MANN HORACE LIFE INSURANCE CO SEPARATE ACCOUNT, 497, 1997-05-02

MANN HORACE LIFE INSURANCE CO SEPARATE ACCOUNT
497, 1997-05-02

Previous: WAINOCO OIL CORP, 10-Q, 1997-05-02

Next: SALOMON INC, 424B3, 1997-05-02

<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1997

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
FOR CONTRACTS ISSUED ON
FORMS 66-3A AND 66-4A

The variable annuity Contracts issued by Horace Mann Life Insurance Company
on Forms 66-3A and 66-4A are no longer offered or sold by Horace Mann Life
Insurance Company. These earlier Contracts remain in effect but differ from
the Contracts described in the Prospectus in the following material respects.
Please refer to the Contracts on Forms 66-3A and 66-4A for a complete
description of their provisions.

1. In lieu of the Surrender Charge, 6% of each Purchase Payment (gross
stipulated payment) plus $.50, without any yearly limitation, is deducted for
sales and administrative expenses and death benefit charges. It is estimated
that of the 6% deduction, 4% is for sales expenses and 2% for the death
benefit risk. The additional $.50 deduction is for administrative expenses.
All Purchase Payments, net of applicable deductions, including premium taxes
if applicable, are invested by the Account in shares of Horace Mann Growth
Fund. There is no annual maintenance fee or transfer charge.

2. In lieu of the Asset Charge for mortality, expense and distribution
expense risks described in the Prospectus, a charge is deducted from all
distributions paid by Horace Mann Growth Fund to the Account or, if the charge
is accrued and unpaid, from the value of a Participant's individual account
upon withdrawal or transfer from the Account. This charge is computed weekly
at the rate of .0075% of the net assets of the Account (.39% on an annual
basis). It is estimated that .31% is for mortality risk and .08% is for
expense risk.

3. The "present value factor" used in calculating the actuarial liability of
the Variable Retirement Annuity Account is computed using the Progressive
Annuity Mortality Table with interest at 4%.

4. With respect to the group Contract issued on Form 66-4A, if the Annuitant
is no longer in the class of eligible Participants or elects not to continue
to participate in the group Contract, the Annuitant may elect, within 31 days
after the date of termination, to purchase from Horace Mann Life Insurance
Company its individual annuity Contract most nearly similar in benefits and
provisions to the group Contract. The individual annuity Contract will be
issued at the then attained age of the Annuitant and at the same annual
Purchase Payment as the group Contract Certificate, unless otherwise agreed to
by Horace Mann Life Insurance Company.

FORM 66-3A AND 66-4A CONTRACTS
<TABLE>
<S> <C> <C>
Contract Owner Transaction Expenses,(/1/) as a percentage of
Purchase Payments:
Sales Expense Charge............................................... 4.00%
Death Benefit Risk Charge.......................................... 2.00%
Administration Expense Charge............................. $.50 per payment
plus $10.00
issuance fee
Separate Account Annual Asset Charge, as a percentage of
average account value:
Mortality Risk ........................................... 0.31%
Expense Risk ............................................. 0.08%
Total Separate Account Annual Asset Charge......................... 0.39%
Annual Operating Expenses of Growth Fund,(/2/) as a
percentage of average net assets for the December 31, 1996
fiscal year:
Investment Advisory Fees........................................... 0.31%
Business Management Fees........................................... 0.21%
Other Expenses..................................................... 0.07%
Fund Pricing Fee........................................ 0.01%
Custodian Fees.......................................... 0.02%
Miscellaneous (audit, legal, etc.)...................... 0.04%
Total Growth Fund Operating Expenses............................... 0.59%
Minus Expense Reimbursements and Fee Waivers ...................... 0.02%
Net Fund Operating Expenses ....................................... 0.57%
</TABLE>
<PAGE>

EXAMPLE(/3/)

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
If you surrender your Contract at the end of
the applicable time period:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $80 $99 $120 $180
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $80 $99 $120 $180
</TABLE>

(/1/)Premium taxes, currently ranging between 0 and 3.5%, are not included.
The rate varies depending upon state of residence, and not all states impose
premium taxes. Also, depending on the state, taxes are taken from Purchase
Payments or are levied at annuitization.

(/2/)The Operating Expenses of the Growth Fund are borne indirectly by
Contract Owners.

(/3/)The EXAMPLE should not be considered a representation of past or future
expenses. Amounts shown are based on the average cash value of the average
number of annuity Contracts in the accumulation phase during the 1996 calendar
year. Actual expenses may be greater or less than those shown.

THE PURPOSE OF THE TABLE IS TO ASSIST CONTRACT OWNERS IN UNDERSTANDING THE
VARIOUS
COSTS AND EXPENSES THAT THEY BEAR DIRECTLY OR INDIRECTLY. THE TABLE REFLECTS
EXPENSES OF THE SEPARATE ACCOUNT AS WELL AS THOSE OF THE GROWTH FUND.

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

The date of this Supplement is May 1, 1997.
<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1997

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
FOR CONTRACTS ISSUED ON
FORM 66-2A

The variable annuity Contract issued by Horace Mann Life Insurance Company
on Form 66-2A is no longer offered or sold by Horace Mann Life Insurance
Company. This earlier Contract remains in effect but differs from the
Contracts described in the Prospectus in the following material respects.
Please refer to the Contract on Form 66-2A for a complete description of its
provisions.

It is estimated that of the 6% deduction, 4% is for sales expenses and 2%
for the death benefit risk. The additional $.50 deduction is for
administrative expenses.

All Purchase Payments, net of applicable deductions including premium taxes
if applicable, are invested by the Account in shares of Horace Mann Growth
Fund. There is no annual maintenance fee or transfer charge.

2. In lieu of the Asset Charge for mortality, expense and distribution
expense risks described in the Prospectus, a charge is deducted from
distributions paid by Horace Mann Growth Fund to the Account or, if the charge
is accrued and unpaid, from the value of a Contract Owner's individual account
upon withdrawal or transfer from the Account. This charge is computed weekly
at the rate of .0075% of the net assets of the Account (.39% on an annual
basis). It is estimated that .31% is for mortality risk and .08% is for
expense risk.

FORM 66-2A CONTRACTS
<TABLE>
<S> <C> <C>
Contract Owner Transaction Expenses,(/1/) as a percentage of
Purchase Payments:
Sales Expense Charge............................................... 4.00%
Death Benefit Risk Charge.......................................... 2.00%
Administration Expense Charge............................. $.50 per payment
plus $10.00
issuance fee
Separate Account Annual Asset Charge, as a percentage of
average account value:
Mortality Risk............................................ 0.31%
Expense Risk ............................................. 0.08%
Total Separate Account Annual Asset Charge......................... 0.39%
Annual Operating Expenses of Growth Fund,(/2/) as a
percentage of average net assets for the December 31, 1996
fiscal year:
Investment Advisory Fees........................................... 0.31%
Business Management Fees........................................... 0.21%
Other Expenses..................................................... 0.07%
Fund Pricing Fee........................................ 0.01%
Custodian Fees.......................................... 0.02%
Miscellaneous (audit, legal, etc.)...................... 0.04%
Total Growth Fund Operating Expenses............................... 0.59%
Minus Expense Reimbursements and Fee Waivers ...................... 0.02%
Net Fund Operating Expenses........................................ 0.57%
</TABLE>
<PAGE>

EXAMPLE(/3/)

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
If you surrender your Contract at the end of
the applicable time period:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:................................... $80 $99 $120 $180
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:................................... $80 $99 $120 $180
</TABLE>

(/2/)The Operating Expenses of the Growth Fund are borne indirectly by
Contract Owners.

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

The date of this Supplement is May 1, 1997.
<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1997

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
FOR CONTRACTS ISSUED ON
FORM 527-GC

The group variable annuity Contract issued by Horace Mann Life Insurance
Company on Form 527-GC is no longer offered or sold by Horace Mann Life
Insurance Company. This earlier Contract remains in effect but differs from
the Contracts described in the Prospectus in the following material respects.
Please refer to the Contract on Form 527-GC for a complete description of its
provisions.

1. The Contract may be terminated or discontinued by the Group Contract
Owner upon written notice to Horace Mann Life Insurance Company. The written
notice must specify the date for termination which may not be earlier than 30
days following the date such notice is received by Horace Mann Life Insurance
Company. The Contract may be discontinued by Horace Mann Life Insurance
Company upon 90 days' written notice to the Group Contract Owner.

2. If the Contract is terminated or the Annuitant ceases to be in the class
of eligible Annuitants, the Annuitant may elect within 90 days thereafter to
purchase from Horace Mann Life Insurance Company the individual annuity
Contract most similar in benefits and provisions to those of the Annuitant's
Certificate.

3. At the end of each fiscal year, Horace Mann Life Insurance Company may,
in its discretion, determine an experience credit to be equitably applied
based on the mortality experience and administration costs of the Contract.

4. The Contract's minimum Purchase Payment is $10. Minimum annual Purchase
Payments that may be allocated to the Account are $200. In lieu of the
Surrender Charge, 5% of each Purchase Payment plus $.50 is deducted for sales
and administrative expenses and death benefit charges. The $.50 charge may not
exceed $6.00 in any Contract Year. If Purchase Payments are allocated to both
the Fixed Accumulation Account and the Separate Account, the per payment fee
is $.75, not to exceed $9.00 in any Contract Year. It is estimated that of the
5% deduction, 3.2% is for sales expenses, 0.2% is for the death benefit risk
and 1.6% is for administrative expenses. Premium taxes payable, if applicable,
are deducted from each payment. All Purchase Payments net of applicable
deductions, are invested by the Account in shares of Horace Mann Growth Fund.
There is no annual maintenance charge or transfer charge.

5. In lieu of the Asset Charge for mortality, expense and distribution
expense risk described in the Prospectus, a charge for mortality and expense
risks, computed weekly at the rate of .005575% of the net assets of the
Account (approximately .29% on an annual basis), will be deducted from
dividends and other distributions paid by Horace Mann Growth Fund to the
Account or to the extent such distributions are accrued and unpaid, from the
value of a Participant's account upon withdrawal or transfer of the
Participant's interest out of the Account. It is estimated that .24% is for
mortality risk and .05% is for expense risk.

6. The "present value factor" used in calculating the actuarial liability of
the Variable Retirement Annuity Account is computed using the Progressive
Annuity Mortality Table with interest at 3.5%. Consequently, the interest rate
used to compute the value of a Variable Retirement Annuity Unit is 3.79% (of
which .29% represents the charge for mortality and expense risks).

FORM 527-GC CONTRACTS
<TABLE>
<S> <C> <C>
Contract Owner Transaction Expenses,(/1/) as a percentage
of Purchase Payments:
Sales Expense Charge.............................................. 3.20%
Death Benefit Risk Charge......................................... 0.20%
Administration Expense Charge........................... $1.60 and $.50
per payment plus
$20.00 issuance fee
Separate Account Annual Asset Charge, as a percentage of
total net assets:
Mortality Risk.......................................... 0.24%
Expense Risk............................................ 0.05%
Total Separate Account Annual Asset Charge........................ 0.29%
Annual Operating Expenses of Growth Fund,(/2/) as a
percentage of average net assets for the December 31,
1996 fiscal year:
Investment Advisory Fees.......................................... 0.31%
Business Management Fees.......................................... 0.21%
Other Expenses.................................................... 0.07%
Fund Pricing Fee...................................... 0.01%
Custodian Fees........................................ 0.02%
Miscellaneous (audit, legal, etc.).................... 0.04%
Total Growth Fund Operating Expenses.............................. 0.59%
Minus Expense Reimbursements and Fee Waivers...................... 0.02%
Net Fund Operating Expenses....................................... 0.57%
</TABLE>
<PAGE>

EXAMPLE(/3/)

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
If you surrender your Contract at the end of
the applicable time period:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $79 $96 $115 $169
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $79 $96 $115 $169
</TABLE>

(/2/)The Operating Expenses of the Growth Fund are borne indirectly by
Contract Owners.

