 94 & later 101
48 197 64 122
49 191 65 120
50 185 66 119
51 178 67 118
52 171 68 117
53 164 69 116
54 157 70 115
55 150 71 113
--------------------------------------------------------------------------------------------
</TABLE>

INTEREST ON DEATH BENEFIT
We will add interest to any Death Benefit payable in one sum as
required by applicable state law.

FPV-98150 3

<PAGE>

GUARANTEED GUARANTEED DEATH BENEFIT
DEATH This Contract includes three coverage guarantees:
BENEFIT - Three-Year Guaranteed Coverage;
- Limited Guaranteed Coverage; and
- Lifetime Guaranteed Coverage

While a guarantee is in effect and You have no outstanding
Indebtedness, Your Contract will not lapse if the Cash Value is
insufficient to pay the Monthly Deduction.

Each guarantee terminates on the date specified on the Contract
Information page. To keep a guarantee in effect until its
termination date, You must pay the corresponding amount of premiums.
If You fail to pay sufficient premiums, one or more guarantees will
terminate before the specified date. Even if the guarantees
terminate, however, Your Contract will stay in force provided that
the Surrender Value is sufficient to pay the Monthly Deduction.

On each Monthly Date We will determine separately for each guarantee
whether You have paid sufficient premiums to keep each guarantee in
effect.

If there is a Face Amount increase or decrease, or if there is a
change in the Death Benefit Option, Three-Year Guaranteed
Coverage, the Limited Guaranteed Coverage and Lifetime Guaranteed
Coverage Monthly Premiums will change prospectively from the date
of the change.

To keep a guarantee in effect, Your total premiums paid as of that
Monthly Date must equal or exceed the sum of:

- all applicable Guaranteed Coverage Monthly Premiums for
each month, from the Contract Date up to and including the
current month; plus
- the amount of any partial withdrawals.

If Your total premiums are insufficient to keep a guarantee in
effect, We will notify You in writing. You may reactivate the
Limited Guaranteed Coverage and Lifetime Guaranteed Coverage
guarantees by paying the premium insufficiency within one year of
Our notice to You. The Three-Year Guaranteed Coverage Guarantee
may not be reinstated.

Even if You have paid sufficient premiums to keep one or more
Coverage Guarantee in effect, if You have outstanding Indebtedness,
Your Contract will enter the Grace Period if Your Surrender Value is
insufficient to cover Your Monthly Deductions.

DEATH DEATH BENEFIT AT ATTAINED AGE 100
BENEFIT If the Insured is living and the contract is in force when the
AT ATTAINED Insured reaches Attained Age 100, the Death Benefit will
AGE 100 equal 101% of the Account Value of the contract. If the Lifetime
Guaranteed Coverage Period is still in effect at Attained Age
100, the Death Benefit will equal the greater of the Face Amount or
101% of the Account Value.

FPV-98150 4

<PAGE>

After Attained Age 100, no further premium payments will be required
nor will they be accepted and the Monthly Deductions will no longer
include a cost of insurance charge.

PAYMENT OF PAYMENT OF PREMIUMS
PREMIUMS Premiums are payable during the Insured's lifetime beginning on the
Contract Date. A premium expense charge will be deducted from each
premium payment. All premiums are payable at Our Service Center or
to an authorized agent. We will give You a receipt upon request.

Planned premiums are payable every 12 months, 6 months, 3 months or
monthly from the Contract Date according to the payment interval and
payment method selected in the application. The initial planned
premium is shown on the Contract Information page. You may change
the amount or interval of a planned premium at any time by Written
Request. Any change is subject to Our minimum premium requirements.
We also reserve the right to limit the amount of any increase in a
planned premium.

UNSCHEDULED PREMIUM PAYMENTS
You may make unscheduled premium payments while the contract is in
force provided:

- the payment is at least $50.00; and
- the payment will not disqualify this contract as a
Life Insurance Contract under the Internal Revenue
Code as it now exists or may later be amended.

If any unscheduled premium payment increases the Death Benefit by
more than it increases the Account Value, We will require evidence
of insurability satisfactory to Us.

While there is any Indebtedness on the contract, any payments in
excess of the total planned premiums for the contract year will be
treated as repayments of the Indebtedness and not as premiums.

PAYMENT BY PRE-AUTHORIZED CHECK (PAC)
We may be authorized, by Written Request, to draw checks against or
make electronic withdrawals from a particular bank account for the
purpose of paying premiums. While We are so authorized, premiums
will be due every contract month or at any other interval available.

You may terminate this premium payment arrangement at any time by
Written Request. We also have the right to terminate this
arrangement at any time. If it is terminated, a Premium Reminder
will be sent every 3 months subject to Our minimum premium
requirements. That interval may be changed by Written Request.

PREMIUM REMINDERS
After the first premium has been paid, We will send You a premium
reminder for each planned premium according to the payment interval
then in effect unless You have chosen to pay by Pre-Authorized
Check. We reserve the right to stop sending premium reminders if no
planned premium payments are made during 24 consecutive calendar
months. If premium payments are resumed, We will start sending
premium reminders again.

PREMIUMS PREMIUM ALLOCATION
We will allocate Your initial Net Premium, and any other Net Premium
received during the Right to Return period, to the sub-accounts in
accordance with Your written instructions. If the total portion of
such Net Premiums to be allocated to the sub-accounts exceeds the
Initial Premium Allocation Limit shown on the Contract Information
page, We may temporarily allocate the portion in excess of the
Initial Net Premium Allocation Limit to the Fixed Account until
after the end of the Right to Return Period, when We will allocate
it to the sub-accounts in accordance with Your instructions.

FPV-98150 5

<PAGE>

After the Right to Return period, Net Premiums will be allocated as
described in the Investment Allocations provision on page 11.

GRACE PERIOD
If the Guaranteed Death Benefit provision is not in effect and the
Surrender Value is insufficient to pay the Monthly Deduction, a
Grace Period of 61 days will be permitted for payment of a premium
sufficient to continue the contract in force. We will send a notice
to You at Your last known address requesting the amount due at least
30 days before the Grace Period ends. If the required amount is not
received within 61 days, the contract will terminate without value.
If the Insured dies during a Grace Period, the Death Benefit will be
reduced by any Monthly Deductions and any Loan Interest due but not
paid.

REINSTATEMENT
This contract may be reinstated within five years of the end of the
Grace Period and prior to the Insured's Attained Age 100 if We
receive:

- Your Written Request to reinstate the contract;
- evidence of insurability satisfactory to Us; and
- a premium equal to at least three Monthly Deductions following
the effective date of reinstatement.

If the Indebtedness is not repaid, such Indebtedness will also be
reinstated.

LIFE LIFE INSURANCE QUALIFICATION
INSURANCE This contract is intended to qualify for treatment as a life
QUALI- insurance contract under the Internal Revenue Code as it now exists
FICATION or may later be amended. We reserve the right to amend this
contract to comply with future changes in the Code and its
Regulations. Any amendments will be made by an agreement approved by
the proper regulatory authorities. We will promptly provide You with
a copy of any amendment.

We reserve the right to refuse premium payments and to return those
premium payments, in whole or in part, if accepting them would
disqualify this contract from favorable tax treatment under the
Code. A premium payment will not be refused if the payment will
prevent the contract from terminating.

GENERAL YOUR CONTRACT
CONTRACT Your contract is issued in consideration of the application and the
PROVISIONS initial premium. All statements made in the application
are representations and not warranties. No statement made by or on
behalf of the Insured will be used by Us to contest this contract,
or defend a claim under it, unless it is in the application.

Any additional agreements are shown on the Contract Information
page. These agreements are attached to and made a part of this
contract. This contract, the application and any subsequent
applications contain the entire contract between You and Us.

WAIVER
Only an officer of the Company can waive or change any provision of
this contract, and only by means of a written instrument.

MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, any Proceeds
will be adjusted to that amount which would be purchased by the most
recent Cost of Insurance Rate at the correct age and sex. Age refers
to the Insured's age last birthday on the Contract Date.

FPV-98150 6

<PAGE>

ASSIGNMENT
Your contract may be assigned. We will not be on notice of any
assignment until a duplicate of the original assignment is filed at
Our Service Center. We assume no responsibility for the validity or
effect of any assignment, and may rely solely on the assignee's
statement of interest.

CONTRACT ANNIVERSARY
Contract months, years and anniversaries will be computed from the
Contract Date.

OWNER AND OWNER
BENEFICIARY The Owner is as named in the application on the Contract Date, and
may be changed from time to time. Unless otherwise provided, the
ownership rights of an individual who dies before the Insured will
belong to the surviving joint owner, or if no joint owner, to the
executors or administrators of that individual's estate. The
ownership rights of a corporation, partnership or fiduciary will
belong to its successors or assigns.

During the Insured's lifetime, the rights and privileges stated in
this contract may be exercised only by the Owner.

BENEFICIARY
The Beneficiary is as named in the application on the Contract Date,
and may be changed from time to time. The interest of any
Beneficiary who dies before the Insured will terminate at the death
of that Beneficiary.

If no Beneficiary designation is in effect at the Insured's death,
or if there is no designated Beneficiary then living, You will be
the Beneficiary. However, if the Insured was the Owner, the
executors or administrators of the Insured's estate will be the
Beneficiary.

CHANGE OF OWNERSHIP OR BENEFICIARY
You may change the Owner or any Beneficiary by Written Request
during the Insured's lifetime. The change will take effect as of the
date the request is signed after We acknowledge receipt in writing,
whether or not You or the Insured is living at the time of
acknowledgment. The change will be subject to any assignment, and to
any payment made or action taken by Us before acknowledgment.

INCONTEST- INCONTESTABILITY AFTER TWO YEARS
ABILITY AND In the absence of fraud, this contract will be incontestable after
SUICIDE it has been in force during the Insured's lifetime;

- with respect to the Face Amount, for two years from the Contract
Date; and
- with respect to each increase in the Face Amount, for two years
from the effective date of that increase.

SUICIDE WITHIN TWO YEARS
If the Insured dies by suicide within two years from the Contract
Date, while sane or insane, the amount payable under this contract
will be limited to the greater of the Account Value less
Indebtedness or the minimum value required by the state where this
contract was issued for delivery.

If the Insured dies by suicide within two years after the effective
date of any increase in Face Amount, while sane or insane, the
amount payable from that increase will be limited to the Monthly
Deductions made in conjunction with such increase.

CONTRACT CHANGES IN THE FACE AMOUNT
CHANGES While this contract is in force, You may request Us to increase or
decrease the Face Amount. Only one such change is allowed in a
contract year and only after the first contract year. We will send
You new Contract Information pages following each change.

FPV-98150 7

<PAGE>

Any increase in the Face Amount is subject to:

- Your written application and evidence of insurability
satisfactory to Us;
- Our issue rules and limits at the time of increase;
- the Minimum Face Amount Increase shown on the Contract
Information page;
- the Cost of Insurance for the increase; and
- a new Table of Withdrawal Charges for the amount of the increase.

An increase will take effect on the Monthly Date on or next
following the date We approve Your application.

The Face Amount may be decreased by Written Request, provided the
remaining Face Amount is not less than the Minimum Face Amount shown
on the Contract Information page. Any decrease will take effect on
the Monthly Date on or next following the date We receive Your
request. Any such decrease and any applicable withdrawal charges
will be applied in the following order:

1. against the most recent increase in the Face Amount;
2. against the next most recent increases successively; then
3. against the Face Amount shown on the Contract Information page.

We will send You new Contract Information pages for each change.

As a result of a decrease in the Face Amount, a proportion of the
withdrawal charge will be deducted from the Account Value. The
proportion will be computed as the decrease in Face Amount, divided
by the Face Amount before the decrease. Future withdrawal charges
will be reduced by the same proportion as determined for each such
decrease. However, any additional withdrawal charges resulting from
an increase in the Face Amount after the date of the partial
withdrawal will not be reduced in this proportion.

We may decline a reduction in the Face Amount if We determine that
it would cause the contract to fail to qualify for treatment as a
Life Insurance Contract under the Internal Revenue Code.

The withdrawal charge is shown on the Contract Information page.

CHANGES IN THE DEATH BENEFIT OPTION
You may change the Death Benefit Option by Written Request. Only one
such change is allowed in a contract year and only after the first
contract year. The change in Option will take effect on the Monthly
Date on or next following the date We approve Your request.

If You change from Option 1 to Option 2, the new Face Amount will be
the Option 1 Death Benefit less the Account Value as of the
effective date of the change. The new Face Amount may not be less
than the Minimum Face Amount shown on the Contract Information page.
Any such change is subject to Your written application and evidence
of insurability satisfactory to Us.

If You change from Option 2 to Option 1, the new Face Amount will be
the Option 2 Death Benefit as of the effective date of the change.

CONTRACT ACCOUNT VALUE
VALUES Your Account Value on the Contract Date is equal to the initial Net
Premium less the Monthly Deduction for the first contract month.

On each Monthly Date, Your Account Value equals:

- the sum of the value of Your Accumulation Units in the
sub-accounts; plus
- Your Account Value in the Fixed Account; plus
- the value of Your Loan Account; minus
- the Monthly Deduction.

FPV-98150 8

<PAGE>

On each Valuation Day, other than a Monthly Date, Your Account Value
equals:

- the sum of the value of Your Accumulation Units in the
sub-accounts; plus
- Your Account Value in the Fixed Account; plus
- the value of Your Loan Account.

CASH VALUE
A Withdrawal Charge will be subtracted from the Account Value to
determine the Cash Value. The Withdrawal Charges are shown on the
Contract Information page.

SURRENDER VALUE
Your Surrender Value is equal to Your Cash Value, minus any
Indebtedness.

ACCOUNT VALUE IN FIXED ACCOUNT
The Account Value in the Fixed Account on the Contract Date is equal
to the initial Net Premium allocated to the Fixed Account less the
proportion of the Monthly Deduction allocated to the Fixed Account
for the first contract month.

On each Monthly Date, the Account Value in the Fixed Account is
equal to:

- the Account Value in the Fixed Account on the preceding Monthly
Date with one month's interest; plus
- any Net Premium allocated to the Fixed Account since the
preceding Monthly Date and interest from the date the Net Premium
is allocated to the Monthly Date; plus
- the Account Values transferred to the Fixed Account since the
preceding Monthly Date and interest from the date the Account
Value is transferred to the Monthly Date; minus
- the Account Values transferred from the Fixed Account since the
preceding Monthly Date and interest from the date the Account
Value is transferred to the Monthly Date; minus
- all withdrawals from the Fixed Account since the preceding
Monthly Date plus interest from the date of the withdrawal to
the Monthly Date; minus
- the portion of the Monthly Deduction allocated to the Account
Value in the Fixed Account, to cover the contract month following
the Monthly Date.

On any date other than a Monthly Date, the Account Value will be
calculated on a consistent basis.

SUB-ACCOUNT VALUES
Amounts allocated to sub-accounts are applied to provide
Accumulation Units in each sub-account. An Accumulation Unit is
used to calculate the value of a sub-account. The number of
Accumulation Units credited to each sub-account is determined by
dividing the amount allocated to a sub-account by the dollar value
of one Accumulation Unit for such sub-account. The number of Your
Accumulation Units is not affected by any subsequent change in the
value of the units. The Accumulation Unit values in each sub-account
may increase or decrease daily.

SUB-ACCOUNT ACCUMULATION UNIT VALUE
The Accumulation Unit value for each sub-account will vary to
reflect the investment experience of the applicable sub-account and
will be determined on each Valuation Day by multiplying the
Accumulation Unit value of the particular sub-account on the
preceding Valuation Day by a net investment factor for that
sub-account for the Valuation Period then ended. The net investment
factor for each sub-account is equal to the net asset value per
share of the corresponding investment at the end of the Valuation
Period (plus the per share amount of any dividend or capital gain
distributions paid by that investment in the Valuation Period then
ended) divided by the net asset value per share of the corresponding
investment at the beginning of the Valuation Period, less the
Separate Account Expense Charge.

FPV-98150 9

<PAGE>

While We are not currently making a provision for current taxes, any
new taxes or increase in taxes attributable to the operations of the
Separate Account, We reserve the right to deduct such a charge from
the Accumulation Unit value.

SUB-ACCOUNT ACCUMULATION VALUE
Your accumulation value in any sub-account equals:

- the number of Your Accumulation Units in that sub-account on the
Valuation Day;
- multiplied by that sub-account's Accumulation Unit value on the
Valuation Day.

EMERGENCY PROCEDURE
With the exception of weekends or holidays, if a national stock
exchange is closed, or trading is restricted due to an existing
emergency as defined by the Securities and Exchange Commission (SEC)
so that We cannot value the sub-accounts, or as otherwise ordered by
the SEC, We may postpone all procedures which require valuation of
the sub-accounts until valuation is possible. Any provision of this
contract which specifies a Valuation Day will be superseded by the
emergency procedure.

COST OF INSURANCE
The Cost of Insurance is determined on the Monthly Date. The cost
for the Face Amount and for each increase in Face Amount is computed
separately. It is computed as follows:

- Divide the Death Benefit on the first day of the
contract month by 1 plus the Guaranteed Monthly
Equivalent Interest Rate shown on the Contract
Information page;
- Reduce the result by the Account Value on that day before
computing the Monthly Deduction for the Cost of Insurance; and
- Multiply the difference by the Cost of Insurance Rate for that
month divided by 1000.

COST OF INSURANCE RATE
The Cost of Insurance Rate is the rate applied to the insurance
under this contract to determine the Cost of Insurance. It is based
on the Attained Age, sex and rating classification of the Insured.
The Cost of Insurance Rate will not be greater than the guaranteed
rates shown in the Table of Guaranteed Maximum Monthly Cost of
Insurance Rates as shown on the Contract Information pages.

MONTHLY DEDUCTION
A Monthly Deduction is made for the Cost of Insurance, Contract Fee
and the cost of any Additional Benefit Agreements. The Monthly
Deduction for a contract month will be calculated by adding:

- the Contract Fee shown on the Contract Information page;
- the Cost of Insurance for the contract month; and
- the Monthly Deduction of any Additional Benefit Agreements.

The Monthly Deduction for a contract month will be allocated among
the Fixed Account and the sub-accounts of the Separate Account in
proportion to the Account Value in each account. When determining
these proportions, the Account Values are used net of any
Indebtedness at the beginning of the month.

INTEREST RATES
The Guaranteed Interest Rate for the Fixed Account is shown on the
Contract Information page. Interest rates are expressed as effective
annual rates. The rate is compounded daily and is used to calculate
Account Values of the Fixed Account. We may credit interest in
excess of the Guaranteed Interest Rate. Such excess interest will be
at Our sole discretion.

The Account Value allocated to the Fixed Account will be guaranteed
and the rate of interest will be guaranteed for at least the balance
of the contract year. We determine interest rates in accordance with
market conditions and other factors. We may change the rate
guaranteed on new allocations at any time. This may cause the
guaranteed interest rate on Account Values at the beginning of a
contract year to differ from the guaranteed rate on values
transferred in at a later

FPV-98150 10

<PAGE>

date. Once We guarantee an interest rate for an amount in the Fixed
Account, We will not change it until the end of the current
guarantee period.

Interest on the Loan Account will be credited on each contract
anniversary. Interest on the portion of the Loan Account
attributable to Preferred Loans will be credited at the Loan
Interest Rate shown on the Contract Information page. Interest
credited on the portion of the Loan Account attributable to all
other Indebtedness will be credited at the Guaranteed Interest Rate
for the Fixed Account, as shown on the Contract Information page.

BASIS OF VALUES
The method used in computing Account Values and reserves in the
Separate Account is in accordance with actuarial procedures that
recognize the variable nature of the Separate Account. A statement
of the method of computing values has been filed with the Insurance
Department of the state in which this contract was issued for
delivery. All contract values are equal to or in excess of the
minimum values required and all comply with the laws of that state.

SEPARATE SEPARATE ACCOUNT
ACCOUNT The assets of the Separate Account will be used to provide values
PROVISIONS and benefits under this contract and any similar policies. The
assets of the Separate Account are owned by Us and cannot be charged
with liabilities which may arise from any other business the Company
may conduct. The assets of the Separate Account are not part of Our
general account. We may transfer to Our general account any assets
of the Separate Account which exceed the reserves and other contract
liabilities of the account. Unless otherwise permitted by law, the
investment policy of the Separate Account will not be changed
without the express or deemed approval of the state where this
contract was issued for delivery.

INVESTMENT ALLOCATIONS
The Separate Account is divided into several sub-accounts. We use
amounts allocated to a sub-account to buy shares or units of the
investment option shown in the prospectus for that sub-account.
During the Right to Return period, Net Premiums are allocated
according to the Premium Allocation provision on page 5.
Subsequently, Net Premiums will be allocated in accordance with
Your written instructions. You may change the allocation of
subsequent Net Premiums.

SUBSTITUTION
We may substitute another underlying investment without Your
consent. Substitution would occur if We determine that the use of
such underlying investment is no longer possible or if We determine
it is no longer appropriate for the purposes of the contract. No
substitution will be made without notice to You and without the
prior approval of the SEC and the state where this contract was
issued for delivery, if required. Should a substitution, addition or
deletion occur, You will be allowed to select from the then current
sub-accounts and substitution may be made with respect to both
existing premiums and the investment of future premiums.

TRANSFERS
You may transfer Account Values among the sub-accounts or from the
sub-accounts into the Fixed Account, upon request. The value
transferred from any sub-account must be at least $250 or the entire
balance, if less. The Account Value remaining in a sub-account after
any transfer must be at least $500. If the balance remaining in a
sub-account as a result of a transfer is less than $500, We may
require You to transfer the entire balance.