(/3/)The EXAMPLE, should not be considered a representation of past or future
expenses. Amounts shown are based on the average cash value of the average
number of annuity Contracts in the accumulation phase during the 1996 calendar
year. Actual expenses may be greater or less than those shown.

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

The date of this Supplement is May 1, 1997.
<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1997

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
FOR CONTRACTS ISSUED ON
FORM 529

The individual variable annuity Contract issued by Horace Mann Life
Insurance Company on Form 529 is no longer offered or sold by Horace Mann Life
Insurance Company. These earlier Contracts remain in effect but differ from
the Contracts described in the Prospectus in the following material respects.
Please refer to the Contract on Form 529 for a complete description of its
provisions.

1. The Contract's minimum Purchase Payment (gross stipulated payment) is
$10. Minimum annual Purchase Payments that may be allocated to the Account are
$200. In lieu of the Surrender Charge, 5% of each Purchase Payment plus $.50
is deducted for sales and administrative expenses and death benefit charges.
The $.50 charge may not exceed $6.00 in any Contract Year. If Purchase
Payments are allocated to both the Fixed Accumulation Account and the Separate
Account, the per payment fee is $.75, not to exceed $9.00 per Contract Year.
It is estimated that of the 5% deduction, 3.2% is for sales expenses, 0.2% is
for the death benefit risk and 1.6% is for administrative expenses. Premium
taxes payable, if applicable, are deducted from each Purchase Payment. All
Purchase Payments, net of applicable deductions, are invested by the Account
in shares of Horace Mann Growth Fund. There is no annual maintenance charge or
transfer charge.

2. In lieu of the Asset Charge for mortality, expense and distribution
expense risk described in the Prospectus, a charge for mortality and expense
risks, computed weekly at the rate of .005575% of the net assets of the
Account (approximately .29% on an annual basis), will be deducted from
dividends and other distributions paid by Horace Mann Growth Fund to the
Account, or to the extent such distributions are accrued and unpaid, from the
value of a Contract Owner's account upon withdrawal or transfer of the
Contract Owner's interest out of the Account. It is estimated that .24% of
such charge is for mortality risk and .05% is for expense risk.

3. The "present value factor" used in calculating the actuarial liability of
the Variable Retirement Annuity Account is computed using the Progressive
Annuity Mortality Table with interest at 3.5%. Consequently, the interest rate
used to compute the value of a Variable Retirement Annuity Unit is 3.79% (of
which .29% represents the charge for mortality and expense risks).

FORM 529 CONTRACTS
<TABLE>
<S> <C> <C>
Contract Owner Transaction Expenses,(/1/) as a percentage of
Purchase Payments:
Sales Expense Charge.................................................. 3.20%
Death Benefit Risk Charge............................................. 0.20%
Administration Expense Charge................................... $1.60 and
$.50
per payment
plus $20.00
issuance
fee
Separate Account Annual Asset Charge, as a percentage of total net
assets:
Mortality Risk.................................................. 0.24%
Expense Risk.................................................... 0.05%
Total Separate Account Annual Asset Charge............................ 0.29%
Annual Operating Expenses of Growth Fund,(/2/) as a percentage of
average net assets for the December 31, 1996 fiscal year:
Investment Advisory Fees.............................................. 0.31%
Business Management Fees.............................................. 0.21%
Other Expenses........................................................ 0.07%
Fund Pricing Fee.............................................. 0.01%
Custodian Fees................................................ 0.02%
Miscellaneous (audit, legal, etc.)............................ 0.04%
Total Growth Fund Operating Expenses.................................. 0.59%
Minus Expense Reimbursements and Fee Waivers ......................... 0.02%
Net Fund Operating Expenses .......................................... 0.57%
</TABLE>
<PAGE>

EXAMPLE(/3/)

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- ------- --------
<S> <C> <C> <C> <C>
If you surrender your Contract at the end of
the applicable time period:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual re-
turn on assets:............................ $79 $96 $115 $169
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual re-
turn on assets:............................ $79 $96 $115 $169
</TABLE>

(/2/)The Operating Expenses of the Growth Fund are borne indirectly by
Contract Owners.

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

The date of this Supplement is May 1, 1997.
<PAGE>

INDIVIDUAL SINGLE PAYMENT AND INDIVIDUAL AND GROUP FLEXIBLE PAYMENT
VARIABLE DEFERRED ANNUITY CONTRACTS ISSUED BY
HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT

This Prospectus offers combination fixed and variable annuity contracts to
individuals, as single payment contracts, and to individuals and groups, as
flexible payment contracts, issued by Horace Mann Life Insurance Company
("HMLIC") in connection with retirement plans or arrangements some of which
may qualify for special tax treatment under the Internal Revenue Code as
amended. Amounts transferred to Horace Mann Life Insurance Company Separate
Account as directed by a Participant or Contract Owner are invested in one or
more of seven Subaccounts. Each Subaccount in turn purchases shares in a
corresponding portfolio of the Horace Mann Mutual Funds, an open-end
diversified management investment company. The Horace Mann Mutual Funds
consist of:

Horace Mann Growth Fund--a fund investing primarily in common stocks.

Horace Mann Small Cap Growth Fund--a fund investing in equity securities of
small cap companies with earnings growth potential.

Horace Mann International Equity Fund--a fund investing in marketable
foreign equity securities.

Horace Mann Socially Responsible Fund--a fund investing in equity securities
of United States-based companies which are determined to be socially
responsible pursuant to criteria set forth in the fund's Prospectus.

Horace Mann Balanced Fund--a fund investing in common stocks, debt
securities and money market instruments.

Horace Mann Income Fund--a fund investing primarily in debt securities.

Horace Mann Short-Term Investment Fund--a fund investing in short-term debt
instruments.

The funds listed above collectively are referred to as the "Funds."

This Prospectus sets forth concisely the information a prospective investor
should know before investing. Additional information about the Horace Mann
Life Insurance Company Separate Account has been filed with the Securities and
Exchange Commission in a Statement of Additional Information, dated May 1,
1997, and is incorporated herein by reference. The Statement of Additional
Information is available upon request, without charge, by writing to Horace
Mann Life Insurance Company, P.O. Box 4657, Springfield, Illinois 62708-4657,
by sending a telefacsimile (FAX) transmission to (217) 527-2307, or by
telephoning (217) 789-2500 or (800) 999-1030 (toll-free). The Table of
Contents of the Statement of Additional Information appears on page 19 of this
Prospectus.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE
FUNDS.*
BOTH PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING
AND RETAINED FOR FUTURE REFERENCE.

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

The date of this Prospectus is May 1, 1997.

*The Funds' Prospectus follows page 19 of the Horace Mann Life Insurance
Company Separate Account Prospectus.
<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TOPIC PAGE
- ----- ----
<S> <C>
DEFINITIONS............................................................... 3
SUMMARY................................................................... 4
CONDENSED FINANCIAL INFORMATION........................................... 8
HORACE MANN LIFE INSURANCE COMPANY, THE ACCOUNT AND THE HORACE MANN MUTUAL
FUNDS.................................................................... 10
Horace Mann Life Insurance Company...................................... 10
The Account............................................................. 10
The Horace Mann Mutual Funds............................................ 10
THE CONTRACT.............................................................. 11
Contract Owners' Rights................................................. 11
Purchasing the Contract................................................. 11
Purchase Payments....................................................... 11
Amount and Frequency of Purchase Payments............................. 11
Allocation of Purchase Payments....................................... 11
Accumulation Units and Accumulation Unit Value........................ 11
Transactions............................................................ 11
Transfers............................................................. 11
Changes in Allocation Instructions.................................... 12
Surrender Before Commencement of Annuity Period....................... 12
Deferment............................................................. 13
Confirmations......................................................... 13
Deductions and Expenses................................................. 13
Annual Maintenance Charge............................................. 13
Asset Charge for Mortality, Expense and Distribution Expense Risks.... 13
Operating Expenses of the Horace Mann Mutual Funds.................... 13
Premium Taxes......................................................... 13
Death Benefit Proceeds.................................................. 13
Mandatory Minimum Distribution.......................................... 14
Income Payments......................................................... 14
Income Payment Options................................................ 14
Amount of Fixed and Variable Income Payments.......................... 15
Misstatement of Age..................................................... 16
Modification of the Contract............................................ 16
TAX CONSEQUENCES.......................................................... 16
Separate Account........................................................ 16
Contract Owners......................................................... 16
Contributions......................................................... 16
Distributions Under Qualified Contracts............................... 17
Distributions Under Non-Qualified Contracts........................... 17
Penalty Tax........................................................... 18
VOTING RIGHTS............................................................. 18
OTHER INFORMATION......................................................... 18
ADDITIONAL INFORMATION.................................................... 19
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF, OR SOLICITATION OF AN OFFER
TO ACQUIRE, ANY INTEREST OR PARTICIPATION IN THE CONTRACTS OFFERED BY THIS
PROSPECTUS IN ANY STATE TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION IN SUCH STATE.

2
<PAGE>

DEFINITIONS
- -------------------------------------------------------------------------------
ACCOUNT: Horace Mann Life Insurance Company Separate Account, a segregated
variable investment account consisting of seven Subaccounts each of which
invests in the corresponding Horace Mann Fund. The Account was established by
Horace Mann Life Insurance Company under Illinois law and registered as a unit
investment trust under the Investment Company Act of 1940.

ACCUMULATION UNIT: A unit of measurement used to determine the value of a
Contract Owner's interest in a Subaccount before Income Payments begin.

ANNUITANT: The recipient of Income Payments.

ANNUITY PERIOD: The period during which income payments are made to the
Annuitant or the last surviving Joint Annuitant, if any.

ANNUITY UNIT: A unit of measurement used in determining the amount of
variable Income Payment during the annuity period.

CERTIFICATE: Each Participant under a group Contract is issued a Certificate
summarizing the provisions of the Contract and showing participation in the
retirement plan adopted by the Contract Owner.

CONTRACT: This Prospectus offers combination fixed and variable annuity
Contracts to individuals as single payment Contracts and to both individuals
and groups as flexible payment Contracts. The term "Contract" in this
Prospectus generally will be used to describe Contracts issued to individuals
and Certificates issued to Participants in a group plan.

CONTRACT OWNER: The individual or entity to whom the Contract is issued.
Under a group contract, all references to the Contract Owner refer to the
Participant in a group plan.

CONTRACT YEAR: A year measured from the date a Contract (or a Certificate)
was issued to an individual Contract Owner (or a Participant) and each
anniversary of this date.

FUNDS: The Horace Mann Mutual Funds consist of seven portfolios: Horace Mann
Growth Fund ("Growth Fund"), Horace Mann Small Cap Growth Fund ("Small Cap
Growth Fund"), Horace Mann International Equity Fund ("International Equity
Fund"), Horace Mann Socially Responsible Fund ("Socially Responsible Fund"),
Horace Mann Balanced Fund ("Balanced Fund"), Horace Mann Income Fund ("Income
Fund") and Horace Mann Short-Term Investment Fund ("Short-Term Fund"). The
Fund is an open-end, diversified, management investment company registered
under the Investment Company Act of 1940.

INCOME PAYMENTS: A series of payments that may be for life; for life with a
minimum number of payments; for the joint lifetimes of the Annuitant and
another person, and thereafter, during the lifetime of the survivor; or for
some fixed period. A fixed annuity provides a series of payments that will be
substantially equal in amount throughout the annuity payout period. A fixed
annuity does not participate in the investment experience of any subaccount. A
variable annuity provides a series of payments that vary in amount depending
upon the investment experience of the Subaccount(s) selected by the Contract
Owner.

MATURITY DATE: The date Income Payments begin. The individual Contracts
offered by this Prospectus describe the criteria for determining Maturity
Dates.

In addition, tax qualified plans often place certain limitations upon
election of a Maturity Date. Generally, distributions under tax qualified
plans must begin by April 1 following the calendar year in which the Contract
Owner or Participant reaches age 70 1/2. See "The Contract--Mandatory Minimum
Distribution."

NET PURCHASE PAYMENT: The balance of each Purchase Payment received by
Horace Mann Life Insurance Company after deducting any applicable premium
taxes, or the balance of any transfer amount from other Subaccounts after
applicable charges, or dividends reinvested after applicable charges.

PARTICIPANT: A person to whom a Certificate showing participation under a
group Contract has been issued.

PURCHASE PAYMENT: An amount paid to Horace Mann Life Insurance Company as
consideration for the Contract, the amount transferred from other Subaccounts,
and any dividends reinvested.

QUALIFIED PLAN: A tax-sheltered annuity as defined in Section 403(b) or a
simplified employee pension plan as defined in Section 408(k) of the Internal
Revenue Code. IRAs as defined in Section 408(b) could be qualified in some
situations.

SUBACCOUNT: A division of the Separate Account of Horace Mann Life Insurance
Company which invests in shares of the corresponding portfolio of the Horace
Mann Mutual Funds.

SURRENDER CHARGE: (a contingent deferred sales charge) An amount kept by
Horace Mann Life Insurance Company if a withdrawal is made or if the Contract
is surrendered. The charge is intended to compensate Horace Mann Life
Insurance Company for the cost of selling the product.

VALUATION DATE: The Valuation Date ends at the earlier of 3:00 p.m. central
time or at the closing of the New York Stock Exchange. No valuations are made
for any day that the New York Stock Exchange is closed. For 1997 no valuations
are made for the day after Thanksgiving or December 26, 1997, and for 1998,
prior to the expiration of this Prospectus, January 2, 1998.

VALUATION PERIOD: The period from the end of a Valuation Date to the end of
the next Valuation Date, excluding the day the period begins and including the
day it ends.

3
<PAGE>

SUMMARY
- -------------------------------------------------------------------------------
This summary is intended to provide a brief overview of the more significant
aspects of the Contract. Further information can be found in this Prospectus,
the HMLIC Separate Account Statement of Additional Information, and the
Contract. This Prospectus is intended to serve as a disclosure document for
the variable portion of the Contracts only. As used in this Prospectus,
"variable" means that the value depends on the investment performance of the
portfolio selected from the Horace Mann Mutual Funds. For information
regarding the fixed portion, refer to the Contract.

Detailed information about the Horace Mann Mutual Funds is contained in the
Funds' Prospectus which immediately follows this Prospectus for Horace Mann
Life Insurance Company Separate Account, and the Fund's Statement of
Additional Information. Each Fund's expenses, including advisory and
management fees, are found in the Table of Annual Operating Expenses shown on
page 6 of this Summary.

WHAT IS "THE SEPARATE ACCOUNT"?
HMLIC established the Horace Mann Life Insurance Company Separate Account
(the "Account") to segregate assets dedicated to the variable portion of the
combination fixed and variable Contracts offered herein. The Account is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 as a unit investment trust. The Account consists of seven
Subaccounts, each investing solely in shares of the corresponding portfolio of
the Horace Mann Mutual Funds: Growth Fund, Small Cap Growth Fund,
International Equity Fund, Socially Responsible Fund, Balanced Fund, Income
Fund and Short-Term Fund.

WHO MAY PURCHASE A HORACE MANN ANNUITY OFFERED BY THIS PROSPECTUS?
Individuals, as well as groups, may purchase the combination fixed and
variable flexible payment annuity. Individuals may also purchase the single
payment plan. The Contracts offered by this Prospectus are designed to provide
retirement benefits in connection with Section 403(b) Annuities, Individual
Retirement Annuities ("IRAs"), Simplified Employee Pension Plans ("SEPs") and
non-qualified Retirement Annuities.

The Contract is offered and sold by HMLIC through its licensed life
insurance sales personnel, who are registered representatives of Horace Mann
Investors, Inc. ("Investors"). HMLIC has entered into a distribution agreement
with Investors an affiliated broker-dealer registered under the Securities and
Exchange Act of 1934. Investors is a member of the National Association of
Securities Dealers, Inc. (NASD).

IS THERE A MINIMUM PURCHASE PAYMENT?
The minimum annual Purchase Payment under a flexible payment Contract during
any Contract Year is $225. The minimum Purchase Payment under a single payment
Contract is $5,000. No Purchase Payments are required after the first Contract
Year. Contract Owners may elect to allocate all or part of the Purchase
Payments to one or more Subaccount(s). The minimum Purchase Payment allocated
to any Subaccount within any given Contract Year must equal or exceed $100.

WHAT ARE MY INVESTMENT CHOICES?
(a) SEPARATE ACCOUNT

Includes seven Subaccounts:

GROWTH FUND--a fund investing primarily in common stocks.

SMALL CAP GROWTH FUND--a fund investing in equity securities of small cap
companies with earnings growth potential.

INTERNATIONAL EQUITY FUND--a fund investing in marketable foreign equity
securities.

SOCIALLY RESPONSIBLE FUND--a fund investing in equity securities of United
States-based companies which are determined to be socially responsible
pursuant to criteria set forth in the funds prospectus.

BALANCED FUND--a fund investing in common stocks, debt securities and money
market instruments.

INCOME FUND--a fund investing primarily in debt securities.

SHORT-TERM FUND--a fund investing in short-term debt instruments.

(b) FIXED ACCOUNT (See the Contract)

At anytime before the Contract's Maturity Date, amounts may be transferred
from one Subaccount to another, and to and from the fixed portion of the
Contract. (Transfers from the fixed portion of the Contract into a Subaccount
are treated like any other partial withdrawal from the fixed portion of the
Contract, except that no surrender charge is imposed.) The minimum amount that
can be transferred is $100 or the entire dollar value of the Subaccount,
whichever is less. See "The Contract-- Transactions--Transfers."

MAY I WITHDRAW ALL OR PART OF THE CONTRACT VALUE BEFORE THE MATURITY DATE?
Unless restricted by his or her retirement plan or by the Internal Revenue
Code (IRC), a Contract Owner may at any time before the Maturity Date
surrender his or her Contract in whole or withdraw in part for cash. Partial
withdrawals are subject to a $100 minimum. Each surrender or partial
withdrawal is processed on the basis of the net asset value(s) of an
accumulation unit of the Subaccount(s) from which the value is being
surrendered or withdrawn. Surrenders and withdrawals may be subject to
Surrender Charges as described on page 12 in this Prospectus.

4
<PAGE>

WHAT ARE THE CHARGES OR DEDUCTIONS?
Contracts are subject to deductions for applicable state or local government
premium taxes. Premium taxes presently range from 0 to 3.5%.

An asset charge, computed weekly, is deducted from the account value for
mortality risk, expense risk, and distribution risk. This charge will not
exceed 1.35% of the Contract Owner's average value in a Subaccount, on an
annual basis.

A fixed annual maintenance charge of $25 is assessed against the Contract on
each anniversary, unless the Contract value equals or exceeds $10,000, in
which case such charge is waived.

No deduction for sales expense is charged on Purchase Payments, but a
surrender charge is assessed against certain withdrawals and surrenders. In
the first Contract Year the charge is 8% of the amount withdrawn for the
Flexible Payment Contract and 5% for the Single Premium Contract. The charge
is on a decreasing scale and by the 6th Contract Year has vanished. The charge
is taken from the Contract Owner's value in the Subaccount(s) from which the
withdrawal is made. In no event will the charges exceed 8.5% of the Net
Purchase Payments to the Subaccount(s). See "The Contract--Transactions--
Surrender Before Commencement of Annuity Period."

WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF INVESTING IN THIS CONTRACT?
The IRC provides penalties for premature distributions under various
retirement plans. Values may not be withdrawn from Section 403(b) Contracts
except under certain circumstances. See "Tax Consequences." This Contract
might not be suitable for short-term investment. See "The Contract--
Transactions--Surrender Before Commencement of Annuity Period."

IF I RECEIVE MY CONTRACT AND AM DISSATISFIED, MAY I RETURN IT?
Subject to various state insurance laws, generally the Contract Owner may
return the Contract to HMLIC within 30 days of receipt of the Contract and
will receive the market value of the assets purchased by payments paid to the
Account, less any taxes.

WHEN CAN I BEGIN RECEIVING INCOME PAYMENTS, AND WHAT OPTIONS ARE AVAILABLE?
Payments will begin on the Maturity Date selected by the Contract Owner.
Variable Income Payments are made in monthly installments. A lump sum payment
may be made, however, if the total Contract value is less than $2,000 or if
monthly Income Payments at the Maturity Date would be less than $20. An
optional Maturity Date and various income payment options are available under
the Contract.

Income Payments may be fixed or variable or a combination of fixed and
variable payments. The following options are available for receiving Income
Payments: Life Annuity with or without Certain Period, Joint and Survivor Life
Annuity, Income for Fixed Period, Income for Fixed Amount, and Interest Income
Payments.

5
<PAGE>

TABLE OF ANNUAL OPERATING EXPENSES
- -------------------------------------------------------------------------------

The following is a summary of costs and expenses borne by the Contract Owner
in connection with an investment in the Account.

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
<TABLE>
<S> <C>
Contract Owner Transaction Expenses:(/1/)
Maximum Surrender Charge as a percentage of redemption proceeds(/2/)
--for Single Payment Contracts...................................... 5.00%
--for Flexible Payment Contracts.................................... 8.00%
Annual Maintenance Charge(/3/).......................................... $25
Separate Account Annual Asset Charge, as a percentage of average account
value:
Mortality Risk........................................................ 0.45%
Expense Risk.......................................................... 0.15%
Distribution Expense Risk............................................. 0.75%
Total Separate Account Annual Asset Charge.............................. 1.35%
</TABLE>

HORACE MANN MUTUAL FUNDS
Annual Operating Expenses of the Horace Mann Mutual Funds, as a percentage
of average daily net assets (net of reimbursements and fee waivers):

<TABLE>
<CAPTION>
SMALL CAP INTERNATIONAL SOCIALLY SHORT-
GROWTH(/5/) GROWTH(/7/) EQUITY(/7/) RESPONSIBLE(/7/) BALANCED(/5/) INCOME(/5/) TERM(/5/)
FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ------------- ---------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees (after
waiver)................ 0.52% 1.00% 0.70% 0.55% 0.50% 0.47% 0.35%
Other Expenses.......... 0.05% 0.34% 0.34% 0.34% 0.04% 0.23% 0.18%
----- ----- ----- ----- ----- ----- -----
Total Fund Operating
Expense (after waiver). 0.57% 1.34% 1.04% 0.89% 0.54% 0.70%(/4/) 0.53%(/6/)
</TABLE>

(/1/)Premium taxes, currently ranging between 0 and 3.5%, are not included.
The rate of the premium tax varies depending upon the state of residence, and
not all states impose premium taxes. Also, depending on the state, taxes are
taken from Purchase Payments or are levied at annuitization.

(/2/)In some cases, the Surrender Charge does not apply. See "The Contract--
Transactions--Surrender Before Commencement of Annuity Period."

(/3/)The annual maintenance charge equals $25 per year, unless the Contract
value equals or exceeds $10,000 at each anniversary. The annual maintenance
charge is not deducted after the Maturity Date.