We will allow 12 transfers per contract year without imposing a
transfer charge. Transfers in excess of 12 per contract year may be
subject to a transfer charge that will not exceed $25 per transfer.

Transfers from the Fixed Account to the sub-accounts must occur
within 60 days after each contract anniversary. The largest amount
that may be transferred out in each contract year is the greater of
the amount transferred out in the prior contract year or 20% of the
balance in the Fixed

FPV-98150 11

<PAGE>

Account. A transfer of all of the Account Value from the Separate
Account to the Fixed Account will not be subject to a transfer
charge.

We may modify the transfer privilege at any time.

SEPARATE ACCOUNT EXPENSE CHARGE
On each Valuation Day, an expense charge equal to the daily
equivalent of the annual rate as shown on the Contract Information
page is deducted proportionately from the sub-accounts.

REPORTS ANNUAL REPORT
At least once each year, We will send You a report which shows:
- the current Death Benefit;
- the current Account Value;
- the current Cash Value;
- the premiums paid;
- investment gain/loss;
- any Indebtedness;
- the Cost of Insurance;
- the Premium Expense Charge;
- the Contract Fees;
- the current Surrender Value; and
- any other information required by the state in which this
contract was issued for delivery.

ILLUSTRATION OF BENEFITS
During any contract year, We will provide You with one illustration
of hypothetical future Account Values and Death Benefits at any time
upon Written Request. We may charge a reasonable fee for any
subsequent illustrations during the same contract year. However, the
fee will not be greater than $25.

CONTRACT LOANS
LOANS Your contract has a Loan Value which is equal to 90% of the Cash
Value (see page 8) as of the date of the loan. Loans must be at
least $250. You may borrow the Loan Value by assigning this contract
to Us as security for the loan. The assignment form must be
satisfactory to Us. Loans may be made at any time while this
contract is in force. We may defer the granting of a loan for up to
6 months.

You may decide the proportions in which to allocate the contract
loan among the sub-accounts of the Separate Account. If You do not
specify the allocation, then the contract loan will be allocated
among the sub-accounts of the Separate Account and the Fixed Account
in proportion to the Account Value in each account. The Account
Value equal to the portion of the contract loan allocated to a
sub-account and the Fixed Account will be transferred from that
sub-account and the Fixed Account to the Loan Account and the
Account Value in that sub-account and the Fixed Account will be
reduced by the amount transferred. If loan interest is not paid when
due, an amount of Account Value equal to the loan interest will also
be transferred.

If on any contract anniversary, the contract's Indebtedness exceeds
the Account Value in the Loan Account, We will transfer Account
Value equal to the excess Indebtedness from the Fixed Account and
the sub-accounts of the Separate Account to the Loan Account as
security for the excess debt in the same manner as the original
loan.

If You have an outstanding contract loan, the Guaranteed Death
Benefit provision will not prevent Your contract from entering the
Grace Period, if the Surrender Value is insufficient to cover the
Monthly Deduction.

PREFERRED LOAN
The amount available for a Preferred Loan is the earnings of the
contract since its inception.

FPV-98150 12

<PAGE>

Earnings equal (A) minus (B) minus (C) minus (D) plus (E); where

(A) is the Account Value;
(B) is total premiums paid;
(C) is the preferred loan balance;
(D) is accrued loan interest; and
(E) is all prior partial withdrawals in excess of earnings.

LOAN INTEREST
Interest on contract loans equals the Loan Interest Rate as shown on
the Contract Information page. Interest will accrue daily from the
date of the loan, and is due on each contract anniversary. Unpaid
interest will be added to existing Indebtedness, and will accrue
interest at the same rate.

REPAYMENT
While this contract is in force during the Insured's lifetime, any
loan may be repaid in whole or in part. When a loan repayment is
made, the Account Value in the Loan Account will be reduced by the
loan repayment, and this amount will be allocated proportionately
among the Fixed Account and sub-accounts of the Separate Account.

CONTRACT CONTRACT WITHDRAWAL
WITHDRAWAL You may withdraw from this contract its full Surrender Value upon
Written Request at any time during the lifetime of the Insured. Upon
withdrawal of the full Surrender Value, this contract will
terminate.

You may also make a partial withdrawal under this contract. Partial
withdrawals must be at least $250. For any partial withdrawal after
the first in any contract year, We may charge a transaction fee of
the lesser of $25 or 2% of the amount of the partial withdrawal. You
may select the sub- accounts from which to deduct the amount of the
partial withdrawal. If You do not indicate where the funds will be
deducted from, the amount of the partial withdrawal will be deducted
on a pro rata basis from the sub- accounts and the Fixed Account.

If Death Benefit Option 1 is in effect, both the Face Amount and the
Account Value will be reduced by the amount of the partial
withdrawal, the withdrawal charge and the partial withdrawal fee. If
Death Benefit Option 2 is in effect, the Account Value will be
reduced by the amount of the partial withdrawal and the partial
withdrawal fee.

Each partial withdrawal is subject to the following:
- no partial withdrawal may be made in the first contract year:
- a withdrawal charge and a partial withdrawal fee will be deducted
from the partial withdrawal;
- the Surrender Value that remains must be at least $500, or
the withdrawal request will be treated as a request to withdraw
the Full Surrender Value; and
- the Face Amount that remains in force is not less than the
Minimum Face Amount shown on the Contract Information page.

WITHDRAWAL CHARGE
If Death Benefit Option 1 is in effect, the withdrawal charge for a
partial withdrawal is equal to a proportion of the withdrawal
charge. The proportion will be computed as the decrease in Face
Amount due to the partial withdrawal, divided by the Face Amount
before any such partial withdrawal. Future withdrawal charges
will be reduced in this proportion. However, any additional
withdrawal charges resulting from an increase in the Face Amount
after the date of the partial withdrawal will not be reduced in
this proportion.

FPV-98150 13

<PAGE>

The withdrawal charge is shown of the Contract Information page.

We may defer the payment of Your withdrawal from the Fixed Account
for up to 6 months.

WAIVER OF WITHDRAWAL CHARGE
We will waive the Withdrawal Charge in the event of a Qualifying
Medical Stay. To qualify for this waiver:

- the Insured must have a Qualifying Medical Stay which
begins after the first contract year and lasts at
least 45 days during any continuous 60 day period; or
- the Insured's spouse must have a Qualifying Medical
Stay which begins after the first contract year and
lasts at least 45 days during any continuous 60 day
period; and
- You must mail Your Written Request for this waiver,
together with proof, satisfactory to Us, of the stay,
within 180 days of initial eligibility.

If the Insured's spouse had a Qualifying Medical Stay within 45 days
prior to the Contract Date, a waiver of the Withdrawal Charge will
not be considered for the Insured's spouse, until the later of:

- 6 months from the date of the last Qualifying Medical Stay; or
- the first contract anniversary.

Qualifying Medical Stay means: 1) confinement in a Qualifying
Institution; and 2) treatment by a Qualifying Medical Professional.

A Qualifying Institution means a licensed hospital or licensed
skilled or intermediate care nursing facility at which: 1) medical
treatment is available on a daily basis; and 2) daily medical
records are kept on each patient. It does not include: 1) a facility
whose purpose is to provide accommodations, board or personal care
services to individuals who do not need medical or nursing care; or
2) a place mainly for rest.

A Qualifying Medical Professional is a legally qualified
practitioner of the healing arts who is: 1) acting within the scope
of his or her license; 2) not a resident of Your household; and 3)
not a member of Your immediate family (children, grandchildren,
parents, grandparents, siblings and their spouses).

Treatment means the rendering of medical care or advice related to a
specific medical condition. Treatment includes diagnosis and
subsequent care. It does not include routine monitoring unless
medically necessary.

PAYMENT OF PAYMENT
PROCEEDS The Proceeds of this contract will be subject first to the interest
of an assignee, to whom payment will be made in one sum. We will pay
any remaining Proceeds to You before the Insured's death, and to the
Beneficiary after the Insured's death.

Payment to the Beneficiary will be made only if We receive proof,
satisfactory to Us, of the Insured's death. Unless otherwise
provided, payment will be made in equal shares to those
Beneficiaries entitled to receive the Proceeds.

DELAY OF PAYMENT
We will pay Surrender Values, withdrawals and contract loans
allocated to the Separate Account within seven days after We receive
Your Written Request. We will pay death Proceeds allocated to

FPV-98150 14

<PAGE>

the Separate Account within seven days, only after We receive Your
Written Request and receive proof, satisfactory to Us, of the
Insured's death. Payment may be delayed if:

- the New York Stock Exchange is closed on other than
customary weekend and holiday closings or trading on
the New York Stock Exchange is restricted as
determined by the SEC; or
- an emergency exists, as determined by the SEC, as a result of
which disposal of securities is not reasonably practicable to
determine the value of the sub-accounts; or
- the SEC, by order, permits postponement for the protection of
contract owners.

PAYMENT OF PAYMENT OF PROCEEDS OPTIONS
PROCEEDS The Proceeds may be applied under one of the following Options. An
OPTIONS Option must be selected by Written Request. You may select an
Option during the Insured's lifetime. If You have not selected an
Option before the Insured's death, the Beneficiary may choose one.
We will not permit withdrawals or partial withdrawals after payments
under a proceeds option involving life contingencies commence.

THE OPTIONS
1. INTEREST. We will pay interest monthly on Proceeds
left on deposit with Us. We will declare the interest
rate each year. It will never be less than 3 1/2% a
year.
2. FIXED AMOUNT. We will pay equal monthly installments,
first payment immediately, until the Proceeds and the
interest have been exhausted. Interest will be
credited on unpaid balances at the rate which We will
declare each year. It will never be less than 3 1/2%,
compounded annually.
3. FIXED PERIOD. We will pay equal monthly installments,
first payment immediately, for not more than 25 years.
The minimum amount of each installment may be
determined from the OPTION 3 TABLE on page 16. This
Table is based on a guaranteed interest rate of 3 1/2%,
compounded annually.
4. LIFE INCOME. We will pay equal monthly installments,
first payment immediately, for the lifetime of the
payee with or without a guaranteed period. The minimum
amount of each installment may be determined from the
OPTION 4 TABLE on page 16. This Table is based on a
guaranteed interest rate of 3 1/2%, compounded
annually. The guaranteed period selected may be:
(1) 10 years; (2) 15 years; or (3) 20 years.
5. OTHER PAYMENT. We will pay the Proceeds in any other manner
that may be mutually agreed upon.

AVAILABILITY
No Option may be selected unless the amount to be applied is
more than $2,000 and will provide an installment payment of at least
$20. Unless We consent, these Options will not be available if the
payee is an assignee, administrator, executor, trustee, association,
partnership or corporation.

ADDITIONAL INTEREST
At Our discretion, additional interest may be declared annually on
all Payment Options. This interest will lengthen the period under
Option 2, and increase the installment amounts under Options 3 and
4.

FPV-98150 15

<PAGE>

<TABLE>
<CAPTION>
OPTION 3 TABLE
MINIMUM MONTHLY INSTALLMENT PAYMENT PER $1,000 APPLIED
-------------------------------------------------------------------------------------------------------------------
Number Monthly Number Monthly Number Monthly Number Monthly Number Monthly
of Years Payment of Years Payment of Years Payment of Years Payment of Years Payment
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.65 6 $15.35 11 $9.09 16 $6.76 21 $5.56
-------------------------------------------------------------------------------------------------------------------
2 43.05 7 13.38 12 8.46 17 6.47 22 5.39
-------------------------------------------------------------------------------------------------------------------
3 29.19 8 11.90 13 7.94 18 6.20 23 5.24
-------------------------------------------------------------------------------------------------------------------
4 22.27 9 10.75 14 7.49 19 5.97 24 5.09
-------------------------------------------------------------------------------------------------------------------
5 18.12 10 9.83 15 7.10 20 5.75 25 4.96
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
OPTION 4 TABLE
MINIMUM MONTHLY INSTALLMENT PAYMENT PER $1,000 APPLIED
-------------------------------------------------------------------------------------------------------------------
MALE FEMALE
-------------------------------------------------------------------------------------------------------------------
No Guaranteed Guaranteed Guaranteed No Guaranteed Guaranteed Guaranteed
Guaranteed Period Period Period Guaranteed Period Period Period
Age Period 10 Years 15Years 20 Years Age Period 10 Years 15Years 20Years
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $4.45 $4.41 $4.36 $4.29 50 $4.11 $4.09 $4.07 $4.04
51 4.52 4.47 4.42 4.34 51 4.16 4.15 4.12 4.09
52 4.59 4.55 4.48 4.40 52 4.22 4.20 4.18 4.14
53 4.67 4.62 4.55 4.45 53 4.29 4.27 4.24 4.19
54 4.76 4.70 4.62 4.51 54 4.36 4.33 4.30 4.24

55 4.85 4.78 4.70 4.57 55 4.43 4.40 4.36 4.30
56 4.94 4.87 4.77 4.63 56 4.50 4.47 4.42 4.36
57 5.04 4.96 4.85 4.70 57 4.58 4.54 4.49 4.42
58 5.15 5.06 4.93 4.76 58 4.67 4.62 4.57 4.48
59 5.26 5.16 5.02 5.82 59 4.76 4.71 4.64 4.55

60 5.39 5.26 5.11 4.89 60 4.85 4.80 4.72 4.61
61 5.52 5.38 5.20 4.95 61 4.95 4.89 4.81 4.68
62 5.66 5.50 5.29 5.01 62 5.06 4.99 4.89 4.75
63 5.80 5.62 5.39 5.08 63 5.18 5.10 4.98 4.82
64 5.96 5.75 5.49 5.14 64 5.30 5.21 5.08 4.89

65 6.14 5.89 5.58 5.20 65 5.43 5.32 5.18 4.96
66 6.32 6.03 5.68 5.26 66 5.57 5.45 5.28 5.03
67 6.51 6.18 5.78 5.31 67 5.72 5.58 5.38 5.10
68 6.72 6.33 5.88 5.37 68 5.89 5.72 5.49 5.17
69 6.94 6.49 5.98 5.42 69 6.06 5.86 5.60 5.23

70 7.18 6.65 6.08 5.46 70 6.25 6.01 5.71 5.30
71 7.44 6.82 6.18 5.50 71 6.45 6.18 5.82 5.36
72 7.71 6.99 6.27 5.54 72 6.67 6.34 5.93 5.41
73 7.99 7.16 6.36 5.58 73 6.91 6.52 6.04 5.46
74 8.30 7.33 6.44 5.61 74 7.17 6.70 6.15 5.51

75 8.63 7.51 6.52 5.63 75 7.45 6.89 6.26 5.55
76 8.99 7.68 6.60 5.66 76 7.75 7.08 6.36 5.59
77 9.37 7.86 6.67 5.68 77 8.08 7.28 6.45 5.62
78 9.77 8.03 6.73 5.69 78 8.43 7.48 6.54 5.65
79 10.21 8.19 6.79 5.71 79 8.81 7.68 6.62 5.67
80 10.67 8.36 6.84 5.72 80 9.22 7.88 6.70 5.69
-------------------------------------------------------------------------------------------------------------------
</TABLE>

FPV-98150 16

<PAGE>

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

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
A MEMBER OF THE LIBERTY MUTUAL GROUP

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

CONTRACT DESCRIPTION

FPV-98150

<PAGE>
Exhibit 1.8(b)(1)

PARTICIPATION AGREEMENT AMONG

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,

LIBERTY VARIABLE INVESTMENT TRUST,

LIBERTY ADVISORY SERVICES CORP.

AND

KEYPORT FINANCIAL SERVICES CORP.

This Agreement, made and entered into as of this ______ day of May, 1999
by and among Liberty Life Assurance Company of Boston (the "Company"), on its
own behalf and on behalf of its Separate Accounts, each of which is a
segregated asset account of the Company, Liberty Variable Investment Trust
(the "Trust"), Liberty Advisory Services Corp. ("LASC") and Keyport Financial
Services Corp. ("KFSC").

WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and
variable annuity contracts (collectively, "Variable Insurance Products") to
be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement (each hereinafter a
"Participating Insurance Company"); and

WHEREAS, the beneficial interest in the Trust is divided into several
series of shares (such series being hereinafter referred to individually as a
"Series" or collectively as the "Series") available for purchase by the
Company for the Separate Accounts and listed in Schedule A, which is attached
hereto and incorporated herein; and

WHEREAS, the Trust relies on an order from the Securities and Exchange
Commission ("SEC"), dated July 1, 1988 (File No. 812-7044), granting life
insurance companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (the "1940 Act") and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order");
and

<PAGE>

WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and

WHEREAS, Liberty Advisory Services Corp. ("LASC") serves as investment
adviser to the Trust and is duly registered as an investment adviser under
the Investment Advisers Act of 1940 and applicable state securities laws; and
provides certain administrative services to the Trust; and

WHEREAS, Liberty Funds Services, Inc. ("LFSI") serves as transfer agent
to the Trust; and

WHEREAS, the Company has registered or will register certain Variable
Insurance Products (set forth in Schedule A, which is attached hereto and
incorporated herein) under the 1933 Act, unless exempt therefrom; and

WHEREAS, the Company has established duly organized, validly existing
segregated asset accounts (set forth in Schedule A, which is attached hereto
and incorporated herein) (the "Separate Accounts") by resolution of the Board
of Directors of the Company; and

WHEREAS, the Company has registered or will register certain Separate
Accounts as unit investment trusts under the 1940 Act, unless exempt
therefrom; and

WHEREAS, the Company may rely on certain provisions of the 1933 and 1940
Acts that exempt certain Separate Accounts and Variable Insurance Products
from the registration requirements of the Acts in connection with the sale of
Variable Insurance Products under certain tax-advantaged retirement programs,
described in Article II, Section 2.12 and as provided for by Internal Revenue
Code of 1986, as amended (the "Code"); and

WHEREAS, KFSC serves as distributor of the Trust's shares and is
registered as a broker-dealer with the SEC under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD");

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Trust on behalf of
each Separate Account to fund certain Variable Insurance Products listed in
Schedule A and KFSC is authorized to sell such shares to the Separate
Accounts at net asset value as provided in Article I hereof;

<PAGE>

NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust, LASC and KFSC agree as follows:

ARTICLE I. SALE OF FUND SHARES

1.1. KFSC will sell to the Company those shares of the Trust which each
Separate Account orders, executing such orders on a daily basis at the
closing net asset value next computed after receipt by the Separate Accounts
of purchase payments or for the business day on which transactions under
Variable Insurance Products are effected by the Separate Accounts. The
Company will notify the Trust of purchase orders by 9:30 a.m. Eastern time on
the next following Business Day. For purposes of this Section 1.1, LFSI shall
be the designee of the Trust to receive such orders from the Company on
behalf of each Separate Account and receipt by LFSI shall constitute receipt
by the Trust. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Trust calculates its net asset
value pursuant to the rules of the SEC.

1.2. The Trust will make its shares available indefinitely for purchase
at the applicable closing net asset value per share by the Company and its
Separate Accounts on those days on which the Trust calculates its net asset
value pursuant to rules of the SEC, and the Trust shall use reasonable
efforts to calculate such net asset value on each Business Day, in accordance
with Section 1.11. Notwithstanding the foregoing, the Board of Trustees of
the Trust (the "Trustees") may refuse to sell shares of any Series to any
person, or suspend or terminate the offering of shares of any Series if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Trustees, acting in good faith and in light
of their fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such Series.

1.3. The Trust and KFSC agree that shares of the Trust will be sold only
to Participating Insurance Companies and their Separate Accounts. No shares
of any Series will be sold to the general public.

1.4. The Trust and KFSC will not sell Trust shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Sections 2.5 and 2.12
of Article II of this Agreement is in effect to govern such sales.

<PAGE>

1.5. The Trust will redeem for cash, at the Company's request, any full
or fractional shares of the Trust held by the Company, executing such
requests on a daily basis at the closing net asset value next computed after
receipt by the Separate Accounts of redemption requests or for the Business
Day on which transactions under Variable Insurance Products are effected by
the Separate Accounts. The Company will notify the Trust of redemption
requests by 9:30 a.m. Eastern time on the next following Business Day. For
purposes of this Section 1.5, LFSI shall be the designee of the Trust to
receive requests for redemption from the Company on behalf of each Separate
Account, and receipt by such designee shall constitute receipt by the Trust.

1.6. The Trust may suspend the redemption of any full or fractional
shares of the Trust (1) for any period (a) during which the New York Stock
Exchange is closed (other than customary weekend and holiday closings) or (b)
during which trading on the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists (as determined by the SEC) as a
result of which (a) disposal by the Trust of securities owned by it is not
reasonably practicable or (b) it is not reasonably practicable for the Trust
fairly to determine the value of its net assets; or (3) for such other
periods as the SEC may by order permit for the protection of shareholders of
the Trust.

1.7. The Company will purchase and redeem the shares of each Series
offered by the then current prospectus of the Trust and in accordance with
the provisions of such prospectus and statement of additional information
(the "SAI") (collectively referred to as the "Prospectus," unless otherwise
provided).

1.8. The Company shall pay for Trust shares on the next Business Day
after an order to purchase Trust shares is placed in accordance with the
provisions of Section 1.1. hereof. Payment shall be in federal funds
transmitted by wire, or may otherwise be provided by separate agreement, with
the reasonable expectation of receipt by the Trust by 2:00 p.m. Eastern time
on the next Business Day after the Trust (or its designee) receives the
purchase order.