(/4/)Total Fund Operating Expenses of the Income Fund for the year ended
December 31, 1996, without any waivers or expense reimbursements, were 0.91%.
Net operating expenses of the Income Fund, adjusted for business management
fees waived by Investors, were 0.70%.

(/5/)The expenses are shown for the fiscal year ending December 31, 1996.

(/6/)Total Fund Operating Expenses for the Short-Term Fund for the year ended
December 31, 1996, without any waivers or expense reimbursements, were 2.44%.
Net operating expenses of the Short-Term Fund, adjusted for business
management fees waived by Investors, were 0.53%.

(/7/)The expenses are shown based on estimated amounts for the current fiscal
year. The Small Cap Growth Fund, International Equity Fund and Socially
Responsible Fund commenced operations on March 10, 1997. Horace Mann
Investors, Inc. has voluntarily agreed to waive a portion of its management
fee and reimburse certain expenses during the first year of the Funds'
operations. The effect of this reduction in the management fee and
reimbursement of expenses is reflected in the above table. Without such
waiver, the management fee and total fund operating expenses, respectively,
would be expected to be: 1.40% and 4.32% for the Small Cap Growth Fund; 1.10%
and 4.30% for the International Equity Fund; and 0.95% and 3.87% for the
Socially Responsible Fund.

6
<PAGE>

EXAMPLE(/1/)

<TABLE>
<CAPTION>
SMALL CAP SOCIALLY SHORT-
GROWTH GROWTH INTERNATIONAL RESPONSIBLE BALANCED INCOME TERM
FUND FUND EQUITY FUND FUND FUND FUND FUND
------ --------- ------------- ----------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR FLEXIBLE PAYMENT
CONTRACTS
If you surrender your
Contract at the end of
the applicable time
period:
You would pay the
following expenses on a
$1,000 investment,
assuming 5% annual
return on assets:
1 year $103 $110 $107 $106 $103 $104 $103
3 years $129 $151 $143 $139 $129 $133 $128
5 years $110 $108 $116 $108
10 years $237 $234 $250 $233
If you do not surrender
your Contract:
You would pay the
following expenses on a
$1,000 investment,
assuming 5% annual
return on assets:
1 year $ 21 $ 28 $ 25 $ 24 $ 20 $ 22 $ 20
3 years $ 64 $ 87 $ 78 $ 74 $ 63 $ 68 $ 63
5 years $110 $108 $116 $108
10 years $237 $234 $250 $233
FOR SINGLE PAYMENT
CONTRACTS
If you surrender your
Contract at the end of
the applicable time
period:
You would pay the
following expenses on a
$1,000 investment,
assuming 5% annual
return on assets:
1 year $ 72 $ 80 $ 77 $ 75 $ 72 $ 73 $ 72
3 years $ 97 $119 $111 $106 $ 96 $101 $ 96
5 years $110 $108 $116 $108
10 years $237 $234 $250 $233
If you do not surrender
your Contract:
You would pay the
following expenses on a
$1,000 investment,
assuming 5% annual
return on assets:
1 year $ 21 $ 28 $ 25 $ 24 $ 20 $ 22 $ 20
3 years $ 64 $ 87 $ 78 $ 74 $ 63 $ 68 $ 63
5 years $110 $108 $116 $108
10 years $237 $234 $250 $233
</TABLE>

(/1/)The EXAMPLE should not be considered a representation of past or future
expenses. Amounts shown are based on the "Other Expenses" shown on the fee
table and average cash value of the average number of annuity Contracts in the
accumulation phase during the 1996 calendar year. The Small Cap Growth Fund,
International Equity Fund and Socially Responsible Fund commenced operations
on March 10, 1997; thus, estimates of expenses in the example are shown for
only the one and three year periods. Actual expenses may be greater or less
than those shown. There is no assumption for premium taxes, applicable in
certain states, in these examples.

7
<PAGE>

CONDENSED FINANCIAL INFORMATION
- -------------------------------------------------------------------------------

The following information is taken from the Separate Account financial
statements. Condensed financial information is not available for the Small Cap
Growth Fund, International Equity Fund and Socially Responsible Fund because
they each commenced operations on March 10, 1997. Please read the financial
statements in conjunction with this information and the Statement of
Additional Information.

<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION # UNITS
UNIT VALUE UNIT VALUE OUTSTANDING
BEGINNING OF END OF END OF
YEAR ENDED PERIOD PERIOD PERIOD
---------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
GROWTH FUND 12/31/96 $21.66 $23.76 13,503,527
12/31/95 17.64 21.66 9,499,642
12/31/94 19.85 17.64 7,444,937
12/31/93 19.49 19.85 5,271,528
12/31/92 19.15 19.49 3,847,269
12/31/91 16.64 19.15 3,244,626
12/31/90 18.88 16.64 2,748,244
12/31/89 17.30 18.88 2,349,405
12/31/88 16.00 17.30 2,110,447
12/31/87 21.29 16.00 1,959,967
BALANCED FUND 12/31/96 $18.00 $18.94 15,151,785
12/31/95 15.26 18.00 12,085,917
12/31/94 16.72 15.26 10,010,131
12/31/93 16.22 16.72 7,470,133
12/31/92 15.91 16.22 5,352,185
12/31/91 14.19 15.91 4,274,088
12/31/90 15.10 14.19 3,528,857
12/31/89 13.48 15.10 2,697,026
12/31/88 12.71 13.48 2,142,638
12/31/87 14.91 12.71 1,644,390
INCOME FUND 12/31/96 $13.03 $12.69 817,803
12/31/95 12.02 13.03 776,272
12/31/94 13.06 12.02 746,535
12/31/93 12.95 13.06 694,843
12/31/92 12.92 12.95 566,223
12/31/91 12.26 12.92 473,423
12/31/90 12.35 12.26 415,716
12/31/89 11.64 12.35 346,639
12/31/88 11.59 11.64 279,341
12/31/87 13.96 11.59 207,215
SHORT-TERM FUND 12/31/96 $10.00 $10.03 112,004
12/31/95 10.08 10.00 95,982
12/31/94 10.07 10.08 103,526
12/31/93 10.09 10.07 106,595
12/31/92 10.10 10.09 99,345
12/31/91 10.37 10.10 94,194
12/31/90 10.73 10.37 106,548
12/31/89 10.49 10.73 96,997
12/31/88 10.25 10.49 98,300
12/31/87 11.17 10.25 72,271
</TABLE>

8
<PAGE>

Accumulation Unit Values shown above are reduced annually for dividend
distributions from each underlying mutual fund. Dividend distributions are
used to purchase additional Accumulation Units.

Financial statements of the Account and of HMLIC are available with the
Statement of Additional Information. A copy of the Statement of Additional
Information and of the financial statements may be obtained without charge by
mailing a written request to Horace Mann Life Insurance Company, P.O. Box
4657, Springfield, Illinois 62708-4657, by sending a telefacsimile (FAX)
transmission request to (217) 527-2307, or by telephoning (217) 789-2500 or
(800) 999-1030 (toll-free).

From time to time the Account may advertise total return for the subaccount.
Total return may be used for all seven subaccounts. Total return performance
figures represent past performance and are not intended to indicate future
performance. Investment return and the principal value of an investment may
fluctuate. A Contract Owner's shares, when redeemed, may be worth more or less
than their original cost. Total return is computed by finding the average
annual compounded rate of return that would equate the initial amount invested
to the ending redeemable value.

All recurring charges shown in the Table of Annual Operating Expenses are
reflected in the calculations of the performance figures. Any nonrecurring
charges are also reflected in the calculation of the performance figures.
Total return may be calculated to reflect the fact that certain expenses have
been reimbursed or waived. In addition, total return calculations assume
redemption at the end of the stated period and, therefore, reflect the
applicable Surrender Charge. However, comparative figures may be presented
that do not assume redemption and do not reflect the Surrender Charge.

9
<PAGE>

HORACE MANN LIFE INSURANCE COMPANY,
THE ACCOUNT AND
THE HORACE MANN MUTUAL FUNDS

HORACE MANN LIFE INSURANCE COMPANY
Horace Mann Life Insurance Company ("HMLIC") located at One Horace Mann
Plaza, Springfield, Illinois 62715-0001, is an Illinois stock life insurance
company organized in 1949. HMLIC is licensed to do business in 48 states and
in the District of Columbia. HMLIC writes individual and group life insurance
and annuity contracts on a nonparticipating basis.

HMLIC is an indirect wholly-owned subsidiary of Horace Mann Educators
Corporation ("HMEC"), a publicly-held insurance holding company traded on the
New York Stock Exchange.

THE ACCOUNT
On October 9, 1965, HMLIC established the Account under Illinois law. The
Account is registered with the Securities and Exchange Commission as a unit
investment trust under the Investment Company Act of 1940. The Account and
each subaccount are administered and accounted for as a part of the business
of HMLIC. However, the income gains and losses, whether or not realized, of
each subaccount are credited to or charged against the amounts allocated to
that subaccount in accordance with the terms of the Contracts without regard
to other income, gains or losses of the remaining subaccounts or of HMLIC. The
assets of the Account may not be charged with liabilities arising out of any
other business of HMLIC. All obligations arising under the Contracts,
including the promise to make Income Payments, are general corporate
obligations of HMLIC. Accordingly, all of HMLIC's assets are available to meet
its obligations and expenses under the Contracts. While HMLIC is obligated to
make payments under the Contracts, the amount of variable Income Payments are
not guaranteed since the payment amounts fluctuate in accordance with the
performance of the subaccounts.

THE HORACE MANN MUTUAL FUNDS
The Horace Mann Mutual Funds ("Funds") are an open-end, diversified,
management investment company registered under the Investment Company Act of
1940. The Funds issue shares of common stock that are continually offered for
sale. The Funds, advised by Horace Mann Investors, Inc. ("Investors"), invest
in securities of different issuers and industry classifications in an attempt
to spread and reduce the risks inherent in all investing. Investors has
entered into an agreement with an investment subadviser for each of the Funds
whereby the subadviser manages the investment and reinvestment of the assets
of a Fund.

The primary investment objective of the Growth Fund is long-term capital
growth; conservation of principal and production of income are secondary
objectives. The Growth Fund invests primarily in common stocks. Wellington
Management, LLP serves as the investment subadviser to the Growth Fund.

The investment objective of the Small Cap Growth Fund is long-term capital
appreciation through small cap stocks with earnings growth potential. The
Small Cap Growth Fund invests primarily in small cap stocks, which the
subadviser considers to have favorable and above-average earnings growth
prospects. PNC Equity Advisers Company serves as investment subadviser to the
Small Cap Growth Fund.

The primary investment objective of the International Equity Fund is long
term capital growth primarily through diversified holding of marketable
foreign equity investments. The International Equity Fund invests primarily in
equity securities of established companies, listed on foreign exchanges, which
the subadviser believes have favorable characteristics. It may also invest in
fixed income securities of foreign governments and companies. Scudder, Stevens
& Clark, Inc. serves as the investment subadviser to the International Equity
Fund.

The investment objective of the Socially Responsible Fund is long term
capital growth, above average current income and growth of income. The
Socially Responsible Fund invests primarily in marketable equity securities,
including common stocks, preferred stocks, and debt securities convertible
into common stocks of seasoned financially strong U.S.-based companies.
Investments in equity securities are limited to issuers which the subadviser
determines:

1. Do not produce tobacco products;

2. Do not produce alcoholic beverages;

3. Do not own and/or operate casinos or manufacture gaming devices;

4. Do not produce nuclear weapons or guidance and/or delivery systems,
specifically for nuclear weapons;

5. By popular standards, maintain non-discriminatory employment practices
throughout a company's facilities; and

6. By popular standards, maintain environmental policies, practices and
procedures which are currently acceptable, or which are exhibiting
improvement.

Scudder, Stevens & Clark, Inc. serves as the investment subadviser to the
Socially Responsible Fund.

The primary investment objective of the Balanced Fund is to realize high
long-term total rate of return consistent with prudent investment risks. The
Balanced Fund's assets are invested in a mix of common stocks, debt securities
and money market instruments. Wellington Management, LLP serves as the
investment subadviser to the Balanced Fund.

The primary investment objective of the Income Fund is to achieve a long-
term total rate of return in excess of the U.S. bond market over a full market
cycle. The Income Fund invests primarily in debt securities. Wellington
Management Company, LLP serves as the investment subadviser to the Income
Fund.

10
<PAGE>

The primary investment objective of the Short-Term Fund is to realize
maximum current income to the extent consistent with liquidity. Preservation
of principal is a secondary objective. The Short-Term Fund attempts to realize
its objectives through investments in short-term debt instruments; it is not a
money market fund and does not maintain a stable net asset value per share.
Wellington Management, LLP serves as the investment subadviser to the Short-
Term Fund.

Detailed information on the Funds is contained in the Funds' Prospectus
which accompanies this Prospectus.

THE CONTRACT

CONTRACT OWNERS' RIGHTS
A Contract may be issued under a retirement plan on a qualified basis as
defined in the IRC or on a non-qualified basis. Qualified and non-qualified
contracts receive different tax treatment. See "Tax Consequences."

To participate in a qualified plan, the Contract Owner may be required to
forego certain rights granted by the Contract and should refer to the
provisions of his or her Contract, the provisions of the plan or trust
instrument, and/or applicable provisions of the IRC.

Unless otherwise provided by law, and subject to the terms of any governing
plan or trust, the Contract Owner may exercise all privileges of ownership, as
defined in the Contract, without the consent of any other person. These
privileges include the right during the period specified in the Contract to
change the beneficiary designated in the Contract, to designate a payee and to
agree to a modification of the Contract terms.

This Prospectus describes only the variable portions of the Contract. On the
Maturity Date, the Contract Owner has limited rights to acquire fixed annuity
payout options. See the Contract for details regarding fixed Income Payments.

PURCHASING THE CONTRACT
The Contract is offered and sold by HMLIC through its licensed life
insurance sales personnel who are also registered representatives of
Investors. HMLIC has entered into a distribution agreement with Investors,
principal underwriter of the Account. Investors, located at One Horace Mann
Plaza, Springfield, Illinois 62715-0001, is a broker-dealer registered under
the Securities Exchange Act of 1934. Investors is a member of the NASD and is
a wholly-owned subsidiary of Horace Mann Educators Corporation.

In order to purchase a Contract offered by this Prospectus, an applicant
must complete an application bearing all requested signatures and a properly
endorsed suitability questionnaire. For a Contract issued pursuant to Section
403(b) of the IRC, the applicant must also submit a signed acknowledgment of
the IRC restrictions on withdrawals applicable to such contracts. For an
Individual Retirement Annuity ("IRA") or a Contract issued under a simplified
employee pension plan, the applicant must also sign an IRA disclosure form.

Applications for Contracts are to be sent to HMLIC's Home Office. If an
incomplete application is received, HMLIC will promptly request that the
applicant furnish additional information needed to process the application.
The initial Purchase Payment will be held in a suspense account, without
interest, for a period not exceeding five business days. If the necessary
information is not received within these five business days HMLIC will return
the initial Purchase Payment, unless otherwise directed by the applicant.

Sales commissions are paid by HMLIC. Sales commissions typically range from
1% to 6% of Purchase Payments received.

PURCHASE PAYMENTS
AMOUNT AND FREQUENCY OF PURCHASE PAYMENTS--The minimum acceptable annual
Purchase Payment under a flexible payment Contract is $225. No Purchase
Payments are required after the first Contract Year. Payments may be made in
lump sum or installments. The minimum acceptable monthly Purchase Payment is
$25. The minimum acceptable Purchase Payment under a single payment Contract
is $5,000.

The IRC limits the amounts which may be contributed to qualified plans. See
"Tax Consequences--Contract Owners Contributions."

ALLOCATION OF PURCHASE PAYMENTS--All or part of the Purchase Payments made
may be allocated to one or more subaccounts. The minimum Purchase Payment
amount allocated to any subaccount in any given Contract Year must equal or
exceed $100.

ACCUMULATION UNITS AND ACCUMULATION UNIT VALUE--The number of Accumulation
Units purchased by Purchase Payments is determined by dividing the dollar
amount credited to each subaccount by the applicable accumulation unit value
next determined following receipt of the payment by HMLIC.

Accumulation Units are valued on each Valuation Date. The accumulation unit
value of each subaccount is equal to the net asset value of the underlying
Fund (computed by dividing the net assets of a mutual fund by the outstanding
number of mutual fund shares on each Valuation Date). Dividends declared by
the underlying Fund of each subaccount, net of applicable deductions and
charges, are used to purchase additional Accumulation Units. To the extent
that deductions and charges exceed dividends, Accumulation Units will be
surrendered. The accumulation unit value of the Growth Fund was established at
$16.87 on October 9, 1965. The accumulation unit value of the Balanced Fund,
Income Fund and Short-Term Investment Fund was established at $10.00 on
February 1, 1983. The accumulation unit value of the Small Cap Growth Fund,
International Equity Fund and Socially Responsible Fund was established at
$10.00 on March 10, 1997.

TRANSACTIONS
TRANSFERS--Amounts may be transferred from one subaccount to another, and to
and from the fixed portion of the Contract, prior to the Maturity Date.
(Transfers from the fixed

11
<PAGE>

portion of the Contract into a subaccount are treated like any other partial
withdrawal from the fixed portion, except that no charges are imposed). The
minimum amount that can be transferred is $100 or the entire dollar value of
the subaccount(s), whichever is less.

A Contract Owner may elect to transfer funds between subaccounts by
submitting a written request to Horace Mann Life Insurance Company at P.O. Box
4657, Springfield, Illinois 62708-4657 or by calling (800) 999-1030.
Telefacsimile (FAX) transmissions of the request also will be accepted if sent
to (217) 527-2307. The request must: (1) be signed by the Contract Owner or,
for telephone transactions, be made by the Contract Owner, (2) include the
name of the Contract Owner and the Contract number, and (3) specifically state
either the dollar amount or the number of accumulation units to be
transferred. The request also must specify the subaccounts from which and to
which the transfer is to be made. Transfers are effective either on a date
specified in the request, provided that date falls on or after receipt of the
request at the Home Office, or on the first Valuation Date following receipt
of the request by the Home Office.

Up to twelve transfers may be pre-scheduled at any point in time. The twelve
transfers cannot extend beyond a twelve month period. A signed written request
or form must be completed. See "Other Information-Forms Availability." If a
Contract Owner decides to cancel a pre-scheduled transfer arrangement, he or
she should notify the Home Office in writing prior to the next designated
transfer date.

CHANGES IN ALLOCATION INSTRUCTIONS--A Contract Owner may elect to change the
allocation of future Purchase Payments at any time by mailing a written
request to Horace Mann Life Insurance Company at P.O. Box 4657, Springfield,
Illinois 62708-4657 or by sending a telefacsimile (FAX) transmission to (217)
527-2307. The request must: (1) be signed by the Contract Owner, (2) include
the Contract Owner's name and Contract number, and (3) specify the new
allocation percentage for each subaccount. If allocations are made to the
fixed portion of the Contract or to one or more subaccounts, the percentages
must total 100%. Changes in allocation instructions are effective either on a
date specified in the request, provided that date falls on or after receipt of
the request in the Home Office, or on the first Valuation Date following
receipt of the request by the Home Office. See "Other Information-Forms
Availability."

SURRENDER BEFORE COMMENCEMENT OF ANNUITY PERIOD--Values may not be withdrawn
from Section 403(b) Contracts except under certain circumstances. (See "Tax
Consequences.") However, if not restricted by the IRC or applicable retirement
plan under which the Contract is issued, a Contract Owner may surrender the
Contract in whole or withdraw in part for cash before Income Payments begin.

The surrender or partial withdrawal value is determined on the basis of the
accumulation unit value next computed following the receipt of the request for
surrender or partial withdrawal. A surrender or partial withdrawal may result
in adverse federal income tax consequences to the Contract Owner. These
consequences include current taxation of payments received, and may include
penalties resulting from premature distribution. See "Tax Consequences."

A Contract Owner eligible to surrender or request a partial withdrawal may
elect to do so by submitting a signed, written request to Horace Mann Life
Insurance Company at its Home Office at P.O. Box 4657, Springfield, Illinois
62708-4657. A surrender or partial withdrawal request must be in a form
acceptable to HMLIC; telefacsimile (FAX) transmissions of the request will not
be accepted. See "Tax Consequences and Other Information-Forms Availability."

Partial withdrawals and surrenders will be processed either on a date
specified by you in a request, provided the date specified occurs on or after
receipt of the request at the Home Office, or on the first Valuation Date
following receipt of the request at the Home Office.

Any partial withdrawal is subject to a $100 minimum and may not reduce the
Contract Owner's interest in a subaccount to less than $100. A complete
surrender may be made at any time, unless otherwise restricted by the
retirement plan or the IRC.

Surrenders and partial withdrawals from any variable subaccount are subject
to the following Surrender Charges:

<TABLE>
<CAPTION>
DURING FLEXIBLE SINGLE
CONTRACT PAYMENT PAYMENT
YEAR CONTRACTS CONTRACTS
<S> <C> <C>
1 8% 5%
2 8% 4%
3 6% 3%
4 4% 2%
5 2% 1%
Thereafter 0% 0%
</TABLE>

Surrender Charges are applied to withdrawals based on the date the account is
opened and not on the date the premium is paid.

Partial withdrawals may be made without charge if (1) the withdrawal does
not exceed 15% of the Contract value; (2) the Contract has been in force for
two or more Contract Years; and (3) more than twelve months have passed since
the date of the last partial withdrawal. Contract value is computed on the
first Valuation Date following receipt of the request in good form by the Home
Office. If all three conditions are not met, partial withdrawals are subject
to Surrender Charges.

Any request for partial withdrawal, where the withdrawal is subject to a
Surrender Charge, will be increased by the amount of the Surrender Charge. For
example, a request to withdraw $3,000 at a 4% Surrender Charge will require a
withdrawal of $3,125. This withdrawal represents a cash distribution of $3,000
and a Surrender Charge of $125. Any taxes withheld will reduce the dollar
amount of the distribution.

12
<PAGE>

The Surrender Charge is assessed on the basis of the amount surrendered or
withdrawn from the subaccount(s), but will never exceed 8.5% of Net Purchase
Payment(s) to a subaccount during the lifetime of the Contract. For example,
if a Contract Owner's subaccount value is $12,000 and Purchase Payments to
date equal $10,000 and the Contract Owner withdraws $2,000 (i.e., one sixth of
the subaccount value), then the Surrender Charge may not exceed 8.5% of
$1,666.66 (one sixth of the Purchase Payment(s) to which the withdrawal
relates).

If premium taxes are deducted prior to surrender or partial withdrawal, any
reduction of HMLIC's premium tax liability due to the surrender or partial
withdrawal will be to HMLIC's benefit.

DEFERMENT--HMLIC ordinarily completes a transaction within seven calendar
days after receipt of a proper request to transfer, surrender, partially
withdraw or commence Income Payments. The value of the Contract is determined
as of the Valuation Date on which the request is received. However,
determination of Contract value and processing the transaction may be deferred
for (1) any period during which the New York Stock Exchange is closed for
other than customary weekend or holiday closings or during which trading is
restricted by the Securities and Exchange Commission; (2) any emergency period
when it is not reasonably practicable to sell securities or fairly determine
accumulation unit values or annuity unit values; or (3) any other period
designated by the Securities and Exchange Commission to protect persons with
interests in the Account.