The Trust shall pay for redeemed Trust shares on the next Business Day
after a request to redeem Trust shares is made in accordance with the
provisions of Section 1.5 hereof. Payment shall be in federal funds
transmitted by wire, or may otherwise be provided by separate agreement, with
the

<PAGE>

reasonable expectation of receipt by the Company by 2:00 p.m. Eastern time on
the next Business Day after the Trust (or its designee) receives the
redemption request.

With respect to the payment of the purchase price by the Company and of
the redemption proceeds by the Trust, the Company and the Trust may net
purchase and redemption orders with respect to each Series and may transmit
one net payment per Series.

1.9. Issuance and transfer of the Trust's shares will be by book entry
only. The Trust will not issue share certificates to either the Company or
the Separate Accounts. Shares ordered from the Trust will be recorded in an
appropriate title for each Separate Account or the appropriate subaccount of
each Separate Account.

1.10. The Trust, through its designee LFSI, shall furnish same day
notice (by wire or telephone, followed by written confirmation) to the
Company of any income dividends or capital gain distributions payable on the
shares of any Series. The Company hereby elects to receive all such income,
dividends and capital gain distributions as are payable on the shares of each
Series in additional shares of that Series. The Company reserves the right to
revoke this election and to receive all such income, dividends and capital
gain distributions in cash. The Trust shall notify the Company through LFSI
of the number of shares so issued as payment of such income, dividends and
distributions.

1.11. The Trust shall make the closing net asset value per share for
each Series available to the Company on a daily basis as soon as reasonably
practical after closing the net asset value per share is calculated and shall
use its best efforts to make such closing net asset value per share available
by 6:30 p.m., Boston time. If the Trust provides materially incorrect share
net asset value information (as determined under SEC guidelines), the Company
and its designees shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct net asset value per share. Any
material error in the calculation or reporting of net asset value per share,
dividend or capital gain information shall be reported promptly upon
discovery to the Company and its designees. The Trust or LASC, whichever is
responsible for a material pricing error, shall reimburse the Company for its
reasonable costs of correcting such an error.

<PAGE>

ARTICLE II. REPRESENTATIONS AND WARRANTIES

2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act to the extent required by the 1933 Act; that
the Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws and that the sale of the Contracts
shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is duly
organized and in good standing under applicable law and that prior to any
issuance or sale of any Contract it has legally and validly established each
Separate Account as a segregated asset account under all applicable state
insurance laws and has registered or, prior to any issuance or sale of the
Contracts, will register each Separate Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts, to the extent required by the 1940 Act.

2.2. The Trust represents and warrants that Trust shares sold pursuant
to this Agreement shall be registered under the 1933 Act to the extent
required by the 1933 Act, duly authorized for issuance and sold in compliance
with the laws of the Commonwealth of Massachusetts and all applicable federal
and any state securities laws and that the Trust is and shall remain
registered under the 1940 Act to the extent required by the 1940 Act. The
Trust shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify the
shares for sale in accordance with the laws of the various states only if and
to the extent deemed advisable by the Trust or KFSC.

2.3. The Trust represents and warrants that it currently is qualified as
a Regulated Investment Company under Subchapter M of the Code and that it
will make every effort to remain qualified (under Subchapter M or any
successor or similar provision) and that it will notify the Company
immediately upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.

2.4. Subject to Sections 2.3 and 6.1 thereof, the Company represents
that the Contracts are currently treated as endowment, annuity or life
insurance contracts under applicable provisions of the Code and that it will
make every effort to maintain such treatment and that it will notify the
Trust and KFSC immediately upon having a reasonable basis for believing that
the Contracts have ceased to be so treated or that they might not be so
treated in the future.

<PAGE>

2.5. The Trust currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future consistent with applicable
law. To the extent that it decides to finance distribution expenses pursuant
to Rule 12b-1, the Trust undertakes to have its Trustees, a majority of whom
are not interested persons of the Trust, formulate and approve any plan under
Rule 12b-1 to finance distribution expenses.

2.6. The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various
states except that the Trust represents that it is currently in compliance
and shall at all times remain in compliance with the applicable insurance
laws of Delaware to the extent required to perform this Agreement and all
other states to the extent that the Participating Insurance Company advises
the Trust, in writing, of such laws or any changes in such laws, including
the furnishing of information not otherwise available to the Company which is
required by state insurance law to enable the Company to obtain the authority
needed to issue the Contracts in any applicable state.

2.7. KFSC represents and warrants that it is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it is,
and will remain, a member in good standing of the NASD and registered as a
broker-dealer with the SEC. KFSC further represents that it will sell and
distribute the Trust shares in accordance with the laws of the Commonwealth
of Massachusetts and all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.

2.8. The Trust represents and warrants that it is and shall remain
lawfully organized and validly existing under the laws of the Commonwealth of
Massachusetts and that it does and will comply in all material aspects with
the 1940 Act and the rules and regulations thereunder.

2.9. LASC represents and warrants that it is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it is
and will remain duly registered as an investment adviser in all material
aspects under all applicable federal and state securities laws and that it
shall

<PAGE>

perform its obligations for the Trust in compliance in all material respects
with all applicable laws of the Commonwealth of Massachusetts and any
applicable state and federal securities laws.

2.10. The Trust represents and warrants that all of its trustees,
officers, employees, investment advisers, and other individuals/entities
having access to securities or funds of the Trust are and shall continue to
be at all times covered by a joint fidelity bond in an amount not less than
the minimum coverage required by Rule 17g-1 or other applicable regulations
under the 1940 Act with no deductible amount. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable fidelity insurance company. Such fidelity bond may be a joint bond
with other investment companies having the same investment adviser,
sub-adviser, distributor or transfer agent.

2.11. The Company represents and warrants that it will not, without the
prior written consent of KFSC, purchase Trust shares with Separate Account
assets derived from the sale of Contracts to individuals or entities which
qualify under current or future state or federal law for any type of tax
advantage (whether by a reduction or deferral of, deduction or exemption
from, or credit against income or otherwise). Examples of such types of funds
under current law include: any tax-advantaged retirement program, whether
maintained by an individual, employer, employee association or otherwise
(including, without limitation, retirement programs which qualify under
Sections 401(a), 401(k), 403(a), 403(b), 408 and 457 of the Code), and any
retirement programs maintained for employees of the Government of the United
States or by the government of any state or political subdivision thereof, or
by any agency or instrumentality of any of the foregoing.

2.12. The Company represents and warrants that it will not transfer
or otherwise convey shares of the Trust, without the prior written consent of
KFSC.

ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING

3.1. KFSC shall provide the Company with as many copies of the current
prospectus for each Series set forth on Schedule A, excluding the SAI, as the
Company may reasonably request in connection with delivery of the prospectus,
excluding the SAI, to shareholders and purchasers of the Contracts. If
requested by the Company in lieu thereof, the Trust shall provide such
documentation (including a final copy of the new prospectus, excluding the
SAI, as set in type at the Trust's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more

<PAGE>

frequently if a prospectus for a Series is amended) to have the prospectus
for the Contracts and the Series' prospectuses, excluding the SAI, printed
together in one document. With respect to any Series prospectus that is
printed in combination with any one or more Contract prospectus (the
"Prospectus Booklet"), the costs of printing Prospectus Booklets for
distribution to existing Contract owners shall be prorated to the Trust based
on (a) the ratio of the number of pages of the Series prospectus included in
the Prospectus Booklet to the number of pages in the Prospectus Booklet as a
whole; and (b) the ratio of the number of Contract owners with Contract value
allocated to the Series to the total number of Contract owners, PROVIDED THAT
the Trust shall not be required to pay the Company more than $37,500 during
calendar year 1999 as its portion of the cost of printing Prospectus
Booklets, as allocated pursuant to this Section.

3.2. Each Series prospectus shall state that the SAI for the Series is
available from KFSC and the Trust, at its expense, shall provide a final copy
of such SAI to KFSC for duplication and provision to any prospective owner
who requests the SAI and to any owner of a Contract ("Owners").

3.3. The Trust, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require for
distribution to Owners.

3.4. If and to the extent required by law, the Company and, so long as
and to the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for Owners, the Trust shall:

(i) solicit voting instructions from Owners;

(ii) vote the Trust shares in accordance with instructions received from
Owners; and

(iii) vote Trust shares for which no instructions have been received in
the same proportion as Trust shares of such Series for which instructions
have been received;

The Company reserves the right to vote Trust shares held in any
segregated asset account in its own right, to the extent permitted by law.
Each Participating Insurance Company shall be responsible for assuring that
each of its Separate Accounts participating in the Trust calculates voting
privileges in a manner consistent with the standards to be provided in
writing to the Participating Insurance Company.

<PAGE>

3.5. The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders. The Trust reserves the right to take all actions,
including but not limited to, the dissolution, merger, and sale of all assets
of the Trust upon the sole authorization of its Trustees, to the extent
permitted by the laws of the Commonwealth of Massachusetts and the 1940 Act.

ARTICLE IV. SALES MATERIAL AND INFORMATION

4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other promotional
material in which the Trust or LASC or any sub-adviser or KFSC is named, at
least 10 days prior to its use. No such material shall be used if the Trust
or its designee objects to such use within 10 days after receipt of such
material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust
in connection with the sale of the Contracts other than the information or
representations contained in the registration statement or a Prospectus for
Series shares, as such registration statement and Prospectus may be amended
or supplemented from time to time, or in reports or proxy statements for the
Trust, or in sales literature or other promotional material approved by the
Trust or its designee or by KFSC, except with the permission of the Trust or
KFSC or the designee of either. The Trust and KFSC agree to respond to any
request for approval on a prompt and timely basis. The Company shall adopt
and implement procedures reasonably designed to ensure that "broker only"
materials including information about the Trust or KFSC are not distributed
to existing or prospective owners, and neither the Trust nor KFSC shall be
liable for any losses, damages, or expenses relating to the improper use of
such broker only materials.

4.3. The Trust or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company, a Separate Account(s) and/or
the Contracts are named at least 10 days prior to its use. No such material
shall be used if the Company or its designee objects to such use within 10
days after receipt of such material.

4.4. The Trust and KFSC shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, any Separate Account, or the

<PAGE>

Variable Insurance Products other than the information or representations
contained in a registration statement or prospectus for such Variable
Insurance Products, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published reports for such
Separate Account which are in the public domain or approved by the Company
for distribution to Owners, or in sales literature or other promotional
material approved by the Company or its designee, except with the permission
of the Company. The Company agrees to respond to any request for approval on
a prompt and timely basis. The Trust and KFSC shall adopt and implement
procedures reasonably designed to ensure that "broker only" materials
including information about the Company or the Contracts are not distributed
to existing or prospective owners, and the Company shall not be liable for
any losses, damages, or expenses relating to the improper use of such broker
only materials.

4.5. The Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemption,
requests for no-action letters, and all amendments to any of the above, that
relate to the Trust or its shares, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.

The Trust shall provide the Company with as much notice as is reasonable
practicable of any proxy solicitation for a Series and of any material change
in the prospectuses or registration statements relating to the Trust or its
shares, particularly any changes resulting in a change to a prospectus or
registration statement relating to the Contracts.

4.6. The Company will provide to the Trust at least one complete copy of
all registration statements, prospectuses, SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemption, requests for no-action letters, and all
amendments to any of the above, that relate to the Variable Insurance
Products or any Separate Account, contemporaneously with the filing of such
document with the SEC.

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine,
or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public
media), sales literature (i.e., any written

<PAGE>

communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters,
form letters, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, and registration statements, prospectuses, SAIs,
shareholder reports, proxy materials, and any other material constituting
sales literature or advertising under the NASD rules, the 1933 Act, or the
1940 Act.

4.8 The Company, the Trust, and KFSC agree that the provisions of this
Article IV is not intended to designate or otherwise imply that the Company
is an underwriter or distributor of shares of the Trust.

ARTICLE V. FEES AND EXPENSES

5.1. The Trust and KFSC shall pay no fee or other compensation to the
Company under this Agreement, except that if the Trust or any Series adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then KFSC may make payments to the Company or to the underwriter
for the Variable Insurance Products if and in amounts agreed to by KFSC in
writing and such payments will be made out of existing fees payable to KFSC
by the Trust for this purpose. No such payments shall be made directly by the
Trust. Currently, no such plan pursuant to Rule 12b-1 or payments are
contemplated.

5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. At its expense, the Trust shall see to
it that all its shares are registered and authorized for issuance in
accordance with applicable federal law and, if and to the extent deemed
advisable by the Trust, in accordance with applicable state laws prior to
their sale. The Trust shall bear the expenses of registration and
qualification of the Trust's shares, preparation and filing of the Trust's
registration statement, registration statement amendments, Series
prospectuses, proxy materials and reports, setting the prospectus in type,
setting in type and printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes an annual
report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the
Trust's shares.

<PAGE>

5.3. The Company shall bear the expenses of distributing the Trust's
proxy materials and reports to Owners.

ARTICLE VI. DIVERSIFICATION

6.1. The Trust will at all times invest money from the Variable
Insurance Products in such a manner as to ensure that, insofar as such
investment is required to assure such treatment, the Variable Insurance
Products will be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of the foregoing,
the Trust currently complies with and at all times will continue to comply
with Section 817(h) of the Code and the Treasury Regulations thereunder
relating to the diversification requirements for variable annuity, endowment,
or life insurance contracts and any amendments or other modifications to such
Section or Regulations, and will notify the Company immediately upon having a
reasonable basis to believe any Series has ceased to comply or may not so
comply in the future and will immediately take all necessary steps to
adequately diversify the Series to achieve compliance within the grace period
afforded by Regulation 1.817-5 of the Code.

ARTICLE VII. POTENTIAL CONFLICTS

7.1. The Trustees will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Owners of
separate accounts of the Participating Insurance Companies investing in the
Trust. A material irreconcilable conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Series
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance policy owners; or (f) a decision
by an insurer to disregard the voting instructions of Owners. The Trustees
shall promptly inform the Participating Insurance Companies if they determine
that a material irreconcilable conflict exists and the implications thereof.

7.2. The Company will report to the Trustees any potential or existing
conflicts (including the occurrence of any event specified in paragraph 7.1
which may give rise to such a conflict) of which it is

<PAGE>

aware. The Company will assist the Trustees in carrying out their
responsibilities under the Shared Funding Exemptive Order, by providing the
Trustees with all information reasonably necessary for the Trustees to
consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Trustees whenever Owner voting
instructions are disregarded.

7.3. If it is determined by a majority of the Trust's Trustees, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists, the Company and other Participating Insurance Companies for
which a material irreconcilable conflict is relevant shall, at their expense
and to the extent reasonably practicable (as determined by a majority of the
disinterested Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts of
Participating Insurance Companies from the Trust or any Series and
reinvesting such assets in a different investment medium, including (but not
limited to) another Series of the Trust, or submitting the question whether
such segregation should be implemented to a vote of all affected Owners and,
as appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners, life insurance contract owners, or variable contract
owners of one or more of the Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Owners the option of
making such a change; (2), establishing a new registered management
investment company or managed separate account; and (3) obtaining SEC
approval.

7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Separate
Account's investment in the Trust and terminate this Agreement; provided,
however that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested Trustees. Any such withdrawal and termination
must take place within six months after the Trust gives written notice that
this provision is being implemented, and until the end of that six-month
period KFSC and Trust shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Trust.

<PAGE>

7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Separate Account's investment in the Trust and terminate this
Agreement within six months after the Trustees inform the Company in writing
that they have determined that such decision has created a material
irreconcilable conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
Trustees. Until the end of the foregoing six-month period, KFSC and Trust
shall continue to accept and implement orders by the Company for the purchase
(and redemption) of shares of the Trust.

7.6. For purposes of Sections 7.3. through 7.6. of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable conflict, but in no
event will the Trust be required to establish a new funding medium for the
Variable Insurance Products. The Company shall not be required to establish a
new funding medium for the Variable Insurance Products if an offer to do so
has been declined by vote of a majority of Owners materially adversely
affected by the material irreconcilable conflict. If the Trustees determine
that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the affected Separate
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested Trustees.

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Shared Funding Exemptive Order) on terms
and conditions materially different from those contained in the Shared
Funding Exemptive Order, then (a) the Trust and/or the Company, as
appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4., 3.5., 7.1., 7.2., 7.3., 7.4.,
and 7.5. of this Agreement shall continue

<PAGE>

in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

ARTICLE VIII. INDEMNIFICATION

8.1 INDEMNIFICATION BY THE COMPANY

(a) The Company agrees to indemnify and hold harmless LASC, the
KFSC, the Trust and each of its Trustees, officers, employees and agents and
each person, if any, who controls the Trust within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" and individually the
"Indemnified Party" for purposes of this Article VIII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of Trust Shares or the
Contracts and

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in a disclosure
document for the Contracts or in the Contracts themselves or in sales
literature generated or approved by the Company on behalf of the Contracts or
Accounts (or any amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this Article VIII), or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was accurately
derived from written information furnished to the Company by or on behalf of
the Trust for use in Company Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares; or

(ii) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section

<PAGE>

8.2(a)(i) below) or wrongful conduct of the Company or persons under its
control, with respect to the sale or acquisition of the Contracts or Trust
shares; or

(iii) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Trust Documents as
defined in Section 8.2(a)(i) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was made
in reliance upon and accurately derived from written information furnished to
the Trust by or on behalf of the Company; or

(iv) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of
this Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company, subject to Sections 8(1)(b) and (c) below.

(b) The Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Trust or
LASC, whichever is applicable. The Company shall also not be liable under
this indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified

<PAGE>

Party shall bear the fees and expenses of any additional counsel retained by
it, and the Company will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs of
investigation.

(c) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust shares or the Contracts or the operation of
the Trust.

The provisions of this Section 8.1 shall survive the termination of
this Agreement.

8.2 INDEMNIFICATION BY THE ADVISER

(a) LASC agrees to indemnify and hold harmless the Company, the
underwriter of the Contracts and each of its directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" and individually an
"Indemnified Party" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of LASC, which consent shall not be unreasonably
withheld) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses") to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such Losses are
related to the sale or acquisition of the Trust's Shares or the Contracts and:

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Registration
Statement, prospectus or sales literature of the Trust (or any amendment or
supplement to any of the foregoing) (collectively, the "Trust Documents") or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in reliance upon and
in conformity with written information furnished to LASC or Trust by or on
behalf of the Company for use in the Registration

<PAGE>

Statement or prospectus for the Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale of
the Contracts or Trust shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
disclosure documents or sales literature for the Contracts not supplied by
LASC or persons under its control) or wrongful conduct of the Trust, LASC or
KFSC or persons under their control, with respect to the sale or distribution
of the Contracts or Trust shares; or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a disclosure document or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Trust; or

(iv) arise as a result of any failure by the Trust to provide
the services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or otherwise, to
comply with the qualification representation specified in Section 2.3 of this
Agreement and the diversification requirements specified in Section 6.1 of
this Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by LASC or KFSC in this Agreement or
arise out of or result from any other material breach of this Agreement by
LASC or KFSC, as limited by and in accordance with the provisions of Sections
8.2(b) and 8.2(c) hereof.

(b) LASC shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to each Company or the Account, whichever is
applicable.

(c) LASC shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified LASC in writing within a reasonable
time after the summons or other first legal process giving information of the
nature

<PAGE>

of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify LASC of any such claim shall not
relieve LASC from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, LASC will be entitled to participate, at its own
expense, in the defense thereof. LASC also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from LASC to such party of LASC's election to assume the defense
thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and LASC will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.

(d) The Company agrees promptly to notify LASC of the commencement
of any litigation or proceedings against it or any of its officers or
directors in connection with the issuance or sale of the Contracts or the
operation of each Account.

(e) If, in any participation agreement to which LASC is a party
executed after the date of this Agreement (a "Later Agreement"), LASC shall
agree to indemnify a participating insurance company other than the Company
for the Trust's failure to comply with the Subchapter M and Section 817(h)
diversification requirements and regulations under the Internal Revenue Code,
then LASC agrees that it shall indemnify the Company pursuant to this
Agreement to the same extent it is required to indemnify the other
participating company under a Later Agreement.

The provisions of this Section 8.2 shall survive the termination of
this Agreement.

8.3 INDEMNIFICATION BY THE TRUST

(a) The Trust agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Trust, which consent shall not be
unreasonably withheld) or litigation (including legal and other

<PAGE>

expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements result
from the gross negligence, bad faith or willful misconduct of the Board or
any member thereof, are related to the operations of the Trust, and arise out
of or result from any material breach of any representation and/or warranty
made by the Trust in this Agreement or arise out of or result from any other
material breach of this Agreement by the Trust; as limited by and in
accordance with the provisions of Section 8.3(b) and 8.3(c) hereof. It is
understood and expressly stipulated that neither the holders of shares of the
Trust nor any Trustee, officer, agent or employee of the Trust shall be
personally liable hereunder, nor shall any resort be had to other private
property for the satisfaction of any claim or obligation hereunder, but the
Trust only shall be liable.

(b) The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against any Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company, the Trust, LASC or each Account,
whichever is applicable.

(c) The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Trust in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Trust of
any such claim shall not relieve the Trust from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Trust will be entitled to
participate, at its own expense, in the defense thereof. The Trust also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Trust to such party of the
Trust's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Trust will not be liable to such party

<PAGE>

under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

(d) The Company and LASC agree promptly to notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
the Account, or the sale or acquisition of share of the Trust.

The provisions of this Section 8.3 shall survive the termination of this
Agreement.

ARTICLE IX. APPLICABLE LAW

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to conflict of laws principles provided,
however, that if such laws or any of the provisions of this Agreement
conflict with applicable provisions of the 1940 Act, the latter shall control.

9.2. This Agreement shall be made subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant (including, but not limited to, the Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed in accordance
therewith.