CONFIRMATIONS--HMLIC mails written confirmations of Purchase Payments to
Contract Owners on a quarterly basis within five business days following the
end of each calendar quarter. Written confirmations of transfers, changes in
allocations, partial withdrawals, and surrenders, are mailed to Contract
Owners within seven calendar days of the date the transaction occurred.

If a Contract Owner believes that the confirmation statement contains an
error, the Contract Owner should notify HMLIC within three months after
receipt of the confirmation statement. Notice may be provided by writing to
HMLIC, P.O. Box 4657, Springfield, Illinois 62708-4657, by sending a
telefacsimile (FAX) transmission to (217) 527-2307, or by telephoning (217)
789-2500 or (800) 999-1030 (toll free).

DEDUCTIONS AND EXPENSES
ANNUAL MAINTENANCE CHARGE--An annual maintenance charge of $25 is deducted
from each Contract on the Contract anniversary date unless the contract value
equals or exceeds $10,000. The annual maintenance charge is deducted from the
subaccount containing the greatest dollar amount or from the fixed portion of
the Contract when none of the variable subaccounts have any value.

Charges for annual maintenance cease once Income Payments begin. No annual
maintenance charge is taken, in whole or in part, in the event of a complete
surrender unless the surrender occurs on the Contract anniversary date.

The annual maintenance charge is intended to reimburse HMLIC for actual
expenses incurred in administering the Contract. HMLIC does not expect to
profit from such annual maintenance charge and assumes the risk that this
annual maintenance charge may be insufficient to cover the actual costs of
administering the Contract. See below "Charges for Mortality, Expense and
Distribution Expense Risks."

ASSET CHARGE FOR MORTALITY, EXPENSE AND DISTRIBUTION EXPENSE RISKS--For
assuming mortality, expense, and distribution risks, HMLIC applies an asset
charge to the account value of each Contract. The asset charge for mortality,
expense and distribution expense risks, may not exceed the annual rate of
1.35% of the average net variable account value based on the date of
calculation (0.45% for mortality risks, 0.15% for expense risks and 0.75% for
distribution expense risks); however, HMLIC reserves the right to change the
asset charge (subject to the 1.35% ceiling) in the future. The asset charge
accumulates on a weekly basis at a rate of .0257205% of the net variable
account value as of the date of the calculation. The accumulated value of the
asset charge is deducted from each subaccount upon any surrender, partial
withdrawal or transfer of value or when dividends are paid, with the necessary
number of units, at the then current accumulation unit value, being redeemed
to equal the dollar amount of the charges owed.

OPERATING EXPENSES OF THE HORACE MANN MUTUAL FUNDS--There are deductions
from and expenses paid out of the assets of the Funds that are described in
the Funds' Prospectus which accompanies this Prospectus.

PREMIUM TAXES--Certain state and local governments levy a premium tax,
presently ranging from 0 to 3.5%, on the amount of Purchase Payments made
under this Contract. The premium tax, if any, is deducted either when payments
are received or when an amount is applied to provide an annuity at the
Maturity Date, depending upon the applicable law.

DEATH BENEFIT PROCEEDS
If a Contract Owner dies before the Maturity Date, the Contract value, or
the amount of Purchase Payments less any withdrawals, whichever is greater,
will be applied toward the purchase of an income payment option payable to the
beneficiary designated by the Contract Owner. The Contract value is determined
as of the date proof of death is received by HMLIC from the beneficiary. Proof
of death includes a certified death certificate and a completed claimant's
statement. The option purchased will be one elected by the Contract Owner. If
no option was elected, the beneficiary may elect an income payment option.

All or part of the death benefit proceeds may be paid to the beneficiary in
a lump sum or under one of the income payment options described under "Income
Payments-Income Payment Options." If the form of Income Payment selected
requires that payment be made by HMLIC after the death of the beneficiary,
payments will be made to a payee designated by the beneficiary or, if no
subsequent payee has been designated, to the beneficiary's estate.

13
<PAGE>

For all Contracts issued in connection with this Prospectus, if the Contract
Owner dies before Income Payments begin and the designated beneficiary is not
a surviving spouse, the IRC requires the complete distribution of proceeds by
December 31 of the calendar year of the fifth anniversary of the death; i.e.,
"the five-year rule." This requirement can be satisfied by an annuity for life
or a period certain not exceeding the life expectancy of a designated
beneficiary, provided the Income Payments begin no later than December 31 of
the calendar year following the Contract Owner's death. Any part of a Contract
Owner's interest payable to a minor child will be paid to the child's legal
guardian for the benefit of the child.

If the designated beneficiary is the Contract Owner's surviving spouse,
Income Payments may be deferred until April 1 following the calendar year in
which the Annuitant would have reached age 70 1/2. For non-qualified
annuities, a designated beneficiary which is a surviving spouse may defer
distributions until he or she reaches age 70 1/2. However, if the surviving
spouse dies before distributions begin under any non-qualified Contract issued
in connection with this Prospectus, the five-year rule and its exceptions,
explained in the preceding paragraph, will apply to his or her beneficiary.

If the Contract Owner dies on or after the Maturity Date, the remaining
portion of the interest in the Contract undistributed at the time of the
Contract Owner's death must be distributed at least as rapidly as under the
method of distribution in force at the time of the Contract Owner's death.

MANDATORY MINIMUM DISTRIBUTION
Qualified plans are subject to distribution requirements of the IRC. A
distribution must occur each calendar year once a Contract Owner reaches age
70 1/2. The Contract Owner may elect to defer the first distribution until
April 1 of the year following his or her attainment of age 70 1/2. Should the
first payment be deferred, the Contract Owner must take two distributions in
the calendar year following attainment of age 70 1/2.

Generally, the amount of the mandatory minimum distribution depends on the
Contract value and the life expectancy of the Contract Owner. Under Mandatory
Minimum Distribution requirements, distributions must be made for the life (or
lives) or a period not exceeding the life expectancy (or joint life
expectancy) of the Contract Owner (or the Contract Owner and a designated
beneficiary). To begin mandatory distributions the Contract Owner must contact
the Home Office at P. O. Box 4657, Springfield, Illinois 62708-4657.

The Internal Revenue Service has indicated that a Contract Owner who can
verify the December 31, 1986 balance in his or her Section 403(b) annuity, can
delay distribution of that amount until the end of the calendar year in which
he or she turns age 75. At that time, the December 31, 1986 balance is subject
to the minimum distribution requirements. The December 31, 1986 balance
includes deposits received and any interest earned as of December 31, 1986.
Deposits received after that date, interest on those deposits, and interest
earned on the December 31, 1986 balance are subject to the age 70 1/2
distribution requirements.

Failure to take the required distributions results in the imposition of a
penalty tax equal to one-half (50%) of the difference between what was and
what should have been distributed. In addition, income tax is due on the full
amount that should have been distributed. Further, any distribution in excess
of the mandatory minimum distribution is subject to a 20% federal income tax
withholding. See "Tax Consequences."

INCOME PAYMENTS
INCOME PAYMENT OPTIONS--The Contract provides for fixed or variable income
payment options or a combination of both. The Contract Owner may elect to have
Income Payments made under any one or more of the options described below or
may elect a lump sum payment. To begin receiving Income Payments a properly
completed request form must be received in the Home Office. The request will
be processed so that the Income Payments begin on the first of the month
following the month of receipt unless a later date is requested and approved
by the Company. If a fixed payment option is elected, the variable account
value will be transferred to the fixed account on the date the request is
received in the Home Office. In addition, if a variable payment is elected,
any money in the fixed account will be transferred to the variable account on
the date we received the request in the Home Office. Generally, at the time an
income payment option is selected, a Contract Owner must elect whether to
withhold for federal and state income taxes. See "Other Information--Forms
Availability" and "Tax Consequences."

In general, the longer Income Payments are guaranteed, the lower the amount
of each payment. Fixed Income Payments are paid in monthly, quarterly, semi-
annual & annual installments. Variable Income Payments are paid only on a
monthly basis. If the Contract value to be applied under any one fixed or
variable income payment option is less than $2,000 or if the option chosen
would provide Income Payments less than $20 per month at the Maturity Date,
then the Contract value may be paid in a lump sum.

The following income payment options are available on a variable basis
unless otherwise stated.

LIFE ANNUITY WITH OR WITHOUT CERTAIN PERIOD--The life option guarantees
Income Payments for the lifetime of the Annuitant. If a certain period is
selected (5, 10, 15 or 20 years) and the Annuitant dies before the end of the
period, Income Payments are guaranteed to the beneficiary until the end of the
period selected or the beneficiary may request the commuted value, if any, of
the remaining certain period payments. If no beneficiary is living at the time
of the Annuitant's death, the commuted value, if any, of the remaining certain
period payments will be paid in a single sum to the estate of the Annuitant.
Under the life without period certain option, it is possible that only one
Income Payment may be made if the

14
<PAGE>

Annuitant's death occurred before the due date of the second Income Payment.
This option usually provides the largest Income Payments. The Annuitant cannot
make unscheduled withdrawals or change to another option after the first
Income Payment has been made.

JOINT AND SURVIVOR LIFE ANNUITY--This life only option provides lifetime
Income Payments during the lifetimes of two Annuitants. After one annuitant
dies, the Income Payments will continue during the lifetime of the survivor in
an amount reduced to two-thirds of the monthly payments that would have been
paid had the joint lifetime of the two Annuitants continued. The Income
Payments cease after the last payment paid prior to the survivor's death. It
could be possible for only one payment to be made under this option if both
Annuitants die before the due date of the second payment. The Annuitants
cannot make unscheduled withdrawals or change to another income option after
the first Income Payment has been made.

INCOME FOR FIXED PERIOD--This option provides Income Payments for a fixed
period not less than one year nor exceeding 30 years; however, payments may
not extend beyond the life expectancy of the Annuitant. Upon the Annuitant's
death, the beneficiary will be paid the remaining Income Payments due, if any,
or the beneficiary may request the commuted value, if any, of the remaining
certain period payments. If no beneficiary is living at the time of the
Annuitant's death, the commuted value, if any, of the remaining Income
Payments will be paid in a lump sum to the estate of the Annuitant. The
Annuitant has the right to change to another income option or make unscheduled
withdrawals from the remaining commuted value subject to IRC requirements.
This option is available on a fixed payment basis only.

INCOME FOR FIXED AMOUNT--This option provides payments of a fixed amount
until the account value, with interest, has been paid; however, payments may
not extend beyond the life expectancy of the Annuitant. Upon the Annuitant's
death, the beneficiary will be paid the remaining Income Payments due, if any,
or the beneficiary may request the commuted value, if any, of the remaining
Income Payments. If no beneficiary is living at the time of the Annuitant's
death, the commuted value, if any, of the remaining Income Payments will be
paid in a lump sum to the estate of the Annuitant. The Annuitant has the right
to change to another income option or make unscheduled withdrawals from the
remaining commuted value subject to IRC requirements. This option is available
on a fixed payment basis only.

INTEREST INCOME PAYMENTS--This option provides Income Payments based on
interest earned from the proceeds of the Contract, at a rate determined by
HMLIC, but never less than the annual guaranteed interest rate. Interest will
be credited at the end of each payment period. Once the Annuitant reaches age
70 1/2, mandatory minimum distribution requirements will not allow Interest
Income Payments to continue. The Annuitant may elect another income option at
the end of any payment period, or subject to IRC requirements, may withdraw
the Contract value in whole or in part upon written request. The request must
be made prior to the end of the period that the Annuitant agreed to receive
Income Payments. See "Mandatory Minimum Distribution." This option is
available on a fixed payment basis only.

OTHER INCOME OPTIONS--If the Annuitant does not wish to elect one or more
income payment options, the Annuitant may:

a) receive the proceeds in a lump sum, or

b) leave the Contract with HMLIC and receive the value under the
mandatory minimum distribution requirements of IRC Section 401(a)(9), see
"Mandatory Minimum Distribution," or

c) elect any other option that HMLIC makes available.

AMOUNT OF FIXED AND VARIABLE INCOME PAYMENTS
In general, the dollar amount of Income Payments under the Contract depends
on Contract value. Contract value equals the value of the fixed portion of the
Contract plus the value of each subaccount. The value of each subaccount is
determined by multiplying the number of Accumulation Units credited to each
subaccount by its respective accumulation unit value, less any accumulated
asset charge. Contract value may be more or less than the amount of Net
Purchase Payments allocated to the Contract.

FIXED INCOME PAYMENTS--The amount of each payment under a fixed income
payment option is determined from the income option tables in the Contract.
These tables show the monthly payment for each $1,000 of Contract value
allocated to provide a fixed Income Payment. Guaranteed fixed Income Payments
will not change regardless of investment, mortality or expense experience.
Higher Income Payments may be made at the sole discretion of HMLIC.

VARIABLE INCOME PAYMENTS--The amount of the first monthly variable Income
Payment is determined from the income option tables in the Contract. The
tables show the amount of the Income Payment for each $1,000 of value
allocated to provide Income Payments. The income option tables vary with the
form of income option payment selected and adjusted age of the Annuitant(s).

The first monthly variable Income Payment is used to calculate the number of
variable annuity units for each subsequent monthly Income Payment. The number
of variable annuity units remains constant over the payment period except when
a joint and survivor option is chosen. The number of variable annuity units
will be reduced upon the death of either Annuitant by one-third.

The amount of monthly Income Payments following the first variable Income
Payment varies from month to month to reflect the investment experience of
each subaccount funding those payments. Income Payments are determined each
month by multiplying the variable annuity units by the applicable

15
<PAGE>

variable annuity unit value at the date of payment. The variable annuity unit
value will change between Valuation Dates to reflect the investment experience
of each subaccount.

ASSUMED INTEREST RATE--The selection of an assumed interest rate affects
both the first monthly variable Income Payment and the pattern of subsequent
payments. The sum of the assumed interest rate and the mortality and expense
risk charge, adjusted to a monthly rate, is the investment multiplier. If the
investment performance of a subaccount funding variable Income Payments is the
same as the investment multiplier, the monthly payments will remain level. If
its investment performance exceeds the investment multiplier, the monthly
payments will increase. Conversely, if investment performance is less than the
investment multiplier, the payments will decrease. Unless otherwise provided,
the assumed interest rate is 4.0% per annum.

ANNUITY UNIT VALUE--The variable annuity unit value for the Growth,
Balanced, and Income Funds was set at $10.00 as of the date amounts first were
allocated to provide Income Payments. The variable annuity unit value for the
Small Cap Growth Fund, International Equity Fund, Socially Responsible Fund
and Short-Term Fund also has been set at $10.00, however, no Income Payments
have been paid from these subaccounts. The current variable annuity unit value
is equal to the prior variable annuity unit value on the Valuation Date when
payments were last determined, multiplied by the applicable net investment
factor. The net investment factor reflects the investment performance of the
subaccount during the current month plus the value of any dividends and
distributions during the current month. This factor is computed by dividing
the net asset value of a share of the underlying Fund on the last business day
of the current month, plus any dividends or other distributions, by the net
asset value of a share on the last business day of the preceding month, and
dividing this result by the sum of one plus the investment multiplier (or
multiplying this result by .995666).

MISSTATEMENT OF AGE
If the age of the Annuitant has been misstated, any Income Payment amount
shall be adjusted to reflect the correct age. If the Income Payments were too
large because of a misstatement of age, HMLIC will deduct the difference with
interest, at an effective annual interest rate of 6%, from future payments
until totally repaid. If the Income Payments were too small, HMLIC will add
the difference with interest, at an effective annual interest rate of 6%, to
the next payment.

MODIFICATION OF THE CONTRACT
The Contract provides that it may be modified by HMLIC to maintain continued
compliance with applicable state and federal laws. Contract Owners will be
notified of any modification. Only officers designated by HMLIC may modify the
terms of the Contract.

HMLIC reserves the right to offer Contract Owners, at some future date and
in accordance with the requirements of the Investment Company Act of 1940, the
option to direct that their Purchase Payments be allocated to a registered,
open-end, diversified, management investment company ("mutual fund") other
than one or more of the seven currently offered Horace Mann Mutual Funds. If
shares of a Horace Mann Mutual Fund are not available for purchase by the
Account, or if in the judgment of HMLIC further investment in these shares is
no longer appropriate in view of the purposes of the Account or subaccount,
then (i) shares of another mutual fund may be substituted for existing Fund
shares held in the affected subaccount and/or (ii) payments received after a
date specified by HMLIC may be applied to the purchase of shares of another
mutual fund. No substitution will be made without prior approval of the
Securities and Exchange Commission. Any substitution would be for shares of a
mutual fund with investment objectives similar to those of the Fund it
replaces.

TAX CONSEQUENCES

SEPARATE ACCOUNT
The operations of the Account form part of the operations of HMLIC; however,
the IRC provides that no federal income tax will be payable by HMLIC on the
investment income and capital gains of the Account if certain conditions are
met. Provided the investments of the underlying Funds continue to meet the
diversification requirements of IRC Section 817(h), the Contract Owner will
not pay federal income tax on the investment income and capital gains under a
Contract until Income Payments begin or a full or partial withdrawal is made.

CONTRACT OWNERS
CONTRIBUTIONS--Under IRC Section 403(b), Purchase Payments made by public
school systems, churches, or certain tax-exempt organizations to purchase
annuities for their employees are excludable from the gross income of the
employee to the extent that aggregate Purchase Payments for the employee do
not exceed certain limitations imposed by the IRC. Further, any amounts
credited to the Contract Owner's account are not taxable until such amounts
are distributed. If the Contract is used for a tax-sheltered annuity described
in IRC Section 403(b) or a simplified employee pension plan described in IRC
Section 408(k) or ("qualified plans"), contributions made by an employer
through a salary reduction plan are permitted up to prescribed limits.

Generally, IRC Section 403(b) imposes a limitation on the amount of tax-
deferred Purchase Payments that may be made in a calendar year equal to 20% of
an employee's compensation includable in gross income for that year.
Adjustments to this limitation are made based upon the Contract Owner's years
of service with his or her employer and take into account the Contract Owner's
prior and current contributions to qualified plans. The Section 403(b)
limitation also is adjusted for any amounts deferred in prior taxable years
under an eligible deferred compensation plan as defined by IRC Section 457. In
addition, IRC Section 415 imposes a 25% limitation on total pre-tax
contributions to all tax-qualified plans. No limitations

16
<PAGE>

are imposed on the amount of contributions made to a non-qualified contract.

If the Contract is used as an IRA, subject to certain limitations, all or a
portion of the contribution up to $2,000 ($4,000 for a spousal IRA) may be
deducted from gross income. Contributions to a simplified employee pension
plan Contract generally may not exceed 15% of compensation or $30,000,
whichever is less. Until a taxable distribution occurs, no federal income tax
is payable by the Contract Owner on Purchase Payments and investment earnings
of a Contract purchased for a qualified plan or an IRA.

Effective January 1, 1989, the IRC imposes restrictions on distributions
(i.e., partial withdrawals or surrenders) from annuity contracts qualified
under IRC Section 403(b). IRC Section 403(b)(11) requires that for these
annuity contracts to receive tax-deferred treatment, the following
distribution restrictions must be applied to contributions and all earnings
credited after December 31, 1988.

Distributions may be paid only:

(1) When the employee attains age 59 1/2, separates from service, dies,
or becomes disabled (within the meaning of IRC Section 72(m)(7)), or

(2) In hardship cases and cannot exceed contributions made through a
salary reduction agreement. Distribution of any income attributable to
these contributions is prohibited.

DISTRIBUTIONS UNDER QUALIFIED CONTRACTS--The IRC subjects qualified plans to
certain mandatory minimum distribution requirements. See "The Contract--
Mandatory Minimum Distribution."

If certain requirements are met, full or partial distributions other than
mandatory minimum distributions, either may be rolled over or exchanged on a
tax-free basis from one plan to another in accordance with IRC Section 1035 or
Revenue Ruling 90-24. See "The Contract--Mandatory Minimum Distribution."
Distributions from an IRC Section 403(b) Contract may be rolled over to
another IRC Section 403(b) Contract or to an IRA. Distributions from an IRA
may be rolled over to another IRA or to an IRC Section 403(b) Contract if the
IRA contains only amounts rolled over from a 403(b) plan.

Effective January 1, 1993, federal tax law requires HMLIC to withhold for
ordinary income tax purposes, 20% of any distributions from annuity Contracts
or plans qualified under IRC Section 403 with the exception of the following:

(1) eligible rollover distributions made directly to another trustee,

(2) periodic payments received over the Contract Owner's lifetime,

(3) periodic payments received under the minimum required distribution
rules, or

(4) periodic payments received over a period of ten years or more.

The Contract Owner, after receiving a distribution that is subject to the
20% withholding tax, may elect to rollover the distribution within 60 days of
receiving it. However, in order to qualify the entire distribution as a
rollover, the Contract Owner must replace the 20% withheld when making the
rollover payment. If the 20% is not replaced, the amount withheld will be
subject to ordinary income taxes and a possible 10% tax penalty if the
distribution occurred before age 59 1/2.

All distributions, with the exception of a return of nondeductible employee
contributions, received from a qualified plan or an IRA are includable in
gross income in the year paid. Once Income Payments begin, any nondeductible
contributions are recovered tax-free as a portion of each Income Payment.
Under certain limited circumstances, an individual may elect forward averaging
with respect to a lump sum distribution.

For any distribution not subject to the 20% withholding, HMLIC is required
to withhold federal income tax unless the Contract Owner elects not to have
federal income tax withheld. After an election is made with respect to Income
Payments, a Contract Owner may revoke the election at any time. HMLIC will
notify the Contract Owner at least annually of his or her right to revoke the
election. Contract Owners are required by law to provide their correct
taxpayer identification numbers ("TIN") to HMLIC. If the Contract Owner is an
individual, the TIN is his or her Social Security number.

If the designated beneficiary is not the Contract Owner's spouse, then at
least 50% of the present value of the amount available for distribution must
be paid within the life expectancy of the Contract Owner of an IRA or a
qualified plan. Each payment to the beneficiary must be no less than each
payment to the Contract Owner.

DISTRIBUTIONS UNDER NON-QUALIFIED CONTRACTS--Contract Owners of non-
qualified Contracts are not subject to federal income tax on earnings until
Income Payments are received under the Contract.

A distribution by surrender or partial withdrawal during the accumulation
period may subject the Contract Owner to federal income tax. For this purpose,
an assignment or pledge (or agreement to assign or pledge) is considered a
distribution.

If the distribution is a full surrender, the Contract Owner is taxed on the
amount distributed, less Purchase Payments reduced by any prior partial
withdrawals which were not subject to income tax.

A distribution by partial withdrawal is deemed to come first from any
previously untaxed accumulation and then from principal. The Contract Owner is
subject to income tax on any previously untaxed accumulation which is
distributed.

Purchase Payments may be made by means of a full or partial tax free
exchange of annuity contracts under IRC Section

17
<PAGE>

1035. Contracts exchanged under IRC Section 1035 after January 18, 1985 will
be subject to the annuity income tax rules of IRC Section 72 in effect after
that date, with exceptions set forth below regarding the first-in first-out
treatment of contracts issued prior to August 14, 1982. See below "Penalty
Tax."