ARTICLE X. TERMINATION

10.1. This Agreement shall terminate:

(a) at the option of any party upon six months advance written
notice to the other parties; or

(b) at the option of the Company to the extent that shares of a
Series are not reasonably available to meet the requirements of the Variable
Insurance Products as determined by the Company, provided however, that such
termination shall apply only to the Series not reasonably available. Prompt
notice of the election to terminate for such cause shall be furnished by the
Company; or

(c) at the option of the Trust, LASC or KFSC, if formal
administrative proceedings are instituted against the Company by the NASD,
the SEC, the Insurance Commissioner or any other regulatory body regarding
the duties of the Company under this Agreement or related to the sale of the

<PAGE>

Variable Insurance Products, with respect to the operation of a Separate
Account, or the purchase of the Trust shares, provided, however, that the
Trust or KFSC, as the case may be, shall determine in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or

(d) at the option of the Company, if formal administrative
proceedings are instituted against the Trust, LASC or KFSC by the NASD, the
SEC, or any state securities or insurance department or any other regulatory
body, provided, however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Trust, LASC or KFSC to
perform its respective obligations under this Agreement; or

(e) with respect to a Separate Account, upon requisite authority to
substitute the shares of another investment company for shares of the
corresponding Series of the Trust in accordance with the terms of the
Variable Insurance Products for which those Series shares had been selected
to serve as the underlying investment media. The Company will give the Trust
30 days' prior written notice the date of any proposed action to replace the
Trust shares; or

(f) at the option of the Company, in the event any of the Trust's
shares are not registered, issued or sold in accordance with applicable
federal and any state law or such law precludes the use of such shares as the
underlying investment media of the Variable Insurance Products issued or to
be issued by the Company; or

(g) at the option of the Company, if the Trust ceases to qualify as
a Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision, or if the Company reasonably believes that
the Trust may fail to so qualify; or

(h) at the option of the Company, if the Trust fails to meet the
diversification requirements specified in Article VI hereof or if the Company
reasonably believes that the Trust may fail to meet the diversification
requirements set forth in Article VI of this Agreement; or

(i) at the option of the Trust, LASC or KFSC, if:

(1) the Trust, LASC or KFSC, respectively, shall determine, in
their sole judgment reasonably exercised in good faith, that the Company has
suffered a material adverse change in its

<PAGE>

business or financial condition or is the subject of material adverse
publicity and that such material adverse publicity will have a material
adverse impact upon the business and operations of the Trust, LASC or KFSC,

(2) the Trust, LASC or KFSC shall notify the Company in
writing of such determination and its intent to terminate this Agreement, and

(3) after considering the actions taken by the Company and any
other changes in circumstances since the giving of such notice, such
determination of the Trust, LASC or KFSC shall continue to apply on the 60th
day following the giving of such notice, which 60th day shall be the
effective date of termination; or

(j) at the option of the Company, if

(1) the Company shall determine, in its sole judgment
reasonably exercised in good faith, that the Trust, LASC or KFSC has suffered
a material adverse change in its business or financial condition or is the
subject of material adverse publicity and such material adverse publicity
will have a material adverse impact upon the business and operations of the
Company or the sale of the Contracts, and

(2) after making such determination, the Company has notified
the Trust, LASC and KFSC in writing of such determination and of its intent
to terminate the Agreement, and

(3) after considering the actions taken by the Trust, LASC
and/or KFSC and any other changes in circumstances since the giving of such
notice, such determination shall continue to apply on the 60th day following
the giving of such notice, which 60th day shall be the effective date of
termination; or

(k) at the option of either the Trust or KFSC, if the Company gives
the Trust and KFSC the written notice specified in Section 10.3.(a). hereof
and at the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided, however
any termination under this Section 10.1.(k). shall be effective 45 days after
the notice specified in 10.3.(a). was given; or

<PAGE>

(l) upon another Party's failure to cure a material breach of any
provision of this Agreement within 30 days after written notice thereof.

10.2. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 10.1.(a). may be exercised
for any reason or for no reason.

10.3. NOTICE REQUIREMENT. No termination of this Agreement
shall be effective unless and until the party terminating this Agreement
gives prior written notice to all other parties to this Agreement of
its intent to terminate, which notice shall set forth the basis for such
termination. Furthermore,

(a) in the event that any termination is based upon the provisions
of Article VII., or the provision of Section 10.1.(a), 10.1.(i), 10.1.(j) or
10.1.(k) of this Agreement, such prior written notice shall be given in
advance of the effective date of termination as required by such provisions;
and

(b) in the event that any termination is based upon the provisions
of Section 10.1.(c) or 10.1.(d) of this Agreement, such prior written notice
shall be given at least ninety (90) days before the effective date of
termination.

10.4. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Trust, LASC and KFSC shall, at the option of the Company,
continue to make available additional shares of the Trust pursuant to the
terms and conditions of this Agreement, for all Variable Insurance Products
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Products"). Specifically, without limitation, the
Owners of the Existing Products shall be permitted to reallocate investments
in the Trust, redeem investments in the Trust and/or invest in the Trust upon
the making of additional purchase payments under the Existing Products. The
parties agree that this Section 10.4 shall not apply to any terminations
under Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.

ARTICLE XI. NOTICES

Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.

<PAGE>

If to the Company:
Liberty Life Assurance Company of Boston
175 Berkeley Street
Boston, MA 02117
Attn: Executive Vice President and Chief Operating Officer
With a copy to: Counsel

If to the Trust:
c/o Colonial Management Associates, Inc.
600 Atlantic Avenue
Boston, MA 02111
Attn.: Secretary

If to LASC or KFSC:
125 High Street
Boston, Massachusetts 02110
Attention: President
With a copy to: General Counsel

ARTICLE XII. MISCELLANEOUS

12.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust
hereunder and otherwise understand that the Trustees, officers, agents or
shareholders of the Trust shall have no personal liability for any
obligations entered into by or on behalf of the Trust.

12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the Owners and all information reasonably identified as
confidential in writing be any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come
into the public domain without the express written consent of the affected
party.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

<PAGE>

12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be effected thereby.

12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD, the Internal Revenue Service and state insurance regulators) and
shall permit each other and such authorities reasonable access to its books
and records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.

12.7. The Trust and KFSC agree that to the extent any advisory or other
fees received by the Trust, KFSC, or LASC are determined to be unlawful in
appropriate legal or administrative proceedings, the Trust shall indemnify
and reimburse the Company for any out-of-pocket expenses and actual damages
the Company has incurred as a result of any such proceeding, provided however
that the provisions of Section 8.2(b) and 8.2(c) of this Agreement. shall
apply to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in addition to any
other indemnification and reimbursement obligations of the Trust under this
Agreement.

12.8. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligation, at law or in equity, which the parties hereto are entitled to
under state and federal laws.

12.9. Except as otherwise expressly provided in this Agreement, neither
the Trust, its investment adviser, its principal underwriter, or any
affiliates thereof, or KFSC, shall use any trademark, trade name, service
mark or logo of the Company or any of its affiliates, or any variation of any
such trademark, trade name, service mark or logo, without the Company's prior
written consent, the granting of which shall be at the Company's sole option.

12.10. Except as otherwise expressly provided in this Agreement, neither
the Company nor any of its affiliates shall use any trademark, trade name,
service mark or logo of the Trust, its investment adviser, its principal
underwriter, or any affiliates thereof, or KFSC, or any variation of any such
trademark, trade name, service mark or logo, without the Trust's prior
written consent, the granting of which shall be at the Trust's sole option.

<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized officer
and its seal to be hereunder affixed hereto as of the date first set forth
above.

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

By:

Title:

LIBERTY VARIABLE INVESTMENT TRUST

By:

Title:

LIBERTY ADVISORY SERVICES CORP.

By:

Title:

KEYPORT FINANCIAL SERVICES CORP.

By:

Title:

<PAGE>

SCHEDULE A

TRUST SERIES AVAILABLE UNDER THE VARIABLE INSURANCE PRODUCTS
- ------------------------------------------------------------

Colonial US Stock Fund, Variable Series
Liberty All Star Equity Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial High Yield Securities Fund, Variable Series

SEPARATE ACCOUNTS UTILIZING THE SERIES
- ---------------------------------------

LLAC Variable Account.

VARIABLE INSURANCE PRODUCTS FUNDED BY THE SEPARATE ACCOUNT
- ----------------------------------------------------------

Liberty's Spectrum Select Modified Single Payment Variable Life
Insurance Contract

Liberty's Spectrum Select Last Survivor Modified Single Payment
Variable Life Insurance Contract

<PAGE>

EXHIBIT 1.8(b)(2)

ADMINISTRATIVE SERVICES AGREEMENT

Liberty Life Assurance Company of Boston (the "Company") and Liberty
Advisory Services Corp. (the "Adviser") mutually agree to the arrangements
set forth in this Agreement (the "Agreement") dated as of May ___, 1999.

WHEREAS, Adviser is investment adviser to Liberty Variable Investment
Trust (the "Trust"); and

WHEREAS, the Company issues variable life insurance policies (the
"Contracts"); and

WHEREAS, amounts invested in the Contracts by contract holders are
deposited in separate accounts of the Company which in turn purchase shares
of the portfolios of the Trust, each of which is an investment option offered
by the Contracts; and

WHEREAS, the Trust expects to derive substantial savings in
administrative expenses by virtue of having separate accounts of the Company
as sole shareholders of record of the Trust shares, rather than numerous
public shareholders; and

WHEREAS, neither the Adviser nor the Company has any contractual or
other legal obligation to perform administrative services for the Trust; and

WHEREAS, the Company desires to be compensated for providing
administrative services to the Trust; and

WHEREAS, the Adviser desires that the Trust continue to benefit from the
lower administrative expenses resulting from the administrative services to
be performed by the Company; and

WHEREAS, the Adviser has elected to compensate the Company for providing
administrative services to the Trust from its own assets, rather than request
the Trust to bear the cost of such compensation;

NOW, THEREFORE, the Adviser and the Company agree as follows:

1. ADMINISTRATIVE EXPENSE PAYMENTS.

The Adviser agrees to pay to the Company an amount equal to an annual
rate of x.xx% percent of the average net assets of the Trust that are
attributable to variable life contracts offered by the Company during the
prior quarter. The Adviser shall calculate the payment contemplated by this
Section 1 at the end of each fiscal quarter and will make such payment to the
Company, without demand or notice by the Company within 30 days thereafter.

<PAGE>

2. NATURE OF PAYMENTS.

The parties to this Agreement recognize and agree that the Adviser's
payments to the Company are for administrative services only, do not
constitute payment in any manner for investment advisory services or for the
cost of distribution of Contracts or of Trust shares, and are not otherwise
related to investment advisory or distribution services or expenses.
Administrative expense payments by the Adviser to the Company pursuant to
Section 1 of this Agreement are not intended to be, and shall not be deemed
to be, indicative of the amount of the Adviser's BONA FIDE profits from
serving as investment adviser to the Trust or of the actual cost to the
Company of providing administrative services to the Trust.

3. TERM.

This Agreement shall remain in full force and effect for a period of one
year from the date hereof and shall be automatically renewed thereafter for
successive one-year periods, unless otherwise terminated in accordance with
Section 4 hereof.

4. TERMINATION.

(a) This Agreement will be terminated upon mutual agreement of the
parties hereto in writing. (b) Either party to this Agreement may, by notice
to the other party delivered more than 30 days prior to the expiration of any
one-year term of this Agreement, elect to terminate this Agreement as of the
end of such term.

5. AMENDMENT.

This Agreement may be amended only upon mutual agreement of the parties
hereto in writing.

6. NOTICES.

All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered:

If to the Company:
Liberty Life Assurance Company of Boston
175 Berkeley Street
Boston, MA 02117
Attn: Executive Vice President and Chief Operating Officer
With a copy to: Counsel

If to the Adviser:
125 High Street
Boston, Massachusetts 02110
Attention: President
With a copy to: General Counsel

<PAGE>

7. MISCELLANEOUS.

(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their transferees, successors and assigns. The benefits of
and the right to enforce this Agreement shall accrue to the parties and their
transferees, successors and assigns.

(b) ASSIGNMENT. Neither this Agreement nor any of the rights,
obligations or liabilities of either party hereto shall be assigned without
the written consent of the other party.

(c) INTENDED BENEFICIARIES. Nothing in this Agreement shall be construed
to give any person or entity other than the parties hereto any legal or
equitable claim, right or remedy. Rather, this Agreement is intended to be
for the sole and exclusive benefit of the parties hereto.

(d) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together
constitute one and the same instrument.

(e) APPLICABLE LAW. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts
without reference to conflict of law principles thereof.

8. SEVERABILITY. If any portion of this Agreement shall be found to be
invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but
shall have the same force and effect as if the invalid or unenforceable
portion had not been inserted.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

LIBERTY LIFE ASSURANCE COMPANY LIBERTY ADVISORY SERVICES
OF BOSTON CORP.

BY:________________________ _________________________
[name and title] [name and title]

<PAGE>

SCHEDULE A

ADMINISTRATIVE SERVICES FOR LIBERTY VARIABLE INVESTMENT
TRUST

MAINTENANCE OF BOOKS AND RECORDS

Maintain and inventory of shares purchased to assist transfer agent in recording
issuance of shares.
Perform miscellaneous accounting services to assist transfer
agent in recording transfers of shares (via net purchase orders).
Reconciliation and balancing of the separate account at the Trust level in the
general ledger and reconciliation of cash accounts at general account.

PURCHASE ORDERS

Determination of net amount of cash flow into the Trust.
Reconciliation and deposit of receipts at Trust (wire order) and confirmation
thereof.

REDEMPTION ORDERS

Determination of net amount required for redemptions by Trust.
Notification to Trust of cash required to meet payments.
Cost of share redemptions.

REPORTS

Periodic information reporting to the Trust.
Distribution of annual and semi-annual shareholder reports (to existing contract
owners).

TRUST-RELATED CONTRACT OWNER SERVICES

Mailing costs associated with dissemination of the Trust prospectus and SAI to
existing contract owners.
Telephone support for contract owners with respect to inquiries about the
Trust (not including information about performance or related to sales).

OTHER ADMINISTRATIVE SUPPORT
Providing other administrative support to the Trust as mutually agreed between
the Company and the Trust.
Relieving the Trust of other usual or incidental administrative services
provided to individual shareholders. Preparation of reports to third party
reporting services.

<PAGE>
EXHIBIT 1.8(e)(1)

PARTICIPATION AGREEMENT AMONG

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,

STEIN ROE VARIABLE INVESTMENT TRUST,

STEIN ROE & FARNHAM, INC.

AND

KEYPORT FINANCIAL SERVICES CORP.

This Agreement, made and entered into as of this ______ day of May, 1999
by and among Liberty Life Assurance Company of Boston (the "Company"), on its
own behalf and on behalf of its Separate Accounts, each of which is a
segregated asset account of the Company, Stein Roe Variable Investment Trust
(the "Trust"), Stein Roe & Farnham, Inc. ("SRF") and Keyport Financial
Services Corp. ("KFSC").

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WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (the "1933 Act"); and

WHEREAS, Stein Roe & Farnham, Inc. ("SRF") serves as investment adviser
to the Trust and is duly registered as an investment adviser under the
Investment Advisers Act of 1940 and applicable state securities laws; and
provides certain administrative services to the Trust; and

WHEREAS, Liberty Funds Services, Inc. ("LFSI") serves as transfer agent
to the Trust; and

WHEREAS, the Company has registered or will register certain Separate
Accounts as unit investment trusts under the 1940 Act, unless exempt
therefrom; and

WHEREAS, the Company may rely on certain provisions of the 1933 and 1940
Acts that exempt certain Separate Accounts and Variable Insurance Products from
the registration requirements of the Acts in connection with the sale of
Variable Insurance Products under certain tax-advantaged retirement programs,
described in Article II, Section 2.12 and as provided for by Internal Revenue
Code of 1986, as amended (the "Code"); and

WHEREAS, KFSC serves as distributor of the Trust's shares and is registered
as a broker-dealer with the SEC under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD");

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Trust on behalf of
each Separate Account to fund certain Variable Insurance Products listed in
Schedule A and KFSC is authorized to sell such shares to the Separate Accounts
at net asset value as provided in Article I hereof;

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NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Trust, SRF and KFSC agree as follows:

ARTICLE I. SALE OF FUND SHARES

1.1. KFSC will sell to the Company those shares of the Trust which each
Separate Account orders, executing such orders on a daily basis at the closing
net asset value next computed after receipt by the Separate Accounts of purchase
payments or for the business day on which transactions under Variable Insurance
Products are effected by the Separate Accounts. The Company will notify the
Trust of purchase orders by 9:30 a.m. Eastern time on the next following
Business Day. For purposes of this Section 1.1, LFSI shall be the designee of
the Trust to receive such orders from the Company on behalf of each Separate
Account and receipt by LFSI shall constitute receipt by the Trust. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC.

1.2. The Trust will make its shares available indefinitely for purchase at
the applicable closing net asset value per share by the Company and its Separate
Accounts on those days on which the Trust calculates its net asset value
pursuant to rules of the SEC, and the Trust shall use reasonable efforts to
calculate such net asset value on each Business Day, in accordance with Section
1.11. Notwithstanding the foregoing, the Board of Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Series to any person, or suspend or
terminate the offering of shares of any Series if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole discretion
of the Trustees, acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best interests of
the shareholders of such Series.

1.3. The Trust and KFSC agree that shares of the Trust will be sold only to
Participating Insurance Companies and their Separate Accounts. No shares of any
Series will be sold to the general public.

1.4. The Trust and KFSC will not sell Trust shares to any insurance company
or separate account unless an agreement containing provisions substantially the
same as Articles I, III, V, VII and Sections 2.5 and 2.12 of Article II of this
Agreement is in effect to govern such sales.

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1.5. The Trust will redeem for cash, at the Company's request, any full or
fractional shares of the Trust held by the Company, executing such requests on a
daily basis at the closing net asset value next computed after receipt by the
Separate Accounts of redemption requests or for the Business Day on which
transactions under Variable Insurance Products are effected by the Separate
Accounts. The Company will notify the Trust of redemption requests by 9:30 a.m.
Eastern time on the next following Business Day. For purposes of this Section
1.5, LFSI shall be the designee of the Trust to receive requests for redemption
from the Company on behalf of each Separate Account, and receipt by such
designee shall constitute receipt by the Trust.

1.6. The Trust may suspend the redemption of any full or fractional shares
of the Trust (1) for any period (a) during which the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or (b) during which
trading on the New York Stock Exchange is restricted; (2) for any period during
which an emergency exists (as determined by the SEC) as a result of which (a)
disposal by the Trust of securities owned by it is not reasonably practicable or
(b) it is not reasonably practicable for the Trust fairly to determine the value
of its net assets; or (3) for such other periods as the SEC may by order permit
for the protection of shareholders of the Trust.

1.7. The Company will purchase and redeem the shares of each Series
offered by the then current prospectus of the Trust and in accordance with the
provisions of such prospectus and statement of additional information (the
"SAI") (collectively referred to as the "Prospectus," unless otherwise
provided).

1.8. The Company shall pay for Trust shares on the next Business Day after
an order to purchase Trust shares is placed in accordance with the provisions of
Section 1.1. hereof. Payment shall be in federal funds transmitted by wire, or
may otherwise be provided by separate agreement, with the reasonable expectation
of receipt by the Trust by 2:00 p.m. Eastern time on the next Business Day after
the Trust (or its designee) receives the purchase order.

The Trust shall pay for redeemed Trust shares on the next Business Day
after a request to redeem Trust shares is made in accordance with the provisions
of Section 1.5 hereof. Payment shall be in federal funds transmitted by wire, or
may otherwise be provided by separate agreement, with the

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reasonable expectation of receipt by the Company by 2:00 p.m. Eastern time on
the next Business Day after the Trust (or its designee) receives the
redemption request.

1.10. The Trust, through its designee LFSI, shall furnish same day notice
(by wire or telephone, followed by written confirmation) to the Company of any
income dividends or capital gain distributions payable on the shares of any
Series. The Company hereby elects to receive all such income, dividends and
capital gain distributions as are payable on the shares of each Series in
additional shares of that Series. The Company reserves the right to revoke this
election and to receive all such income, dividends and capital gain
distributions in cash. The Trust shall notify the Company through LFSI of the
number of shares so issued as payment of such income, dividends and
distributions.

1.11. The Trust shall make the closing net asset value per share for each
Series available to the Company on a daily basis as soon as reasonably practical
after closing the net asset value per share is calculated and shall use its best
efforts to make such closing net asset value per share available by 6:30 p.m.,
Boston time. If the Trust provides materially incorrect share net asset value
information (as determined under SEC guidelines), the Company and its designees
shall be entitled to an adjustment to the number of shares purchased or redeemed
to reflect the correct net asset value per share. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to the Company and its
designees. The Trust or SRF, whichever is responsible for a material pricing
error, shall reimburse the Company for its reasonable costs of correcting such
an error.

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ARTICLE II. REPRESENTATIONS AND WARRANTIES

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2.6. The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Trust represents that it is currently in compliance and shall at
all times remain in compliance with the applicable insurance laws of Delaware to
the extent required to perform this Agreement and all other states to the extent
that the Participating Insurance Company advises the Trust, in writing, of such
laws or any changes in such laws, including the furnishing of information not
otherwise available to the Company which is required by state insurance law to
enable the Company to obtain the authority needed to issue the Contracts in any
applicable state.

2.7. KFSC represents and warrants that it is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it is, and
will remain, a member in good standing of the NASD and registered as a
broker-dealer with the SEC. KFSC further represents that it will sell and
distribute the Trust shares in accordance with the laws of the Commonwealth of
Massachusetts and all applicable state and federal securities laws, including
without limitation the 1933 Act, the 1934 Act, and the 1940 Act.

2.8. The Trust represents and warrants that it is and shall remain lawfully
organized and validly existing under the laws of the Commonwealth of
Massachusetts and that it does and will comply in all material aspects with the
1940 Act and the rules and regulations thereunder.

2.9. SRF represents and warrants that it is duly organized and validly
existing under the laws of the State of Illinois and that it is and will remain
duly registered as an investment adviser in all material aspects under all
applicable federal and state securities laws and that it shall perform its
obligations for

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the Trust in compliance in all material respects with all applicable laws of
the State of Illinois and any applicable state and federal securities laws.

2.12. The Company represents and warrants that it will not transfer or
otherwise convey shares of the Trust, without the prior written consent of
KFSC.

ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING

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frequently if a prospectus for a Series is amended) to have the prospectus
for the Contracts and the Series' prospectuses, excluding the SAI, printed
together in one document. With respect to any Series prospectus that is
printed in combination with any one or more Contract prospectus (the
"Prospectus Booklet"), the costs of printing Prospectus Booklets for
distribution to existing Contract owners shall be prorated to the Trust based
on (a) the ratio of the number of pages of the Series prospectus included in
the Prospectus Booklet to the number of pages in the Prospectus Booklet as a
whole; and (b) the ratio of the number of Contract owners with Contract value
allocated to the Series to the total number of Contract owners, PROVIDED THAT
the Trust shall not be required to pay the Company more than $22,500 during
calendar year 1999 as its portion of the cost of printing Prospectus
Booklets, as allocated pursuant to this Section.

(i) solicit voting instructions from Owners;

(ii) vote the Trust shares in accordance with instructions received from
Owners; and

(iii) vote Trust shares for which no instructions have been received in
the same proportion as Trust shares of such Series for which instructions
have been received;

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ARTICLE IV. SALES MATERIAL AND INFORMATION

4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other promotional
material in which the Trust or SRF or any sub-adviser or KFSC is named, at
least 10 days prior to its use. No such material shall be used if the Trust
or its designee objects to such use within 10 days after receipt of such
material.

4.4. The Trust and KFSC shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, any Separate Account, or the

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ARTICLE V. FEES AND EXPENSES

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5.3. The Company shall bear the expenses of distributing the Trust's
proxy materials and reports to Owners.

ARTICLE VI. DIVERSIFICATION

ARTICLE VII. POTENTIAL CONFLICTS

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in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

ARTICLE VIII. INDEMNIFICATION

8.1 INDEMNIFICATION BY THE COMPANY

(a) The Company agrees to indemnify and hold harmless SRF, the KFSC,
the Trust and each of its Trustees, officers, employees and agents and each
person, if any, who controls the Trust within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" and individually the
"Indemnified Party" for purposes of this Article VIII) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company, which consent shall not be
unreasonably withheld) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or
expense and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as
such Losses are related to the sale or acquisition of Trust Shares or the
Contracts and

(ii) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section

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8.2(a)(i) below) or wrongful conduct of the Company or persons under its
control, with respect to the sale or acquisition of the Contracts or Trust
shares; or

(iv) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of
this Agreement; or

(b) The Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to the Trust or
SRF, whichever is applicable. The Company shall also not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear

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the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

The provisions of this Section 8.1 shall survive the termination of
this Agreement.

8.2 INDEMNIFICATION BY THE ADVISER

(a) SRF agrees to indemnify and hold harmless the Company, the
underwriter of the Contracts and each of its directors and officers and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" and individually an
"Indemnified Party" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of SRF, which consent shall not be unreasonably
withheld) or expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses") to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such Losses are
related to the sale or acquisition of the Trust's Shares or the Contracts and:

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the Registration
Statement, prospectus or sales literature of the Trust (or any amendment or
supplement to any of the foregoing) (collectively, the "Trust Documents") or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission of such alleged statement or omission was made in reliance upon and
in conformity with written information furnished to SRF or Trust by or on
behalf of the Company for use in the Registration

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Statement or prospectus for the Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale of
the Contracts or Trust shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
disclosure documents or sales literature for the Contracts not supplied by
SRF or persons under its control) or wrongful conduct of the Trust, SRF or
KFSC or persons under their control, with respect to the sale or distribution
of the Contracts or Trust shares; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by SRF or KFSC in this Agreement or arise
out of or result from any other material breach of this Agreement by SRF or
KFSC, as limited by and in accordance with the provisions of Sections 8.2(b)
and 8.2(c) hereof.

(b) SRF shall not be liable under this indemnification provision
with respect to any Losses to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such Indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to each Company or the Account, whichever is
applicable.

(c) SRF shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified SRF in writing within a reasonable time
after the summons or other first legal process giving information of the
nature of the

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claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify SRF of any such claim shall not
relieve SRF from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, SRF will be entitled to participate, at its own expense,
in the defense thereof. SRF also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from SRF to such party of SRF's election to assume the defense
thereof, the Indemnified Party shall bear the expenses of any additional
counsel retained by it, and SRF will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.

(d) The Company agrees promptly to notify SRF of the commencement of
any litigation or proceedings against it or any of its officers or directors
in connection with the issuance or sale of the Contracts or the operation of
each Account.

(e) If, in any participation agreement to which SRF is a party
executed after the date of this Agreement (a "Later Agreement"), SRF shall
agree to indemnify a participating insurance company other than the Company
for the Trust's failure to comply with the Subchapter M and Section 817(h)
diversification requirements and regulations under the Internal Revenue Code,
then SRF agrees that it shall indemnify the Company pursuant to this
Agreement to the same extent it is required to indemnify the other
participating company under a Later Agreement. The provisions of this Section
8.2 shall survive the termination of this Agreement.

8.3 INDEMNIFICATION BY THE TRUST

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under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

(d) The Company and SRF agree promptly to notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
the Account, or the sale or acquisition of share of the Trust.

The provisions of this Section 8.3 shall survive the termination of
this Agreement.

ARTICLE IX. APPLICABLE LAW

ARTICLE X. TERMINATION

10.1. This Agreement shall terminate:

(a) at the option of any party upon six months advance written
notice to the other parties; or

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(c) at the option of the Trust, SRF or KFSC, if formal
administrative proceedings are instituted against the Company by the NASD,
the SEC, the Insurance Commissioner or any other regulatory body regarding
the duties of the Company under this Agreement or related to the sale of the
Variable Insurance Products, with respect to the operation of a Separate
Account, or the purchase of the Trust shares, provided, however, that the
Trust or KFSC, as the case may be, shall determine in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform its
obligations under this Agreement; or

(d) at the option of the Company, if formal administrative
proceedings are instituted against the Trust, SRF or KFSC by the NASD, the
SEC, or any state securities or insurance department or any other regulatory
body, provided, however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Trust, SRF or KFSC to perform
its respective obligations under this Agreement; or

(h) at the option of the Company, if the Trust fails to meet the
diversification requirements specified in Article VI. hereof; or if the
Company reasonably believes that the Trust may fail to meet the
diversification requirements set forth in Article VI of this Agreement; or

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(i) at the option of the Trust, SRF or KFSC, if:

(1) the Trust, SRF or KFSC, respectively, shall determine, in
their sole judgment reasonably exercised in good faith, that the Company has
suffered a material adverse change in its business or financial condition or
is the subject of material adverse publicity and that such material adverse
publicity will have a material adverse impact upon the business and
operations of the Trust, SRF or KFSC,

(2) the Trust, SRF or KFSC shall notify the Company in writing
of such determination and its intent to terminate this Agreement, and

(3) after considering the actions taken by the Company and any
other changes in circumstances since the giving of such notice, such
determination of the Trust, SRF or KFSC shall continue to apply on the 60th
day following the giving of such notice, which 60th day shall be the
effective date of termination; or

(j) at the option of the Company, if

(1) the Company shall determine, in its sole judgment
reasonably exercised in good faith, that the Trust, SRF or KFSC has suffered
a material adverse change in its business or financial condition or is the
subject of material adverse publicity and such material adverse publicity
will have a material adverse impact upon the business and operations of the
Company or the sale of the Contracts, and

(2) after making such determination, the Company has notified
the Trust, SRF and KFSC in writing of such determination and of its intent to
terminate the Agreement, and

(3) after considering the actions taken by the Trust, SRF
and/or KFSC and any other changes in circumstances since the giving of such
notice, such determination shall continue to apply on the 60th day following
the giving of such notice, which 60th day shall be the effective date of
termination; or

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(l) upon another Party's failure to cure a material breach of any
provision of this Agreement within thirty (30) days after written notice
thereof.

10.2. It is understood and agreed that the right of any party hereto
to terminate this Agreement pursuant to Section 10.1.(a). may be exercised
for any reason or for no reason.

10.3. NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to
terminate, which notice shall set forth the basis for such termination.
Furthermore,

(b) in the event that any termination is based upon the provisions
of Section 10.1.(c) or 10.1.(d) of this Agreement, such prior written notice
shall be given at least 90 days before the effective date of termination.

10.4. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Trust, SRF and KFSC shall, at the option of the Company,
continue to make available additional shares of the Trust pursuant to the
terms and conditions of this Agreement, for all Variable Insurance Products
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Products"). Specifically, without limitation, the
Owners of the Existing Products shall be permitted to reallocate investments
in the Trust, redeem investments in the Trust and/or invest in the Trust upon
the making of additional purchase payments under the Existing Products. The
parties agree that this Section 10.4 shall not apply to any terminations
under Article VII and the effect of such Article VII terminations shall be
governed by Article VII of this Agreement.

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ARTICLE XI. NOTICES

If to the Company:

Liberty Life Assurance Company of Boston
175 Berkeley Street
Boston, MA 02117
Attn: Executive Vice President and Chief Operating Officer
With a copy to: Counsel

If to the Trust:
c/o Stein Roe & Farnham, Inc.
One South Wacker Drive
Chicago, IL 60606
Attn.: Secretary

If to SRF:
Stein Roe & Farnham, Inc.
One South Wacker Drive
Chicago, IL 60606
Attn.: Secretary

If to KFSC:
125 High Street
Boston, Massachusetts 02110
Attention: President
With a copy to: General Counsel

ARTICLE XII. MISCELLANEOUS

12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the Owners and all information reasonably

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identified as confidential in writing be any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize
such names and addresses and other confidential information until such time
as it may come into the public domain without the express written consent of
the affected party.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be effected thereby.

12.7. The Trust and KFSC agree that to the extent any advisory or other
fees received by the Trust, KFSC, or SRF are determined to be unlawful in
appropriate legal or administrative proceedings, the Trust shall indemnify
and reimburse the Company for any out-of-pocket expenses and actual damages
the Company has incurred as a result of any such proceeding, provided however
that the provisions of Section 8.2(b) and 8.2(c) of this Agreement. shall
apply to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in addition to any
other indemnification and reimbursement obligations of the Trust under this
Agreement.

12.9. Except as otherwise expressly provided in this Agreement, neither
the Trust, its investment adviser, its principal underwriter, or any
affiliates thereof, or KFSC, shall use any

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trademark, trade name, service mark or logo of the Company or any of its
affiliates, or any variation of any such trademark, trade name, service mark
or logo, without the Company's prior written consent, the granting of which
shall be at the Company's sole option.

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

By:

Title:

STEIN ROE VARIABLE INVESTMENT TRUST

By:

Title:

STEIN ROE & FARNHAM, INC.

By:

Title:

KEYPORT FINANCIAL SERVICES CORP.

By:

Title:

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SCHEDULE A

TRUST SERIES AVAILABLE UNDER THE VARIABLE INSURANCE PRODUCTS
- ------------------------------------------------------------

Growth Stock Fund
Balanced Fund
Money Market Fund

SEPARATE ACCOUNTS UTILIZING THE SERIES
- --------------------------------------

LLAC Variable Account.

VARIABLE INSURANCE PRODUCTS FUNDED BY THE SEPARATE ACCOUNT
- ----------------------------------------------------------

Liberty's Spectrum Select Modified Single Payment Variable
Life Insurance Contract
Liberty's Spectrum Select Last Survivor Modified Single Payment
Variable Life Insurance Contract

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EXHIBIT 1.8(e)(2)

ADMINISTRATIVE SERVICES AGREEMENT

Liberty Life Assurance Company of Boston (the "Company") and Stein Roe &
Farnham, Inc. (the "Adviser") mutually agree to the arrangements set
forth in this Agreement (the "Agreement") dated as of May ___, 1999.

WHEREAS, Adviser is investment adviser to SteinRoe Variable Investment
Trust (the "Trust"); and

WHEREAS, the Company issues variable life insurance policies (the
"Contracts"); and

WHEREAS, neither the Adviser nor the Company has any contractual or
other legal obligation to perform administrative services for the Trust; and

WHEREAS, the Company desires to be compensated for providing
administrative services to the Trust; and

WHEREAS, the Adviser desires that the Trust continue to benefit from the
lower administrative expenses resulting from the administrative services to
be performed by the Company; and

WHEREAS, the Adviser has elected to compensate the Company for providing
administrative services to the Trust from its own assets, rather than request
the Trust to bear the cost of such compensation;

NOW, THEREFORE, the parties agree as follows:

1. ADMINISTRATIVE EXPENSE PAYMENTS.

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2. NATURE OF PAYMENTS.

3. TERM.

4. TERMINATION.

(a) This Agreement will be terminated upon mutual agreement of the
parties hereto in writing.

(b) Either party to this Agreement may, by notice to the other party
delivered more than 30 days prior to the expiration of any one-year term of
this Agreement, elect to terminate this Agreement as of the end of such term.

5. AMENDMENT.

This Agreement may be amended only upon mutual agreement of the parties
hereto in writing.

6. NOTICES.

All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered:

If to the Company:
Liberty Life Assurance Company of Boston
175 Berkeley Street
Boston, MA 02117
Attn: Executive Vice President and Chief Operating Officer
With a copy to: Counsel

If to the Adviser:
c/o Stein Roe & Farnham, Inc.
One South Wacker Drive
Chicago, IL 60606
Attn.: Secretary

<PAGE>

7. MISCELLANEOUS.

(b) ASSIGNMENT. Neither this Agreement nor any of the rights,
obligations or liabilities of either party hereto shall be assigned without
the written consent of the other party.

(d) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together
constitute one and the same instrument.

(f) SEVERABILITY. If any portion of this Agreement shall be found to be
invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but
shall have the same force and effect as if the invalid or unenforceable
portion had not been inserted.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

LIBERTY LIFE ASSURANCE COMPANY STEIN ROE & FARNHAM, INC.
OF BOSTON

BY:________________________ BY:_________________________
[name and title] [name and title]

<PAGE>

SCHEDULE A

ADMINISTRATIVE SERVICES FOR STEIN ROE VARIABLE INVESTMENT
TRUST

MAINTENANCE OF BOOKS AND RECORDS

Maintain and inventory of shares purchased to assist transfer agent in
recording issuance of shares.
Perform miscellaneous accounting services to assist transfer agent in
recording transfers of shares (via net purchase orders).
Reconciliation and balancing of the separate account at the Trust level in
the general ledger and reconciliation of cash accounts at general account.

PURCHASE ORDERS

Determination of net amount of cash flow into the Trust.
Reconciliation and deposit of receipts at Trust (wire order) and confirmation
thereof.

REDEMPTION ORDERS

Determination of net amount required for redemptions by Trust.
Notification to Trust of cash required to meet payments.
Cost of share redemptions.

REPORTS

Periodic information reporting to the Trust.
Distribution of annual and semi-annual shareholder reports (to existing
contract owners).

TRUST-RELATED CONTRACT OWNER SERVICES

Mailing costs associated with dissemination of the Trust prospectus and SAI
to existing contract owners.
Telephone support for contract owners with respect to inquiries about the
Trust (not including information about performance or related to sales).

OTHER ADMINISTRATIVE SUPPORT Providing other administrative support to the
Trust as mutually agreed between the Company and the Trust.
Relieving the Trust of other usual or incidental administrative services
provided to individual shareholders.
Preparation of reports to third party reporting services.

<PAGE>

Exhibit 2

William J. O'Connell, Mail Stop 07F
VICE PRESIDENT AND ASSISTANT GENERAL COUNSEL
175 Berkeley Street Boston, MA 02117
Telephone: (617) 574-5808
Fax: (617) 350-8864

August 26, 1999

Liberty Life Assurance Company of Boston
175 Berkeley Street
Boston, MA 02117

RE: LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
LLAC VARIABLE ACCOUNT
REGISTRATION STATEMENT ON FORM S-6 (FILE NO. 333-76931)

Dear Sirs:

This opinion is furnished in connection with the filing of a
Registration Statement on Form S-6 ("Registration Statement") by LLAC
Variable Account ("Separate Account"). The Registration Statement covers an
indefinite amount of interests under the variable portion of Flexible Premium
Variable Life Insurance Contracts ("Contracts") offered by Liberty Life
Assurance Company of Boston ("Liberty Life"). Premiums paid under the
Contracts may be allocated by Liberty Life to the Separate Account in
accordance with the owners' direction with reserves established by Liberty
Life to support such Contracts.

The Contracts are designed to provide life insurance protection and are
to be offered in a manner described in the Prospectus, which is included in
the Registration Statement.

The Contracts will be sold only in jurisdictions authorizing such sales.

I have examined all such corporate records of Liberty Life and such
other documents and laws as I consider appropriate as a basis for this
opinion. On the basis of such examination, it is my opinion that:

1. Liberty Life is a corporation duly organized and validly existing
under the laws of the Commonwealth of Massachusetts.

2. The Separate Account is an account established and maintained by
Liberty Life pursuant to the laws of the Commonwealth of Massachusetts,
under which

<PAGE>

income, gains and losses, whether or not realized, from assets allocated
to the Separate Account, are, in accordance with the Contracts, credited
to or charged against the Separate Account without regard to other
income, gains or losses of Liberty Life.

3. Assets allocated to the Separate Account will be owned by Liberty Life.
The Contracts provide that the portion of the assets of the Separate
Account equal to the reserves and other Contract liabilities with
respect to the Separate Account will not be chargeable with liabilities
arising out of any other business Liberty Life may conduct.

4. When issued and sold as described above, the Contracts will be duly
authorized and will constitute validly issued and binding obligations
of Liberty Life in accordance with their terms.

I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.

Very truly yours,

/s/ William J. O'Connell
William J. O'Connell
Vice President and Assistant General Counsel

<PAGE>

Exhibit 6
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
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Variable Universal Life Insurance

GRAPHIC

Procedures
Memorandum

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REVISED 07/06/99

<PAGE>

TABLE OF CONTENTS

ISSUANCE AND RELATED TRANSACTIONS.............................................4
1. ISSUANCE.................................................................4
A. APPLICATIONS AND POLICY ISSUANCE......................................4
B. EFFECTIVE DATE OF CONTRACT............................................4
C. CONTRACT AMENDMENTS...................................................5
D. INSUFFICIENT FUNDS ON AN INITIAL PAYMENT..............................5

2. FREE LOOK................................................................5
A. FREE LOOK PERIOD AND ALLOCATION OF EXCESS INITIAL PREMIUM.............5

3. GUARANTEED DEATH BENEFIT.................................................7
4. REINSTATEMENT............................................................7
5. FACE AMOUNT CHANGES......................................................8
6. DEATH BENEFIT OPTION CHANGES.............................................8
7. DEATH BENEFIT AT AGE 100.................................................8
8. ADDITIONAL UNSCHEDULED PAYMENTS..........................................9

REDEMPTIONS, TRANSFERS, AND LOANS.............................................9
9. LOANS....................................................................9
A. PREFERRED LOANS.......................................................9
B. LOAN PAYMENTS.........................................................9
C. LOAN REPAYMENTS.......................................................9
D. SOURCE OF LOANS......................................................10

10. WITHDRAWALS.............................................................10
A. MINIMUM AMOUNT REMAINING AFTER PARTIAL WITHDRAWAL....................10
B. PARTIAL WITHDRAWALS WITH DEATH BENEFIT OPTION 1 AND 2................10
C. TAX WITHHOLDING......................................................11

11. SURRENDERS..............................................................12

12. TRANSFERS...............................................................12
A. MINIMUM TRANSFER AMOUNTS AND TIMING..................................12
B. TELEPHONE TRANSFERS..................................................12
C. CONFIRMATIONS OF TRANSFER REQUESTS...................................13
D. ASSET REBALANCING....................................................13
E. ASSET ALLOCATION MODELS..............................................13
F. DOLLAR COST AVERAGING................................................14

DEATH........................................................................14

13. DEATH BENEFIT...........................................................16
A. DEFINITION OF DUE PROOF OF DEATH.....................................16
B. DEATH BENEFIT CALCULATION............................................16

EXHIBIT 1....................................................................17

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2

<PAGE>

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
Memorandum Regarding Issuance, Face Amount Increases,
Redemption and Transfer Procedures
Date: 7/1/99

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

This memorandum sets forth the information called for by Rule
6e-3(T)(b)(12)(iii) under the Investment Company Act of 1940 (the "1940 Act")
with respect to procedures for issuance, face amount changes, changes in
death benefit option, redemptions and transfers under the flexible premium
variable life insurance Contract form FPV-98150, or state-specific variations
of such contract forms ("Contracts") offered through LLAC Variable Account
(the "Separate Account") of the Liberty Life Assurance Company of Boston
("Liberty Life"). That rule provides an exemption for separate accounts,
their investment advisors, principal underwriters and sponsoring insurance
companies from Sections 2(c), 22(d), 22(e), and 27(c)(1) of the 1940 Act and
Rule 22c-1 thereunder for issuance, transfer and redemption procedures under
flexible premium variable life insurance Contracts to the extent necessary to
comply with Rule 6e-3(T), state insurance law and regulations, and
established administrative procedures of the life insurance company. In
order to qualify for the exemption, procedures must be reasonable, fair and
not discriminatory and they must be disclosed in the registration statement
filed by a separate account. In certain states the Contracts may be offered
as group contracts with individual ownership represented by Certificates.
The discussion of Contracts in this document applies equally to Certificates
under group contracts, unless the context specifies otherwise.