If distributions are made pursuant to an income payment option, that portion
of each Income Payment which represents the Contract Owner's investment in the
Contract is excluded from gross income for federal income tax purposes. The
"investment in the Contract" is equal to total Purchase Payments to the
Contract less the portion of any periodic distributions that were excluded
from the individual's gross income. Once the Contract Owner's investment is
returned in full, the entire amount of each Income Payment is taxable as
ordinary income.

PENALTY TAX--Distributions to a Contract Owner under a qualified plan or IRA
are subject to a 10% penalty tax unless the distributions are received:

(1) on or after age 59 1/2,

(2) on account of death,

(3) on account of disability, as defined in IRC Section 72(m)(7),

(4) pursuant to a qualified domestic relations order, as defined in IRC
414(p),

(5) for deductible medical expenses in excess of 7 1/2% of adjusted gross
income,

(6) on account of separation from service after age 55, or

(7) as a series of substantially equal payments for the life or a period
not exceeding life expectancy of the Contract Owner, or the lives or a
period not exceeding the joint life expectancy of the Contract Owner and a
designated beneficiary.

Taxable distributions from non-qualified Contracts received prior to age 59
1/2 are also subject to a 10% penalty tax unless the distribution is made
after the Contract Owner's death or disability, received as part of
substantially equal periodic payments for the Contract Owner's lifetime, or
attributable to Purchase Payments made prior to August 14, 1982. In addition,
for non-qualified Contracts issued during the period August 14, 1982 through
January 18, 1985 and for additional Purchase Payments to non-qualified
Contracts issued prior to August 14, 1982, the penalty tax will not apply to
distributions attributable to Purchase Payments paid ten years or more prior
to the distribution. For this purpose, distributions will be attributed to
Purchase Payments on a "first-in first-out" basis (i.e. to the earliest
Purchase Payment which has not been fully allocated to prior distributions.)

The preceding discussion is informational only and is not to be considered
tax advice. Contract Owners are urged to consult a competent tax adviser
before taking any action that could have tax consequences.

VOTING RIGHTS

Unless otherwise restricted by the plan under which a Contract is issued,
each Contract Owner has the right to instruct HMLIC with respect to voting his
or her interest in the shares of the Funds held by the Separate Account at all
shareholder meetings.

The number of votes that may be cast by a Contract Owner is based on the
number of units owned as of the record date of the meeting. Shares for which
no instructions are received are voted in the same proportion as the shares
for which instructions have been received. Any Fund shares attributable to
investment by HMLIC will be voted in proportion to the vote by Contract Owners
who have Separate Account units. Contract Owners receive various materials,
such as proxy materials and voting instruction forms, that relate to voting
Fund shares.

OTHER INFORMATION

LEGAL PROCEEDINGS--There are no legal proceedings to which the Separate
Account is a party or to which the assets of the Separate Account are subject.
HMLIC is engaged in various kinds of routine litigation that, in HMLIC's
judgment, are not material to its financial condition. None of this litigation
relates to the Separate Account.

REGISTRATION STATEMENT--A registration statement has been filed with the
Securities and Exchange Commission under the Securities Act of 1933 with
respect to the Contract. This Prospectus does not contain all information set
forth in the registration statement, its amendments and exhibits. Statements
contained in this Prospectus as to the content of the Contract and other legal
instruments are summaries. For a complete statement of the terms thereof,
reference is made to these instruments as filed.

CONTRACT OWNER COMMUNICATIONS--To ensure receipt of communications, Contract
Owners must notify HMLIC of address changes. Notice of a change in address may
be sent to Horace Mann Life Insurance Company, Annuity Customer Service, P.O.
Box 4657, Springfield, Illinois 62708-4657. Contract Owners may also provide
notice of an address change by sending a telefacsimile (FAX) transmission to
(217) 527-2307 or by calling (217) 789-2500 or (800) 999-1030 (toll free).

HMLIC will attempt to locate Contract Owners for whom no current address is
on file. In the event HMLIC is unable to locate a Contract Owner, HMLIC may be
forced to surrender the value of the Contract to the Contract Owner's last
known state of residence in accordance with the state's abandoned property
laws.

CONTRACT OWNER INQUIRIES--A toll free number, (800) 999-1030, is available
to telephone HMLIC's Annuity Customer

18
<PAGE>

- -------------------------------------------------------------------------------
- -----
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ---------
Service Department. Written questions should be sent to Horace Mann Life
Insurance Company, Annuity Customer Service, P.O. Box 4657, Springfield,
Illinois 62708-4657.

FORMS AVAILABILITY--Specific forms are available from HMLIC to aid the
Contract Owner in effecting many transactions allowed under the Contract. These
forms may be obtained by calling the Annuity Customer Service Department toll
free at (800) 999-1030.

ADDITIONAL INFORMATION

A copy of the Statement of Additional Information providing more detailed
information about the Account is available, without charge, upon request. The
Table of Contents of this Statement follows:

<TABLE>
<CAPTION>
TOPIC PAGE
- ----- ----
<S> <C>
General Information and History........................................... 2
Investment Experience..................................................... 2
Underwriter............................................................... 3
Financial Statements...................................................... 3
</TABLE>
To receive, without charge, a copy of the 1996 Annual Report of the Horace
Mann Family of Funds and the Horace Mann Life Insurance Company Separate
Account and/or a copy of the Statement of Additional Information for Horace
Mann Life Insurance Company Separate Account and/or the Horace Mann Mutual
Funds, please complete the following request form and mail it to the address
indicated below, or send it by telefacsimile (FAX) transmission to (217) 527-
2307 or telephone (217) 789-2500 or (800) 999-1030 (toll-free).

HORACE MANN LIFE INSURANCE COMPANY
P.O. BOX 4657
SPRINGFIELD, ILLINOIS 62708-4657

Please provide free of charge the following information:

1996 Annual Report of the Horace Mann Family of Funds and the Horace Mann Life
Insurance Company Separate Account.

Statement of Additional Information dated May 1, 1997 for the Horace Mann
Mutual Funds.

Statement of Additional Information dated May 1, 1997 for the Horace Mann Life
Insurance Company Separate Account.

Please mail the above documents to:
------------------------------
(Name)
------------------------------
(Address)
------------------------------
(City/State/Zip)

19
<PAGE>

Statement of Additional Information

Variable tax deferred annuity contracts
Qualified and non-qualified plans

Horace Mann Life Insurance Company
Separate Account

May 1, 1997
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

___________________________

HORACE MANN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT

___________________________

Individual and Group
Flexible Payment and Individual Single Payment Variable Tax
Deferred Annuity Contracts

___________________________

Horace Mann Life Insurance Company

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the Prospectus, dated May 1, 1997, for Horace Mann Life
Insurance Company Separate Account. A copy of the Prospectus may be obtained by
writing to Horace Mann Life Insurance Company, P.O. Box 4657, Springfield,
Illinois 62708-4657, by sending a telefacsimile (FAX) transmission to (217) 527-
2307, or by telephoning toll-free (800) 999-1030.

May 1, 1997

TABLE OF CONTENTS

Topic Page
- ----- ----

General Information and History................................ 2
Investment Experience.......................................... 2
Underwriter.................................................... 3
Financial Statements........................................... 4

1
<PAGE>

GENERAL INFORMATION AND HISTORY

Horace Mann Life Insurance Company ("HMLIC") sponsors the Horace Mann Life
Insurance Company Separate Account (the "Account"). HMLIC is an indirect
wholly-owned subsidiary of Horace Mann Educators Corporation ("HMEC"), a
publicly-held insurance holding company traded on the New York Stock Exchange.

INVESTMENT EXPERIENCE
(Applies to Annuity Alternative Contracts Only)

December 31, 1996

TOTAL RETURN DATA

ACTUAL PERFORMANCE/1/
(Based on a $1,000 -------------------------
investment)/2/ 1 YR 5 YRS 10 YRS
-------------------------
<S> <C> <C> <C>
Growth Fund Account Division
With Redemption/3/ 15.33% 15.53% 13.46%
Without Redemption 23.88% 15.53% 13.46%
Balanced Fund Account Division
With Redemption/3/ 8.36% 11.79% 10.65%
Without Redemption 16.86% 11.79% 10.65%
Income Fund Account Division
With Redemption/3/ (6.01)% 4.77% 6.10%
Without Redemption 2.17% 4.77% 6.10%
Short-Term Fund Account Division
With Redemption/3/ (4.63)% 2.62% 4.08%
Without Redemption 3.66% 2.62% 4.08%

</TABLE>

- -----------
/1/In some cases, actual performance reflects subsidization where total return
has been enhanced due to expenses of each Fund being waived or paid by
affiliates of the Funds.

/2/The performance shown above is reduced by the $25 annual maintenance charge
as a percentage 0.12% of the average contract value as of December 31,
1996.

/3/With redemption reflects performance of a surrendered contract. Redemption
has no effect on return after the initial five-year contract period.

Because the Small Cap Growth Fund, International Equity Fund and Socially
Responsible Fund each commenced operations on March 10, 1997, their performance
has not been included. This performance data represents past performance.
Investment return and the principal value of an investment may fluctuate. An
investor's shares, when redeemed, may be worth more or less than their original
cost. All charges as shown in the Prospectus fee tables are reflected in this
data, with the exception of premium taxes.

The total return quotations are based on the average annual compounded rates of
return over one, five, and ten year periods ended December 31, 1996. Total
return is computed by finding the average annual compounded rates of return that
would equate the initial amount invested to the ending redeemable value.

The performance data contained in this Statement of Additional Information is
based on the fees and charges for the flexible payment Contracts currently
offered by the Company. Prior Contracts have different fees and charges;
therefore these performance calculations are not valid for those contracts.

2
<PAGE>

UNDERWRITER

HMLIC offers and sells the Contract on a continuous basis through its licensed
life insurance sales personnel who are also registered representatives of Horace
Mann Investors, Inc. ("Investors"), a broker/dealer registered with the
Securities and Exchange Commission and a member of the National Association of
Securities Dealers, Inc. (NASD). HMLIC contracts with Investors, principal
underwriter of the Account, to distribute the variable contracts of HMLIC.
Investors, located at One Horace Mann Plaza, Springfield, Illinois 62715-0001,
is an affiliate of HMLIC and a wholly-owned subsidiary of HMEC.

Commissions paid to Investors were $2,019,137, $2,657,025 and $3,879,547 for the
years ended 1994, 1995 and 1996, respectively. Investors does not retain any of
these commissions. Commissions received by Investors are paid to registered
representatives who sell contracts offered by this Prospectus.

FINANCIAL STATEMENTS

KPMG Peat Marwick LLP, independent auditors for the Account and HMLIC, has
offices at 303 East Wacker Drive, Chicago, Illinois 60601. KPMG Peat Marwick LLP
representatives perform an audit of the financial statements of the Account
annually and provide accounting advice and services related to Securities and
Exchange Commission filings throughout the year and perform an annual audit of
the statutory financial statements of HMLIC.

The financial statements of the Account, including the auditors' reports
thereon, are incorporated herein by reference from the Annual Report for the
Account for the year ended December 31, 1996. A copy of this Annual Report
accompanied or preceded the delivery of the Prospectus. Additional copies may
be obtained, upon request and without charge, by contacting Horace Mann Life
Insurance Company, P.O. Box 4657, Springfield, Illinois 62708-4657, or by
telephoning (217) 789-2500 or (800) 999-1030 (toll-free). The statutory
financial statements for HMLIC, including the auditors' reports thereon, which
are included herein, should be considered only as bearing upon the ability of
HMLIC to meet its obligations under the Contracts.

<PAGE>

HORACE MANN LIFE INSURANCE COMPANY

Statutory Financial Statements

December 31, 1996 and 1995