Liberty Life believes its procedures meet the requirements of Rule 6e-3 (T)
(b) (12) (iii) and states the following:

1. Because of the insurance nature of the contract and due to the
requirements of state insurance laws, the procedures necessarily differ in
significant respects from procedures for mutual funds and contractual plans
for which the 1940 Act was designed.

2. Many of the procedures used by Liberty Life have been adopted from
established procedures for variable universal life insurance contracts of
other companies and from Liberty Life's established procedures for its
universal life insurance contracts.

3. In structuring its procedures to comply with Rule 6e3(T), state insurance
laws and established administrative procedures, Liberty Life has attempted to
comply with the intent of the 1940 Act.

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3

<PAGE>

4. In general, state insurance laws require that Liberty Life procedures be
reasonable, fair and not discriminatory.

5. Because of the nature of the insurance product, it is often difficult to
determine precisely when Liberty Life procedures deviate from those required
under Sections 22(d), 22(e) or 27 (c) (1) of the 1940 Act or Rule 22c-1
thereunder. Accordingly, set out below is a summary of the principal
contract provisions and procedures not otherwise described in the prospectus
which may be deemed to constitute, either directly or indirectly, such a
deviation. The summary, while comprehensive, does not attempt to treat each
and every procedure or variation which might occur and includes certain
procedural steps which do not constitute deviations from the above-cited
sections or rule.

ISSUANCE AND RELATED TRANSACTIONS

1. ISSUANCE

A. Applications and Policy Issuance
An applicant may apply to purchase a contract by submitting a written
application to Liberty Life through one of our authorized agents. We will
not issue Contracts to insure people who are older than age 80. The
minimum face amount for a Contract is $50,000. Upon receipt of a completed
application, Liberty Life will follow certain insurance underwriting (e.g.
evaluation of risks) procedures designed to determine whether the applicant
is insurable. This process may involve such verification procedures as
medical examinations and blood testing, and may require that further
information be provided by the proposed insured before a determination can
be made. A Contract will not be issued until the underwriting procedure
has been completed. Acceptance of an application is subject to Liberty
Life's insurance underwriting rules.

B. Effective Date of Contract
The Contract Date is the effective date of insurance coverage under the
Contract. Liberty Life uses the Contract Date to determine Contract
Anniversaries, Contract Years and Monthly Dates. For purposes of
establishing a Contract Date on all flexible payment variable universal
life contracts the Contract Date will be the later of underwriting approval
date or the date the initial premium is received by an authorized agent of
Liberty Life. Liberty Life will allocate the initial premium, up to a
company set maximum (currently $2000), directly to the Contract Owner's
chosen allocations as of the Contract Date. Any initial premium in excess
of the company set maximum will be allocated to the Fixed Account 5
days after the end of the Free Look Period as described in Section 2A, at
which time the accrued value in the Fixed Account will be transferred to
the Contract Owner's chosen allocations. The Company reserves the right to
change the amount of initial premium that is allocated directly into the
sub-accounts without notice. All subsequent payments, unless underwriting
is required, will be allocated directly to the Contract Owner's chosen
allocation as of the date of receipt at Liberty Life's Service Center.
Liberty Life reserves the right to reject any premium that would cause the
Contract not to meet the definition of life insurance contract under the
Tax Code.

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4

<PAGE>

If an application requires full underwriting, and an initial payment has been
accepted by an authorized agent of Liberty Life, Liberty Life will issue a
Temporary Insuring Agreement. Temporary insurance is subject to the terms
and maximums stated in the Temporary Insuring Agreement. Liberty Life will
not credit interest to such payments prior to the Contract Date unless
required by state law.

If the application is declined by Liberty Life the initial payment will be
refunded to the proposed owner and will include interest where mandated by
state regulation.

C. Contract Amendments
A Contract Amendment is a change to certain information shown on the Contract
application (see Exhibit 1). If there is a change to this certain Contract
information, Liberty Life will send out a Contract Amendment for signature.
The Contract Date of any Contract with a Contract Amendment will be the
date the Amendment is signed. Liberty Life will not allocate the Initial
Payment to the Separate Account until the Contract Amendment is received at
the Service Center. Once the signed Contract Amendment is received at the
Service Center, the Free Look Period will begin as of the date the
Amendment is signed. If the Contract Amendment is outstanding for thirty
days, Liberty Life will cancel the Contract and return the premium to the
Contract Owner without interest.

D. Insufficient Funds on an Initial Payment
If Liberty Life receives a payment that is returned for insufficient funds
the Contract will not be put in-force. Liberty will request a certified
check for the initial payment. Once the check is received Liberty will
prepare an amendment for the Contract owner's signature changing the
Contract Date. The Contract Date will become the date of the signed
amendment. The certified check will sit in a non-interest bearing account
until the Contract Date arrives. At that time the payment will be processed
in accordance with Liberty Life's regular initial payment processing. The
Free Look Period will begin from the Contract Date.

2. FREE LOOK

A. Free Look Period and Allocation of Excess Initial Premium
The Contract Owner may cancel the Contract by returning it to us within the
Free Look period as provided by state law. If the Contract Date is the same
date as the underwriting approval date, Liberty Life will assume the Free
Look Period begins 5 days after the Contract Date and allocate any excess
Initial Premium 5 days after the end of the state mandated Free Look
Period, assuming 5 days of mail time from Contract approval to Contract
Owner's receipt of the Contract and 5 days of mail time from the end of the
state mandated Free Look Period for Liberty Life to receive the
cancellation request. If the application is submitted without the Initial
Premium and Liberty Life approves the Contract, the Free Look Period will
begin on the day an authorized agent

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5

<PAGE>

of Liberty Life delivers the Contract and receives the Initial Premium and
Liberty Life will allocate any excess Initial Premium 5 days after the end of
the state mandated Free Look Period assuming 5 days of mail time from the end
of the state mandated Free Look Period.

Liberty Life will honor any request to cancel a Contract mailed within the
state mandated Free Look Period. Delays in delivery or mailing time will
not result in a denied cancellation.

The following table sets out the Free Look period for each state on non-
replacement business:

- -------------------------------------------------------------------------------
10 Day Free Look Period
- -------------------------------------------------------------------------------
AL, AK, AZ, AR, CA, CT, DC, DE, FL, GA, HI, IL, IN, IA, KS, KY, LA, ME,
MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, OH, OK,
OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY
- -------------------------------------------------------------------------------
15 Day Free Look Period
- -------------------------------------------------------------------------------
CO
- -------------------------------------------------------------------------------
20 Day Free Look Period
- -------------------------------------------------------------------------------
ID, ND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

If the Contract Owner returns the Contract during the Free Look Period,
coverage terminates and Liberty Life will pay the Contract Owner an amount
equal to either the Initial Payment or Account Value, as required by state
law.

The Free Look Period will not begin for any states that require a delivery
notice (California, Colorado and West Virginia) or for any Contracts which
require an Amendment, until they are signed. Upon receipt of the state
required delivery notice or any Contract Amendment, Liberty Life will begin
the Free Look period as of the date the delivery notice or the Contract
Amendment is signed.

If a Contract is issued with a Contract Amendment, Liberty Life will not
consider a Contract to be delivered until any and all outstanding Contract
Amendments have been signed and received. Liberty Life will begin the Free
Look Period for Contracts with Amendments on the date the Amendment is
signed. If an outstanding Amendment is not signed and returned within 30
days to the Service Center, Liberty Life reserves the right to withdraw the
offer of coverage, and return any premium without interest.

3. GUARANTEED DEATH BENEFIT

The Flexible Premium Variable Life Insurance Contract has three Death
Benefit Guarantees. The first is called "3-Year Guaranteed Coverage." The
second is called the "Limited Guaranteed Coverage." The third is called
"Lifetime Guaranteed Coverage." Three-year Guaranteed Coverage is intended
to ensure that your Contract remains in force for the first three
Contracts years. Limited Guaranteed Coverage is intended to ensure that your
Contract remains in force until age 75 or 15 years from the

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6

<PAGE>

Contract Date, whichever is later. Lifetime Guaranteed Coverage is
intended to ensure that your Contract remains in force for the Insured's
lifetime.

To keep the 3-Year Guarantee in effect, the following conditions must be
met:

1. Total Premiums minus withdrawals of Premium must at least equal the total
monthly 3-Year Guaranteed Coverage Premiums less such Premiums for the
prior three months; and

2. There are no outstanding loans against the Contract.

To keep the Limited Guarantee in effect, the following conditions must be
met:

1. Total Premiums minus withdrawals of Premium must at least equal the total
monthly Limited Guaranteed Coverage Premiums less such Premiums for the
prior three months; and

2. There are no outstanding loans against the Contract.

To keep the Lifetime Guarantee in effect the following conditions must be
met:

1. Total Premiums minus withdrawals of Premium must at least equal the total
monthly Lifetime Guaranteed Coverage Premiums less such Premiums for the
prior three months; and

2. There are no outstanding loans against the Contract.

However, if Lifetime Guaranteed Coverage is in effect at the Insured's age
100, Liberty Life will not require additional Premium, but the Death Benefit
thereafter will be the greater of the Face Amount or 101% of the Account
Value.

The three month lag in taking Coverage Premiums into consideration under
these formulas is intended to provide a grace period for the receipt of
delayed premiums. In Liberty Life's discretion, however, it may shorten or
eliminate the three-month lag.

Provided these conditions are met, the Contract will stay in force even if
the Surrender Value is insufficient to cover the monthly deduction. The
Account Value will continue to fluctuate based on the Contract performance
and the accrual of Contract charges. Account Value will never be less than
zero. However, if the Account Value is insufficient to cover the monthly
deduction, Liberty Life will track accrued but unpaid Contract charges, and
will deduct such charges, to the extent possible, on the next Monthly Date
on which the Account Value is positive (i.e., after additional Premium is
paid).

If Limited Guaranteed Coverage or Lifetime Guaranteed Coverage terminates,
we will specify a period of not less than one year within which the
Contract owner may reinstate the Guaranteed Coverage by paying sufficient
additional Premium to meet the applicable requirement set forth above.
Three-Year Guaranteed Coverage may not be reinstated if it terminates.

4. REINSTATEMENT

If a Contract lapses because of insufficient Surrender Value to cover the
monthly deductions, it may be reinstated at any time within five years from
the end of the Grace Period and before the Maturity Date. Reinstatement is
subject to:

A. Receipt of evidence of insurability satisfactory to Liberty Life;

B. Payment of the next three monthly deductions from the date of
reinstatement, plus any outstanding interest on indebtedness and any
outstanding fees that had accrued prior to lapse. (Note: Interest does
not accrue during the lapse period).

C. Reinstatement of any indebtedness against the Contract. If outstanding
indebtedness is repaid in full during the reinstatement period, it will
always be sufficient to reinstate a Flexible Premium Variable Contract
provided that the minimum premium requirement has been met or exceeded
even if the indebtedness is less than the amount otherwise necessary to
reinstate the Contract.

The effective date of reinstatement of a Contract will be the date that
Liberty Life approves the reinstatement request. Suicide and incontestability
provisions will apply from the effective date of reinstatement. Unless the
Contract Owner pays a total premium which is

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7
<PAGE>

sufficient to cover the Limited or Lifetime Guaranteed Coverage Premium,
the guaranteed death benefit will be lost.

5. FACE AMOUNT CHANGES

While the Contract is in force, a Contract owner may request a Face Amount
Change. The Contract Owner needs to submit the proper Administrative Form.
If the Contract Owner requests an increase in Face Amount, the additional
coverage will be subject to underwriting. After underwriting approval, new
spec pages are issued showing the new amount of coverage and a new
guarantee premium will be established. An additional withdrawal charge
will apply with respect to the increased portion of the Face Amount, based
on the Insured's age at the time of the increase and the amount of the
increase. The withdrawal charge will amortize over the 10 years from the
date of the increase.

A Contract Owner may also request a reduction in Face Amount. The Face
Amount may not be reduced below $50,000. New spec pages will be issued
reflecting the new Face Amount. New guarantee premiums will be established
and a Withdrawal Charge based on the proportion of Face Amount reduction
will be subtracted from the Account Value.

6. DEATH BENEFIT OPTION CHANGES

At any time during the lifetime of the Contract a Contract Owner may
request a change in the Contract's Death Benefit Option. The Contract
Owner needs to submit the proper Administrative Form. If the Contract
Owner changes the Death Benefit Option from Option 1 (level) to Option 2
(increasing), the Face Amount will decrease by the amount equal to the
account value. The net amount at risk for Liberty Life will remain the
same. A change from Option 1 to Option 2 will not be made if the new Face
Amount would be less than $50,000.

If the Contract Owner changes from Option 2 (increasing) to Option 1
(level), the Face Amount will increase by the amount equal to the Account
Value. The net amount at risk for Liberty Life will remain the same.

The change will take effect on the Monthly Date immediately following
Liberty's approval of the request. Liberty does not impose a charge on a
change of Death Benefit Option and such a change by itself will not
immediately change the Account Value

7. DEATH BENEFIT AT AGE 100

The Contract will stay in force as long as monthly deductions can be
covered up to the Insured's age 100. At age 100, no additional premium
will be accepted into the Contract and monthly deductions cease. Separate
Account Expense Charges (60 basis points), Fund Expenses, and the Contract
Fee will continue to be taken. If the Lifetime Coverage Guarantee is in
affect at age 100, the Death Benefit will be the greater of the Face
Amount or 101% of the Account Value. Otherwise, the Death Benefit will be
equal to 101% of the Account Value. The Account Value will always equal
the Cash Value since there will no longer be any Surrender Charges at age
100.

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8

<PAGE>

8. ADDITIONAL UNSCHEDULED PREMIUMS

A Contract Owner may submit additional unscheduled Premiums (i.e. Premiums
in addition to Planned Premiums) to the Contract at anytime while the
Contract is in force and before the Insured is age 100. These Premiums
will be evaluated within the structure of the Contract. If it is
determined that these Premiums exceed the larger of the sum of the
guideline level premiums or the guideline single premium as determined by
Section 7702 of the Tax Code these Premiums will be underwritten in order
to increase the Face Amount of the Contract. This will also increase the
Guaranteed Death Benefit and Guaranteed Coverage Premiums. While these
Premiums are being underwritten the money will be placed in a non-interest
bearing account. Upon underwriting approval, the Premiums will be applied
to the Contract with a current date.

If a Premium is unscheduled and increases the Death Benefit more than it
increases the Account Value and does not exceed the guideline premium
limitations of Section 7702, it will be underwritten. Upon underwriting
approval the payments will be applied to the Contract with a current date.
The Face Amount will not be increased nor will the Guaranteed Death
Benefit or Guaranteed Coverage Premiums.

If the payments do not exceed the above guidelines they will be directly
applied to the Contract as of the date of receipt at our Service Center.

If a payment would cause a Contract to be treated as a modified endowment
contract ("MEC") status under Section 7702A of the Tax Code, the payment
will be applied as of the date received by Liberty Life. The Contract
Owner will have up to 30 days after the next Contract Anniversary to
request return of sufficient Premium that the Contract will not be treated
as a MEC.

REDEMPTIONS, TRANSFERS, AND LOANS

9. LOANS

A. Preferred Loans
Liberty Life will determine the amount available for a preferred loan by
determining the earnings of the Contract since its inception. Earnings
equal: (A) minus (B) minus (C) minus (D) plus (E); where

(A) is the Account Value
(B) is total payments made
(C) is the preferred loan balance
(D) is accrued loan interest; and
(E) is all prior partial withdrawals in excess of earnings.

B. Loan Payments
Once a Contract loan is requested and approved by Liberty Life, the
payment will be sent out within seven days. All requirements must be
satisfied in order for Liberty Life to process a loan. Loan requests must
be submitted in writing to the Service Center.

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9

<PAGE>

Liberty Life Service Center
100 Liberty Way
Dover, NH 03820

C. Loan Repayments
Contract Owners may repay a loan in full or make a partial repayment on
any Contract loan while the Contract is still in effect. Liberty Life
will treat any payment we receive from the Contract Owner that does not
meet the current scheduled premium amount due as a loan repayment unless
otherwise instructed in writing. Any portion of a payment in excess of the
loan repayment will be treated as additional premium. Liberty Life will
deduct an amount equal to the loan repayment from the loan account and
allocate the payment proportionately among the Sub-Accounts and the Fixed
Account on the same basis as additional payments are allocated, unless
instructed otherwise. If a specific loan is not selected for Loan
Repayment, the last loan taken will be the first loan repaid.

D. Source of Loans
The Contract Owner can specify the source of the loan (the accounts he or
she would like the money removed from), but cannot direct that more than a
pro rata share of the loan be made from the Fixed Account. If the
Contract Owner does not specify the source of the loan, the loan will be
made from the Sub-Accounts and Fixed Account based on the proportionate
Account Value in each account.

10. Withdrawals

A. Minimum Amount Remaining After Partial Withdrawal
Partial withdrawals are permitted after the first Contract year provided
Liberty Life receives a request in writing signed by the Contract Owner.
Partial withdrawals must be at least $250. If in a Contract year more
than one partial withdrawal is taken, Liberty Life may charge a
transaction fee of the lesser of $25 or 2% of the amount of the subsequent
partial withdrawal(s). The Contract Owner may select the Sub-Accounts
from which to deduct the amount of the partial withdrawal. If the Contract
Owner does not indicate which accounts the withdrawal will be deducted
from, the amount of the partial withdrawal will be deducted on a pro rata
basis from the Sub-Accounts and the Fixed Account. The Contract Owner
cannot direct more than a pro rata share be removed from the Fixed Account.

B. Partial Withdrawals with Death Benefit Options 1 and 2
Partial withdrawals will affect the Contract differently depending on
which Death Benefit Option the Contract Owner has elected. If the Contract
has Death Benefit Option 1 (level), a partial withdrawal will result in a
dollar for dollar reduction of the Face Amount. Applicable withdrawal
charges will be deducted based solely on the percentage decrease in Face
Amount. If the remaining Surrender Value in the Contract

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10

<PAGE>

would be less than $500, Liberty Life may treat the request as a request
to surrender the Contract.

For a Contract that has Death Benefit Option 2 (increasing), a partial
withdrawal will not decrease the Face Amount but will result in a dollar
for dollar reduction in Death Benefit. There will be no withdrawal
charges. If the remaining Surrender Value in the Contract would be less
than $500, Liberty Life may treat the request as a request to surrender
the Contract.

Example of Partial Withdrawal with Death Benefit Option 1:

1. Face Amount Before Withdrawal: $100,000
2. Account Value Before Withdrawal: $10,000
3. Withdrawal Charge Before Withdrawal: $3,000
4. Surrender Value Before Withdrawal: $7,000
5. Withdrawal Amount: $1,000
6. Face Amount After Withdrawal: (1-5) $99,000
7. Account Value After Withdrawal: (2-5) $9,000
8. Withdrawal Charge on Withdrawal: (3*(1-6)/1) $30
9. Withdrawal Charge After Withdrawal: (3-8) $2,970
10. Surrender Value After Withdrawal: (7-9) $6,030
11. Withdrawal Check Mailed to Contract Owner: (5-8) $970

Example of Partial Withdrawal with Death Benefit Option 2:

1. Face Amount Before Withdrawal: $100,000
2. Account Value Before Withdrawal: $10,000
3. Withdrawal Charge Before Withdrawal: $3,000
4. Surrender Value Before Withdrawal: $7,000
5. Withdrawal Amount: $1,000
6. Face Amount After Withdrawal: (1) $100,000
7. Account Value After Withdrawal: (2-5) $9,000
8. Withdrawal Charge on Withdrawal: (3*(1-6)/1) $0
9. Withdrawal Charge After Withdrawal: (3-8) $3,000
10. Surrender Value After Withdrawal: (4-5) $6,000
11. Withdrawal Check Mailed to Contract Owner: (5) $1,000

C. Tax Withholding
When a partial withdrawal or full surrender is requested, Liberty Life
will not withhold taxes, unless instructed to do so. If no tax withholding
instructions are included with the request, Liberty Life will process the
request for the total amount requested and will not withhold taxes, unless
otherwise required by law.

- -------------------------------------------------------------------------------
11

<PAGE>

11. SURRENDERS

Surrender requests will be processed effective on the date the request is
received in the Liberty Life Service Center or the next following
Valuation Date. Surrender requests should be made in writing and signed by
the Contract Owner. Liberty Life will terminate the Contract and mail the
proceeds (Account Value minus Withdrawal Charges minus any outstanding
indebtedness) directly to the Contract Owner at the address of record no
later than 7 Calendar days from receipt of the request. Liberty Life will
only make the proceeds payable to the Contract Owner, because Liberty Life
will not direct funds to any other person/entity.

The Withdrawal Charge equals the amount shown in the withdrawal charge
table located in the Contract plus any additional Withdrawal Charge due to
increases in the Face Amount of the Contract. The amount of the Withdrawal
Charge decreases over time, as shown in the Contract. The Withdrawal
Charge is determined separately for the base Contract and each increase in
Face Amount.

12. TRANSFERS

A. Minimum Transfer Amounts and Timing
Transfer amounts will be based on the Accumulation Unit Value next
determined following receipt of valid, complete transfer instructions by
Liberty Life. Transfer requests are accepted in writing. The requests must
be signed by the Contract Owner and must be legible. The request should
include the appropriate Contract number. Requests can also be made by
telephone as authorized by Liberty Life. Transfer requests received at the
Service Center after the close of the New York Stock Exchange ("NYSE")
(normally 4:00 p.m. Eastern Time), will be priced on the next business day
after received. Transfer requests received at the Service Center in
writing before the close of the New York Stock Exchange (normally 4:00
p.m. Eastern Time), on any day that the New York Stock Exchange and
Liberty Life are open will be priced as of the day received, unless
Liberty Life is closed in the case of an emergency. If Liberty Life is
closed, Transfer Requests will be priced as of the day Liberty Life and
the NYSE are next open. The minimum partial transfer amount is $250 from a
single Sub-Account or Fixed Account, unless the amount requested is your
entire balance in the Sub-Account or Fixed Account.

B. Telephone Transfers
Transfers will be accepted by telephone, unless the Contract Owner elected
not to allow such transfers at the time of application. Telephone
Privileges will be automatically granted unless the Contract Owner elects
"No Telephone Privileges" on the application at issue. Telephone
Privileges may be cancelled after policy issuance by submitting the
request in writing to the Liberty Life Service Center. The cut off time
for telephone transfer requests to be effective on the same day received
is normally 4:00 p.m. Eastern Time each day that the New York Stock
Exchange (NYSE) and Liberty Life are open. Transfer requests received over
the telephone before and up until 4:00 p.m. Eastern Time will be processed
on that day at that day's price. Transfers received after the close of
the New York Stock Exchange (normally 4:00 p.m. Eastern Time), will be
processed on the next business day and priced as of the next business day.
Transfer requests

- -------------------------------------------------------------------------------
12

<PAGE>

received after the official closing of the New York Stock Exchange will be
priced the next business day that the New York Stock Exchange and Liberty
Life are open. If Liberty Life is closed due to an emergency, transfer
requests will be honored as of the business day that Liberty Life received
the request or, if the New York Stock Exchange is not open, on the next
business day that the New York Stock Exchange is open.

If a Contract Owner calls in to make a transfer prior to the New York
Stock Exchange close, and then calls back to cancel the transfer, we will
cancel it only if the request to cancel is received prior to the close of
the NYSE. Any requests to cancel a transfer after the close of the NYSE
will not be honored.

C. Confirmations of Transfer Requests
Written acknowledgment of transfers between Sub-Accounts will be provided
at three points in time: (1) a confirmation notice will be sent to the
Contract Owner within five days of receipt of the request, (2) the
quarterly statement will reflect transfers, and (3) the annual statement
will reflect transfers.

The transfer provisions may be suspended, modified or terminated at any
time by Liberty Life.

D. Asset Rebalancing
A Contract Owner may elect to have transfers made automatically among the
Sub-Accounts of the Separate Account on an annual, semi-annual, quarterly
or monthly basis, so that Account Value is reallocated to match the
percentage allocations in the Contract Owner's premium allocation
elections. Asset Rebalancing will occur on the 25th day of the month in
which the rebalancing is scheduled to occur. Generally, the Contract Owner
may choose a day other than the 25th. Asset Rebalancing is not available
until the end of the Free Look Period. If the Contract Owner chooses a
date prior to the end of the Free Look Period, we will schedule Asset
Rebalancing to be on the 25th of the month in which the Free Look Period
ends. Liberty Life will require the Administrative Form five business
days prior to the 25th day of the month, or five business days prior to
the selected date of the Asset Rebalancing. Asset Rebalancing using the
Fixed Account is not permissible. Transfers under this program will not be
subject to the $250 minimum transfer amounts. An election to participate
in the Asset Rebalancing program must be in writing on the form
prescribed by and returned to Liberty Life at its Service Center.

E. Asset Allocation Models
Standard & Poor's Inc. ("S&P") has developed several asset allocation
models for use with the Contract. The purpose of these models is to
provide generalized guidance on how to allocate Account Value among the
Sub-Accounts in a manner that is consistent with various investment
objectives and risk tolerances. Contract Owners may use a questionnaire
and scoring system developed by S&P in order to help them to determine
which model might be appropriate for them. Although Liberty Life has
arranged for the preparation of these asset allocation models and related
materials, it is up to the Contract Owner to decide whether to use a model
and, if so, which model to use. Moreover, the models are not individualized

- -------------------------------------------------------------------------------
13

<PAGE>

investment advice. Accordingly, Liberty Life recommends that Contract
Owners consult their financial adviser before adopting a model.

If Contract Owners decide to use a model, Liberty Life will automatically
allocate their Payments in accordance with the percentages specified in
one of the S&P models. Only one model may be used at a time. Liberty Life
will automatically enroll Contract Owners in our Asset Rebalancing Program
and rebalance the total Sub-Account Values in accordance with the chosen
model on a quarterly basis. If a model is chosen at the time of
application, the first time the Sub-Account Values will be rebalanced is
the 25th day of the month following the Free Look Period. If a model is
chosen after the Contract has been issued, the first time the Sub-Account
Values will be rebalanced is the 25th day of the last month in the
calendar quarter in which use of the model was requested. The Contract
Owner may choose a day other than the 25th. If the Contract Owners wish,
they may instruct us, in writing, to rebalance their Sub-Account Values
monthly, semi-annually, or annually instead of quarterly and they may
request the date they wish the rebalancing to occur. Written instructions
must be mailed to the Service Center. Liberty Life will require the
instructions to be received five business days prior to the selected date
of the Automatic Account Rebalance.

Contract Owners may choose to use an S&P asset allocation model at any
time. Contract Owners may also discontinue use of the models at any time.
Liberty Life will automatically discontinue use of a model if the Contract
Owner (a) discontinues the Asset Rebalancing Program or (b) gives us
instructions to change the allocations of Payments or Account Value among
the Sub-Accounts. Contract Owners may discontinue use of the Asset
Rebalancing program by sending written instructions to the Liberty Life
Service Center. Contract Owners may give us instructions to change
allocations of Payments or Account Value among the Sub-Accounts by sending
written instructions to the Liberty Life Service center or by calling the
Service center, if the Contract Owner did not refuse Telephone Privileges
on the application. Liberty Life will require instructions to discontinue
use of the asset allocation model five business days prior to the date
Asset Rebalancing is scheduled to occur.

For each model, S&P determines the percentage allocations among the
Sub-Accounts based upon a comparison of the model's investment objectives
and the relevant underlying Portfolios' investment objectives and
portfolio composition. These models are specific to this Contract.

Periodically, S&P will review the models. As a result of those reviews,
S&P may decide that to better seek to meet a model's goal, it would be
appropriate to change the percentage allocations among the Sub-Accounts.
Contract Owners using that model will be notified before we implement the
change and will be given a window of opportunity to instruct Liberty Life
not to reallocate according to the new percentages. If a Contract Owner
is not enrolled in a model at the time S&P decides to make a percentage
change to the allocations, they will not be notified of the changes.

F. Dollar Cost Averaging
A Contract Owner may designate a portion of the Account Value attributable
to the Fixed Account, or any Sub-Account, to be automatically transferred,
on a monthly basis, to one or more of the Sub-Accounts, or the Fixed
Account. If using the Fixed

- -------------------------------------------------------------------------------
14

<PAGE>

Account as the source fund for Dollar Cost Averaging, the Dollar Cost
Averaging program must be requested before the Free Look Period expires.
The Dollar Cost Averaging process does not take place until the end of the
Free Look Period. If the Contract Owner chooses a date prior to the end
of the Free Look Period, we will begin Dollar Cost Averaging on the 1st
(or any other day elected) of the month immediately following the end of
the Free Look Period. If no election is made as to a source fund, Liberty
Life will not process the request and will contact the Contract Owner to
obtain the necessary information. After the end of the Free Look Period,
a Contract Owner may designate a portion of the Account Value attributable
to a specified Sub-Account or Fixed Account to be automatically
transferred, on a monthly basis, to one or more of the Sub-Accounts or the
Fixed Account. A Contract Owner may enroll in this program at the time the
Contract is issued or any time thereafter, by properly completing the
Administrative Form and returning it to Liberty Life at its Service Center
at least five business days prior to the 1st day of a month, which, unless
otherwise elected, is the date that all Dollar Cost Averaging transfers
will be made. If a Contract Owner wishes to choose a day other than the
1st of the month, Liberty Life will require the form five business days
prior to that date.

There are two Dollar Cost Averaging Options:

1) The Contract Owner may choose to Dollar Cost Average a fixed amount or
fixed percentage until a specified date, or until the funds are exhausted.
2) The Contract Owner may choose to transfer all funds over a specified
period of time.

Dollar Cost Averaging will terminate when: (1) the number of designated
monthly transfers has been completed, (2) the Account Value attributable
to the DCA Account is insufficient to complete the next transfer, (3) the
Owner requests termination in writing and such writing is received by the
Service Center at least five business days prior to the next Transfer Date
in order to cancel the transfer scheduled to take effect on such date, or
(4) the Contract is terminated.

A Contract Owner may initiate or reinstate Dollar Cost Averaging or change
existing Dollar Cost Averaging terms by properly completing the new
enrollment form and returning it to the Service Center at least 5 business
days prior to the next Transfer Date on which such transfer is to be made.

If the Contract Owner wishes to discontinue Dollar Cost Averaging from the
Fixed Account, the Contract Owner will have 60 days to transfer the
remaining balance from the Fixed Account to the Sub-Accounts. After the
60th day, if money remains in the Fixed Account, it cannot be moved until
the first 60 days following the next anniversary of the Contract. If
Liberty Life receives a request to transfer money out of the Fixed Account
that is post-marked within 60 days following the Contract Anniversary, the
request will be accepted and Liberty Life will process the transfer out of
the Fixed Account.

- -------------------------------------------------------------------------------
15

<PAGE>

DEATH

13. DEATH BENEFIT

A. Definition of Due Proof of Death
Due Proof of Death is defined as the date on which Liberty Life is
satisfied that the Insured is deceased. Typically, the receipt of the
original Death Certificate or a notarized copy of the Death Certificate
and the Death Claim form satisfies Liberty Life's criteria. Payment of
Death Proceeds is subject to the Contract provisions regarding suicide,
incontestability and misrepresentation and misstatement of age or sex. In
addition, payment of Death Proceeds is subject to proof of date of death,
satisfactory to Liberty Life and receipt of all other requirements deemed
necessary by Liberty Life, including state law requirements. However, in
addition to the reasons for delaying payment stated in the Contract,
Liberty Life may delay payment if Due Proof of Death is not met. Some
instances where Due Proof of Death may not be met include: (1) additional
investigation is needed to determine the cause of death, (2) Liberty life
has reason to suspect fraud on the part of the Applicant, Insured or
claimant, (3) death occurs within the Contract's contestable period, (4)
the designated beneficiary cannot be located, is not competent to receive
the Death Proceeds, or may be precluded from receiving the Death Proceeds,
(5) different parties have presented conflicting claims to the same Death
Proceeds, (6) additional information is required to identify the
beneficiary, or (7) a governmental entity or agency or court has placed a
lien or other form of attachment on the Death Proceeds. Providing a death
certificate is not necessarily Due Proof of Death. Liberty Life may
decide that the circumstances of certain claims raise questions of whether
the insured has died and require additional investigation to establish Due
Proof of Death.

Liberty Life will pay Death Proceeds out of its General Account and will
transfer the Account Value from the Sub-Accounts to the General Account.
The excess, if any, of the Death Benefit over the amount transferred will
be paid out of the General Account.

B. Death Benefit Calculation
When Liberty Life receives Due Proof of Death, the Death Benefit will be
calculated as of the actual date of death. Units in the Separate Account
will be sold on the date Due Proof of Death is received by the Service
Center. Interest on the death proceeds will be credited at the rate
established by Liberty Life or in accordance with state laws, if greater.
Liberty Life will typically pay death proceeds within seven days after
Liberty Life receives Due Proof of Death.

- -------------------------------------------------------------------------------
16

<PAGE>

EXHIBIT 1

AMENDMENTS REQUIRED FOR THE FLEXIBLE PAYMENT VARIABLE LIFE CONTRACT

Amendments:
- -----------
(Amendment required if the question is initially left blank or corrected, but
not initialed by the client.)

1. Insured Name
8. Beneficiary Name & Relationship
24. Plan of Insurance
25. Amount of Insurance
26. Initial Modal Premium
28. Death Benefit Option
32. Additional Benefits or Riders
33. Replacement Question
35. Owner Name
All medical questions (underwriting information)
Contract Date

Note: If a contract amendment becomes necessary, we will use the amendment to
correct any other area of the application as needed.

Special Handling:
- -----------------

4. Birth Date/Age: The Guideline Premiums will be incorrect if the insured's
birth date is wrong on the original application leading to a change in age.

8. Beneficiary relationship- amendment required if name and relationship
blank or changed.

** Class determination: We will amend the Class Determination if the class
at issue is less favorable than the premium class originally applied for.

9. Tobacco Use question: If the question is blank or changed to NO, we will
amend if the question is answered NO. An amendment will not be required if
the question is answered YES. With exam requirements, we will use an
acknowledgement if the tobacco use question is blank and the exam is negative
for tobacco use. We will amend if answered NO or blank on the application
and exam results indicate tobacco use.

- -------------------------------------------------------------------------------
17

<PAGE>

EXHIBIT 7: ACTUARIAL OPINION AND CONSENT
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

August 24, 1999

Liberty Life Assurance Company of Boston
175 Berkley Street
Boston, MA 02217

Gentlemen:

This opinion is furnished in connection with the filing by Liberty Life
Assurance Company of Boston ("Liberty Life"), on behalf of LLAC Variable
Account (the "Separate Account"), of Pre-Effective Amendment No. 1
("Amendment No. 1") to the Registration Statement on Form S-6 (File No.
333-76931) covering an indefinite amount of interests under Liberty Life's
Flexible Premium Variable Universal Life Insurance Contract (the "Contract").
Premiums received under the Contract may be allocated to the Separate
Account. The prospectus included in Amendment No. 1 to the Registration
Statement describes the Contracts. I am familiar with the Contract provisions
and with Amendment No. 1.

It is my opinion that the hypothetical illustrations of death benefits,
account values, and surrender values included in Amendment No. 1, based on
the stipulated rates of investment return and other assumptions stated in the
hypothetical illustrations, are consistent with the provisions of the
Contract. The rate structure of the Contracts has not been designed so as to
make the relative relationship between premiums and benefits, as shown in the
illustrations, appear more favorable to a prospective preferred non-tobacco
using purchaser of a Contract aged 30 or 45 than to prospective purchasers of
Contracts of other ages or underwriting classes. The preferred non-tobacco
rate class generally has a more favorable rate structure than other rate
classes.

The current and guaranteed cost of insurance rates used in the illustrations
have not been designed so as to make the relationship between current and
guaranteed rates more favorable for the ages and sexes illustrated than for
preferred non-tobacco using prospective purchasers at other ages. The
preferred non-tobacco using rate classes generally have lower cost of
insurance rates than the other rate classes. The female rate classes generally
have lower cost of insurance rates than the male rate classes.

I hereby consent to the use of this opinion as an exhibit to Amendment No. 1
and to my name under the heading "Experts" in the Prospectus included as
part of Amendment No. 1.

Sincerely,

/s/ Richard B. Lassow
Richard B. Lassow, FSA, MAAA
Vice President and Actuary

<PAGE>

EXHIBIT 8

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated February 8, 1999, with respect to the financial
statements of Liberty Life Assurance Company of Boston in Pre-Effective
Amendment No. 1 to the Registration Statement (Form S-6 File No. 333-76931)
and in the Prospectus of LLAC Variable Account.

ERNST & YOUNG LLP

Boston, Massachusetts
August 25, 1999

<PAGE>
EXHIBIT 9.

ILLUSTRATIONS OF ACCOUNT VALUES,
SURRENDER VALUES AND
DEATH BENEFITS

The following tables have been prepared to help show how values under
Contracts change with investment experience. The tables illustrate how Account
Values, Surrender Values, and Death Benefits under a Contract issued on an
Insured of a given age would vary over time if the hypothetical gross investment
rates of return on the Portfolios' assets were a uniform, gross, after tax,
annual rate of 0%, 6%, and 12%. If the hypothetical gross investment rate of
return averages 0%, 6%, or 12%, but fluctuates over or under those averages
throughout the years, the Account Values, Surrender Values and Death Benefits
may be different.

The illustrations assume annual payment of Planned Premiums in the amount
shown in the table, which equals twelve times the Lifetime Guaranteed
Coverage Monthly Premium for the hypothetical Insured. Payment of this level
of Premium annually would guarantee Death Benefit coverage for the Insured's
lifetime, regardless of investment performance, assuming no loans or
withdrawals are taken.

The amounts shown for the Account Value, Surrender Value and Death Benefit
as of each Contract Anniversary reflect the fact that the net investment return
on the assets held in the Sub-Accounts is lower than the gross after-tax return
on the Portfolios, as a result of expenses paid by the Portfolios and charges
levied against the Sub-Accounts. The values shown reflect a daily charge to the
Sub-Accounts of 0.60% of average daily net assets to compensate Liberty Life for
its expenses incurred and for assuming mortality and expense risks under the
Contracts. The illustrations also reflect the deduction of the premium expense
charge from each Premium payment. The current premium expense charge is 5.5% of
total Premiums paid in each Contract Year up to twelve times the Lifetime
Guaranteed Coverage Monthly Premium and 3.5% of any Premium in excess of that
amount. We guarantee that the Premium Expense Charge will not exceed 5.5% of
each Premium.

In addition, the net investment returns also reflect the deduction of the
Portfolio investment advisory fees and other Portfolio expenses at an annual
effective rate of 0.79%, which is the arithmetic average of the actual and
estimated fees and expenses for all of the Portfolios, including any expense
reimbursements or fee waivers. Without expense reimbursements and fee waivers,
the annual effective rate would have been 1.04%. Liberty Life anticipates that
the expense reimbursement and fee waiver arrangements will continue past the
current year. If there should be an increase or decrease in the expense
reimbursements and fee waivers of a Portfolio that has such arrangements, that
change will be reflected in the net asset value of the corresponding Portfolio.

The tables also reflect applicable charges including monthly cost of
insurance charges and a Contract Fee of $9.00 per month for Contracts with
Face Amounts of less than $100,000 and $6.00 per month for Contracts with
higher Face Amounts. For each hypothetical gross investment rate of return,
tables are provided reflecting current and guaranteed cost of insurance
charges and premium expense charges. After deduction of these amounts (other
than the cost of insurance charges, contract fees, and premium expense
charges), hypothetical gross average investment rates of return of 0%, 6% and
12% correspond to approximate net annual investment rates of return of
- -1.39%, 4.61%, and 10.61%, respectively, on both a current and guaranteed
basis. Cost of insurance rates vary by issue age (or attained age in the
case of increases in Face Amount), sex, rating class and Contract Year and,
therefore, cost of insurance charges are not reflected in the approximate net
annual investment rate of return stated above.

The tables reflect the fact that no charges for Federal, state or other
income taxes are currently made against the Variable Account. If such a
charge is made in the future, a higher gross rate of return than illustrated
will be needed to produce the net after-tax returns shown in the tables.

The tables illustrate the Account Values, Surrender Values, and Death
Benefits that would result based upon the hypothetical investment rates of
return if all Premiums are paid as indicated, if all Net Premiums are
allocated to the Variable Account, and if no Contract loans are taken. The
tables also assume that you have not requested an increase

<PAGE>

or decrease in Face Amount and no partial withdrawals or transfers have been
made.

The Contract offers two Death Benefit Options. Under Option 1, the Death
Benefit will be the greater of the Face Amount or a percentage of the Account
Value. Under Option 2, the Death Benefit will be the greater of the Face Amount
plus the Account Value or a percentage of the Account Value. We subtract any
outstanding Contract debt and due and unpaid charges before we pay a Death
Benefit. The Death Benefit in the illustration is determined under Option 1.

Values are shown for Contracts which are issued to preferred non-smoking
class Insureds. Values for Contracts issued on a basis involving a higher
mortality risk would result in lower Account Values, Surrender Values and Death
Benefits than those illustrated. Females generally have a more favorable
guaranteed cost of insurance rate structure than males.

In most states, the Contract includes three coverage guarantees: Minimum
Guaranteed Coverage, Limited Guaranteed Coverage, and Lifetime Guaranteed
Coverage. While any coverage guarantee is in effect, and you have no
outstanding Contract debt, your Contract will not lapse if the Cash Value is
insufficient to pay the Monthly Deduction. Provided sufficient premium is paid,
in most states Lifetime Guaranteed Coverage will be in effect until the Insured
dies, Limited Guaranteed Coverage will be in effect until the later of the
Insured's age 75 or 15 years after the Contract Date, and Minimum Guaranteed
Coverage will be in effect for the first three Contract Years. In
Massachusetts, Lifetime Guaranteed Coverage is not available and Limited
Guaranteed Coverage ends after five Contract Years. If you do not pay
sufficient premium, one or more coverage guarantees will terminate. If Limited
or Lifetime Guaranteed Coverage terminates for this reason, you will be given a
fixed time of at least one year to pay sufficient additional premium to restore
the guarantee. Even if all of the coverage guarantees terminate, however, your
Contract will not lapse provided that the Surrender Value is sufficient to pay
the Monthly Deductions as they come due. Your Contract will state a monthly
premium amount for each coverage guarantee. For a guarantee to remain in effect
your total premiums (less any partial withdrawal) must at least equal the
relevant monthly premium amount, times the number of months since the Contract
Date, minus the relevant monthly premium amounts for the most recent three
months. However, if Lifetime Guaranteed Coverage is in effect when the
Insured reaches age 100, we will not require payment of additional Premium,
and the Death Benefit will equal the greater of the Face Amount or 101% of
the Account Value.

If the Surrender Value in an illustration is zero, any Death Benefit shown
is the Guaranteed Death Benefit. If a Contract Loan is outstanding in this
situation, the Contract may lapse in accordance with the Grace Period
provisions. The Contract also might lapse in this situation if you
previously had partial withdrawals and your total Premium payments, minus the
amounts withdrawn, were insufficient to keep the Guaranteed Death Benefit in
effect.

The benefit agreements described in the prospectus are available to add
optional insurance benefits to your Contract. The charges for benefit
agreements are deducted from your Account Value as part of the Monthly
Deduction. The attached illustrations do not include any optional insurance
benefits.

Upon request, Liberty Life will furnish a comparable illustration based on
the proposed Insured's age, sex, underwriting classification, proposed Planned
Premium, and any available Agreements requested.

<PAGE>

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT

Male Pref NS: $ 1,008.28 Annual Planned Premium: Issue Age 30
$ 100,000 Face Amount
Death Benefit Option 1
Values-Current Cost Of Insurance

0% Hypothetical 6% Hypothetical 12% Hypothetical

Gross Investment Return Gross Investment Return Gross Investment Return
----------------------- ----------------------- -----------------------

Contract Account Surrender Death Account Surrender Death Account Surrender Death
Year Value Value Benefit Value Value Benefit Value Value Benefit
---- ----- ----- ------- ----- ----- ------- ----- ----- -------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 748 0 100,000 799 0 100,000 850 50 100,000
2 1,485 685 100,000 1,633 833 100,000 1,788 988 100,000
3 2,212 1,412 100,000 2,507 1,707 100,000 2,826 2,026 100,000
4 2,931 2,211 100,000 3,422 2,702 100,000 3,976 3,256 100,000
5 3,632 2,992 100,000 4,371 3,731 100,000 5,239 4,599 100,000

6 4,325 3,765 100,000 5,366 4,806 100,000 6,637 6,077 100,000
7 4,998 4,518 100,000 6,396 5,916 100,000 8,174 7,694 100,000
8 5,652 5,252 100,000 7,465 7,065 100,000 9,864 9,464 100,000
9 6,297 5,977 100,000 8,582 8,262 100,000 11,734 11,414 100,000
10 6,922 6,762 100,000 9,742 9,582 100,000 13,793 13,633 100,000

11 7,530 7,530 100,000 10,946 10,946 100,000 16,063 16,063 100,000
12 8,110 8,110 100,000 12,188 12,188 100,000 18,558 18,558 100,000
13 8,675 8,675 100,000 13,480 13,480 100,000 21,313 21,313 100,000
14 9,223 9,223 100,000 14,825 14,825 100,000 24,355 24,355 100,000
15 9,746 9,746 100,000 16,217 16,217 100,000 27,710 27,710 100,000

16 10,244 10,244 100,000 17,658 17,658 100,000 31,412 31,412 100,000
17 10,717 10,717 100,000 19,150 19,150 100,000 35,498 35,498 100,000
18 11,174 11,174 100,000 20,706 20,706 100,000 40,022 40,022 100,000
19 11,607 11,607 100,000 22,320 22,320 100,000 45,023 45,023 100,000
20 12,006 12,006 100,000 23,987 23,987 100,000 50,551 50,551 100,000

25 13,620 13,620 100,000 33,359 33,359 100,000 88,142 88,142 138,383

30 14,256 14,256 100,000 44,611 44,611 100,000 149,516 149,516 200,352

35 13,200 13,200 100,000 58,074 58,074 100,000 249,458 249,458 304,339

40 9,234 9,234 100,000 74,553 74,553 100,000 411,431 411,431 477,260

45 2,677 2,677 100,000 96,045 96,045 102,768 674,826 674,826 722,064

50 0 0 100,000 123,747 123,747 129,935 1,106,595 1,106,595 1,161,925

55 0 0 100,000 156,919 156,919 164,765 1,798,363 1,798,363 1,888,281

60 0 0 100,000 195,608 195,608 205,389 2,888,546 2,888,546 3,032,973

65 0 0 100,000 243,885 243,885 246,323 4,660,166 4,660,166 4,706,768

70 0 0 100,000 304,418 304,418 307,462 7,554,578 7,554,578 7,630,124
</TABLE>

Assumptions:

<PAGE>

(1) Assumes the planned premium shown is paid at the beginning of each contract
year.

(2) Assumes no contract loans have been made.

(3) Values reflect current cost of insurance charges and premium expense
charges.

(4) Net investment returns are calculated as the hypothetical gross investment
return less all charges and deductions.

(5) The death benefit reflects current Internal Revenue Code requirements based
on the guideline premium/cash value corridor test.

(6) Where the surrender value is zero, the death benefit is the guaranteed death
benefit. If past premiums are insufficient to keep the guaranteed death benefit
in effect or indebtedness is outstanding, a zero surrender value would indicate
contract lapse in the absence of additional premium payment. If you take a
partial withdrawal, the amount of the withdrawal is added to the minimum total
premium payments necessary to keep the guaranteed death benefit in effect.

The Hypothetical Investment Rates of Return Shown above Are Illustrative Only
and Should Not be Deemed a Representation of Past or Future Investment Rates of
Return. Actual Rates of Return May Be More or less than Those Shown and Will
Depend on a Number of Factors, Including the Investment Allocations Made by an
Owner and Actual Expenses. The Death Benefit, Account Value and Surrender Value
for a Contract Would Be Different from Those Shown If the Actual Rates of Return
Averaged 0%, 6% and 12% over a Period of Years but Also Fluctuated above or
below Those Averages for Individual Contract Years. No Representations Can Be
Made by Liberty Life Assurance Company of Boston That These Hypothetical Rates
of Return Can Be Achieved for Any One Year or Sustained over Any Period of Time.

<PAGE>

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT

Male Pref NS: $ 1,008.28 Annual Planned Premium: Issue Age 30
$ 100,000 Face Amount
Death Benefit Option 1
Values-Guaranteed Cost Of Insurance

0% Hypothetical 6% Hypothetical 12% Hypothetical

Gross Investment Return Gross Investment Return Gross Investment Return
----------------------- ----------------------- -----------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 748 0 100,000 799 0 100,000 850 50 100,000
2 1,462 662 100,000 1,609 809 100,000 1,763 963 100,000
3 2,163 1,363 100,000 2,455 1,655 100,000 2,771 1,971 100,000
4 2,850 2,130 100,000 3,334 2,614 100,000 3,880 3,160 100,000
5 3,521 2,881 100,000 4,248 3,608 100,000 5,101 4,461 100,000

6 4,177 3,617 100,000 5,198 4,638 100,000 6,445 5,885 100,000
7 4,817 4,337 100,000 6,184 5,704 100,000 7,924 7,444 100,000
8 5,437 5,037 100,000 7,206 6,806 100,000 9,551 9,151 100,000
9 6,039 5,719 100,000 8,265 7,945 100,000 11,341 11,021 100,000
10 6,620 6,460 100,000 9,361 9,201 100,000 13,311 13,151 100,000

11 7,179 7,179 100,000 10,495 10,495 100,000 15,478 15,478 100,000
12 7,715 7,715 100,000 11,667 11,667 100,000 17,863 17,863 100,000
13 8,227 8,227 100,000 12,879 12,879 100,000 20,490 20,490 100,000
14 8,716 8,716 100,000 14,131 14,131 100,000 23,385 23,385 100,000
15 9,178 9,178 100,000 15,425 1,542 100,000 26,576 2,657 100,000

16 9,612 9,612 100,000 16,760 16,760 100,000 30,096 30,096 100,000
17 10,016 10,016 100,000 18,138 18,138 100,000 33,980 33,980 100,000
18 10,390 10,390 100,000 19,560 19,560 100,000 38,269 38,269 100,000
19 10,732 10,732 100,000 21,025 21,025 100,000 43,009 43,009 100,000
20 11,038 11,038 100,000 22,536 22,536 100,000 48,251 48,251 100,000

25 11,884 11,884 100,000 30,737 30,737 100,000 83,834 83,834 131,620

30 11,049 11,049 100,000 39,936 39,936 100,000 141,474 141,474 189,575

35 7,362 7,362 100,000 50,053 50,053 100,000 234,564 234,564 286,168

40 0 0 100,000 61,013 61,013 100,000 383,718 383,718 445,113

45 0 0 100,000 73,223 73,223 100,000 624,065 624,065 667,749

50 0 0 100,000 88,862 88,862 100,000 1,016,596 1,016,596 1,067,426

55 0 0 100,000 112,348 112,348 117,966 1,634,071 1,634,071 1,715,775

60 0 0 100,000 139,049 139,049 146,002 2,579,999 2,579,999 2,708,999

65 0 0 100,000 172,338 172,338 174,061 4,103,348 4,103,348 4,144,381

70 0 0 100,000 213,947 213,947 216,087 6,571,352 6,571,352 6,637,066
</TABLE>

<PAGE>

Assumptions:

(1) Assumes the planned premium shown is paid at the beginning of each contract
year.

(2) Assumes no contract loans have been made.

(3) Values reflect guaranteed cost of insurance charges and premium expense
charges.

(4) Net investment returns are calculated as the hypothetical gross investment
return less all charges and deductions.

(5) The death benefit reflects current Internal Revenue Code requirements based
on the guideline premium/cash value corridor test.

<PAGE>

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT

Male Pref NS: $ 5,049.16 Annual Planned Premium: Issue Age 45

$ 250,000 Face Amount
Death Benefit Option 1
Values-Current Cost Of Insurance

0% Hypothetical 6% Hypothetical 12% Hypothetical

Gross Investment Return Gross Investment Return Gross Investment Return
----------------------- ----------------------- -----------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,033 613 250,000 4,296 876 250,000 4,559 1,139 250,000
2 7,970 4,550 250,000 8,748 5,328 250,000 9,558 6,138 250,000
3 11,838 8,418 250,000 13,391 9,971 250,000 15,073 11,653 250,000
4 15,615 12,537 250,000 18,210 15,132 250,000 21,135 18,057 250,000
5 19,279 16,543 250,000 23,192 20,456 250,000 27,781 25,045 250,000

6 22,855 20,461 250,000 28,369 25,975 250,000 35,103 32,709 250,000
7 26,349 24,297 250,000 33,759 31,707 250,000 43,180 41,128 250,000
8 29,744 28,034 250,000 39,351 37,641 250,000 52,080 50,370 250,000
9 33,062 31,694 250,000 45,181 43,813 250,000 61,916 60,548 250,000
10 36,283 35,599 250,000 51,242 50,558 250,000 72,777 72,093 250,000

11 39,390 39,390 250,000 57,529 57,529 250,000 84,766 84,766 250,000
12 42,368 42,368 250,000 64,041 64,041 250,000 98,001 98,001 250,000
13 45,217 45,217 250,000 70,794 70,794 250,000 112,635 112,635 250,000
14 47,923 47,923 250,000 77,792 77,792 250,000 128,827 128,827 250,000
15 50,472 50,472 250,000 85,039 85,039 250,000 146,761 146,761 250,000

16 52,866 52,866 250,000 92,558 92,558 250,000 166,661 166,661 250,000
17 55,099 55,099 250,000 100,366 100,366 250,000 188,779 188,779 250,000
18 57,161 57,161 250,000 108,479 108,479 250,000 213,333 213,333 268,800
19 59,017 59,017 250,000 116,902 116,902 250,000 240,403 240,403 298,100
20 60,657 60,657 250,000 125,658 125,658 250,000 270,240 270,240 329,693

25 64,962 64,962 250,000 175,567 175,567 250,000 471,491 471,491 546,930

30 59,535 59,535 250,000 240,689 240,689 257,538 799,106 799,106 855,043

35 35,817 35,817 250,000 324,532 324,532 340,758 1,336,233 1,336,233 1,403,045

40 0 0 250,000 425,585 425,585 446,864 2,198,914 2,198,914 2,308,860

45 0 0 250,000 544,590 544,590 571,819 3,563,401 3,563,401 3,741,571

50 0 0 250,000 692,845 692,845 699,774 5,782,945 5,782,945 5,840,775

55 0 0 250,000 878,362 878,362 887,145 9,411,284 9,411,284 9,505,397
</TABLE>

Assumptions:

(1) Assumes the planned premium shown is paid at the beginning of each contract
year.

(2) Assumes no contract loans have been made.

<PAGE>

(3) Values reflect current cost of insurance charges and premium expense charges

(4) Net investment returns are calculated as the hypothetical gross investment
return less all charges and deductions.

(5) The death benefit reflects current Internal Revenue Code requirements based
on the guideline premium/cash value corridor test.

<PAGE>

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT

Male Pref NS: $ 5,049.16 Annual Planned Premium: Issue Age 45
$ 250,000 Face Amount
Death Benefit Option 1
Values-Guaranteed Cost Of Insurance

0% Hypothetical 6% Hypothetical 12% Hypothetical

Gross Investment Return Gross Investment Return Gross Investment Return
----------------------- ----------------------- -----------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,014 594 250,000 4,276 856 250,000 4,539 1,119 250,000
2 7,700 4,280 250,000 8,469 5,049 250,000 9,270 5,850 250,000
3 11,279 7,859 250,000 12,798 9,378 250,000 14,445 11,025 250,000
4 14,746 11,668 250,000 17,264 14,186 250,000 20,108 17,030 250,000
5 18,097 15,361 250,000 21,872 19,136 250,000 26,310 23,574 250,000

6 21,325 18,931 250,000 26,619 24,225 250,000 33,104 30,710 250,000
7 24,420 22,368 250,000 31,505 29,453 250,000 40,548 38,496 250,000
8 27,371 25,661 250,000 36,525 34,815 250,000 48,707 46,997 250,000
9 30,164 28,796 250,000 41,674 40,306 250,000 57,654 56,286 250,000
10 32,789 32,105 250,000 46,952 46,268 250,000 67,477 66,793 250,000

11 35,235 35,235 250,000 52,357 52,357 250,000 78,273 78,273 250,000
12 37,490 37,490 250,000 57,890 57,890 250,000 90,160 90,160 250,000
13 39,549 39,549 250,000 63,558 63,558 250,000 103,278 103,278 250,000
14 41,396 41,396 250,000 69,362 69,362 250,000 117,779 117,779 250,000
15 43,011 43,011 250,000 75,298 75,298 250,000 133,841 133,841 250,000

16 44,372 44,372 250,000 81,365 81,365 250,000 151,673 151,673 250,000
17 45,453 45,453 250,000 87,563 87,563 250,000 171,522 171,522 250,000
18 46,215 46,215 250,000 93,885 93,885 250,000 193,677 193,677 250,000
19 46,617 46,617 250,000 100,325 100,325 250,000 218,331 218,331 270,731
20 46,619 46,619 250,000 106,886 106,886 250,000 245,454 245,454 299,454

25 39,071 39,071 250,000 141,999 141,999 250,000 426,892 426,892 495,195

30 10,021 10,021 250,000 183,132 183,132 250,000 719,281 719,281 769,631

35 0 0 250,000 240,617 240,617 252,648 1,196,513 1,196,513 1,256,338

40 0 0 250,000 318,506 318,506 334,432 1,947,748 1,947,748 2,045,136

45 0 0 250,000 406,438 406,438 426,760 3,099,386 3,099,386 3,254,356

50 0 0 250,000 515,667 515,667 520,823 4,953,734 4,953,734 5,003,271

55 0 0 250,000 651,725 651,725 658,243 7,957,456 7,957,456 8,037,030
</TABLE>

Assumptions:

(1) Assumes the planned premium shown is paid at the beginning of each contract
year.

(2) Assumes no contract loans have been made.

<PAGE>

(3) Values reflect guaranteed cost of insurance charges and premium expense
charges..

(4) Net investment returns are calculated as the hypothetical gross investment
return less all charges and deductions.

(5) The death benefit reflects current Internal Revenue Code requirements based
on the guideline premium/cash value corridor test.

<PAGE>

Exhibit 10
----------

Initial Surrender Charge per $1000

Surrender Charge =(number of unit) X ( Initial Surrender Charge per $1000) X
(Percent of initial surrender)

MALE FEMALE UNISEX MALE FEMALE UNISEX
AGE NS SM NS SM NS SM AGE NS SM NS SM NS SM
- --- -- -- -- -- -- -- --- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 8.00 8.00 8.00 40 11.04 17.52 8.04 11.04 10.44 16.20
1 8.00 8.00 8.00 41 11.52 18.36 8.28 11.52 10.92 16.92
2 8.00 8.00 8.00 42 12.00 19.20 8.64 11.88 11.28 17.64
3 8.00 8.00 8.00 43 12.48 20.04 9.00 12.36 11.76 18.48
4 8.00 8.00 8.00 44 13.08 21.00 9.36 12.84 12.36 19.32
5 8.00 8.00 8.00 45 13.68 21.96 9.72 13.32 12.84 20.16
6 8.00 8.00 8.00 46 14.28 22.92 10.08 13.92 13.44 21.12
7 8.00 8.00 8.00 47 15.00 24.00 10.44 14.40 14.04 21.96
8 8.00 8.00 8.00 48 15.60 25.08 10.92 15.00 14.64 23.04
9 8.00 8.00 8.00 49 16.32 26.28 11.28 15.48 15.36 24.00
10 8.00 8.00 8.00 50 17.16 27.60 11.76 16.08 16.08 25.20
11 8.00 8.00 8.00 51 18.00 28.80 12.24 16.80 16.80 26.28
12 8.00 8.00 8.00 52 18.84 30.24 12.72 17.40 17.64 27.48
13 8.00 8.00 8.00 53 19.68 31.56 13.32 18.12 18.36 28.68
14 8.00 8.00 8.00 54 20.64 33.12 13.80 18.84 19.32 30.00
15 8.00 8.00 8.00 55 21.72 34.68 14.40 19.56 20.16 31.44
16 8.00 8.00 8.00 56 22.80 36.24 15.00 20.28 21.24 32.76
17 8.00 8.00 8.00 57 23.88 38.04 15.60 21.12 22.20 34.32
18 8.00 8.00 8.00 8.00 8.00 8.00 58 25.20 39.84 16.32 21.96 23.40 35.88
19 8.00 8.00 8.00 8.00 8.00 8.00 59 26.40 41.76 17.04 22.92 24.48 37.56
20 8.00 8.16 8.00 8.00 8.00 8.00 60 27.84 43.68 17.88 23.88 25.80 39.36
21 8.00 8.40 8.00 8.00 8.00 8.00 61 30.60 47.28 19.68 26.04 28.44 42.60
22 8.00 8.64 8.00 8.00 8.00 8.04 62 33.72 50.00 21.72 28.44 31.20 46.08
23 8.00 8.88 8.00 8.00 8.00 8.28 63 37.08 50.00 24.00 31.08 34.32 49.68
24 8.00 9.24 8.00 8.00 8.00 8.64 64 40.68 50.00 26.52 33.96 37.68 50.00
25 8.00 9.60 8.00 8.00 8.00 8.88 65 44.52 50.00 29.28 36.96 41.28 50.00
26 8.00 9.96 8.00 8.00 8.00 9.24 66 48.72 50.00 32.40 40.44 45.24 50.00
27 8.00 10.32 8.00 8.00 8.00 9.60 67 50.00 50.00 35.76 44.04 49.44 50.00
28 8.00 10.68 8.00 8.00 8.00 9.96 68 50.00 50.00 39.60 48.12 50.00 50.00
29 8.00 11.04 8.00 8.00 8.00 10.32 69 50.00 50.00 43.80 50.00 50.00 50.00
30 8.00 11.52 8.00 8.00 8.00 10.68 70 50.00 50.00 48.36 50.00 50.00 50.00
31 8.00 12.00 8.00 8.00 8.00 11.16 71 50.00 50.00 50.00 50.00 50.00 50.00
32 8.04 12.48 8.00 8.16 8.00 11.64 72 50.00 50.00 50.00 50.00 50.00 50.00
33 8.28 13.08 8.00 8.40 8.00 12.12 73 50.00 50.00 50.00 50.00 50.00 50.00
34 8.64 13.56 8.00 8.76 8.16 12.60 74 50.00 50.00 50.00 50.00 50.00 50.00
35 9.00 14.16 8.00 9.12 8.52 13.08 75 50.00 50.00 50.00 50.00 50.00 50.00
36 9.36 14.76 8.00 9.48 8.88 13.68 76 50.00 50.00 50.00 50.00 50.00 50.00
37 9.72 15.36 8.00 9.84 9.24 14.28 77 50.00 50.00 50.00 50.00 50.00 50.00
38 10.20 16.08 8.00 10.20 9.60 14.88 78 50.00 50.00 50.00 50.00 50.00 50.00
39 10.56 16.80 8.00 10.56 9.96 15.60 79 50.00 50.00 50.00 50.00 50.00 50.00
80 50.00 50.00 50.00 50.00 50.00 50.00
</TABLE>

* The surrender charge will grade annually to '0' at the end of 10th contract
year by applying following percentage.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Duration: 1 2 3 4 5 6 7 8 9 10 11+
Non-NY (%): 100 100 100 90 80 70 60 50 40 20 0
NY (%): 100 90 85 80 75 70 60 50 40 20 0
- ------------------------------------------------------------------------------
</TABLE>