MANN HORACE LIFE INSURANCE CO SEPARATE ACCOUNT, 485APOS, 1999-03-02

MANN HORACE LIFE INSURANCE CO SEPARATE ACCOUNT
485APOS, 1999-03-02

Previous: WISCONSIN PUBLIC SERVICE CORP, 8-K/A, 1999-03-02

Next: ARTRA GROUP INC, 8-K, 1999-03-02

As filed with the Securities and Exchange Commission on March 2, 1999

File Nos. 2-24256
811-1343

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4
------------------------------

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 64
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
------------------------------

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT
---------------------------------------------------
(Exact Name of Registrant)

Horace Mann Life Insurance Company
----------------------------------
(Name of Depositor)

One Horace Mann Plaza, Springfield, Illinois 62715
---------------------------------------------------
(Address of Depositor's Principal Executive Offices)

(217) 789-2500
--------------
(Depositor's Telephone Number)

Ann M. Caparros
One Horace Mann Plaza
Springfield, Illinois 62715
----------------------------
(Name and Address of Agent for Service)

Copies of Communications to:

Cathy G. O'Kelly
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601-1003
---------------------------------

It is proposed that this filing will become effective:

___Immediately upon filing pursuant to paragraph (b) of Rule 485
_ _On May 1, 1999 pursuant to paragraph (b) of Rule 485
___60 days after filing pursuant to paragraph (a)(1) of Rule 485
_X_On May 1, 1999 pursuant to paragraph (a)(1) of Rule 485
___75 days after filing pursuant to paragraph (a)(2) of Rule 485
___On (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

___this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1999

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 Mortality and Expense Risk Fee ("M&E Fee") described in the
Prospectus, a fee is deducted from all distributions paid by the Growth Fund to
the Account or, if the fee is accrued and unpaid, from the value of a
Participant's individual account upon withdrawal or transfer from the Account.
This fee 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

<PAGE>

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 M&E Fee, as a percentage of average account value:
Mortality Risk .................................................... 0.31%
Expense Risk ...................................................... 0.08%
Total Separate Account Annual M&E Fee.............................. 0.39%
Annual Operating Expenses of Growth Fund,(/2/) as a percentage of average net
assets for the December 31, 1997 fiscal year:
Management Fees.................................................... 0.642%
Other Expenses..................................................... 0.185%
Total Growth Fund Operating Expenses............................... 0.827%

<PAGE>

EXAMPLE(/3/)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------

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:.................................. $72 $97 $123 $199
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $72 $97 $123 $199

(/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 1997 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, 1999.

<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1999

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 Mortality and Expense Risk Fee ("M&E Fee") described in the
Prospectus, a fee is deducted from distributions paid by the Growth Fund to the
Account or, if the fee is accrued and unpaid, from the value of a Contract
Owner's individual account upon withdrawal or transfer from the Account. This
fee 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
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 M&E Fee, as a percentage of average account value:
Mortality Risk............................................ 0.31%
Expense Risk ............................................. 0.08%

<PAGE>

Total Separate Account Annual M&E Fee.............................. 0.39%
Annual Operating Expenses of Growth Fund,(/2/) as a
percentage of average net assets for the December 31, 1997
fiscal year:
Management Fees.................................................... 0.642%
Other Expenses..................................................... 0.185%
Total Growth Fund Operating Expenses............................... 0.827%

<PAGE>

EXAMPLE(/3/)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
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:................................... $72 $97 $123 $199
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 $97 $123 $199

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

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

The date of this Supplement is May 1, 1999.

<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1999

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 the Growth Fund. There is no annual
maintenance charge or transfer charge.

5. In lieu of the Mortality and Expense Risk Fee ("M&E Fee") described in the
Prospectus, a fee for mortality and expense risk, computed weekly at the

<PAGE>

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
the 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
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 M&E Fee, as a percentage of total net assets:
Mortality Risk.................................................... 0.24%
Expense Risk...................................................... 0.05%
Total Separate Account Annual M&E Fee............................. 0.29%

Annual Operating Expenses of Growth Fund,(/2/) as a percentage of average net
assets for the December 31, 1996 fiscal year:
Management Fees................................................... 0.642%
Other Expenses.................................................... 0.185%
Total Growth Fund Operating Expenses.............................. 0.827%

<PAGE>

EXAMPLE(/3/)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
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:.................................. $81 $103 $128 $197
If you do not surrender your Contract:
You would pay the following expenses on a
$1,000 investment, assuming 5% annual return
on assets:.................................. $81 $103 $128 $197

(/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 1997 calendar
year. Actual expenses may be greater or less than those shown.

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

The date of this Supplement is May 1, 1999.

<PAGE>

SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1999

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 the Growth
Fund. There is no annual maintenance charge or transfer charge.

2. In lieu of the Mortality and Expense Risk Fee ("M&E Fee") described in the
Prospectus, a fee for mortality and expense risk, 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 the
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
Contract Owner Transaction Expenses,(/1/) as a percentage of

<PAGE>

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 M&E Fee, as a percentage of total net assets:
Mortality Risk...................................................... 0.24%
Expense Risk........................................................ 0.05%
Total Separate Account Annual M&E Fee............................... 0.29%
Annual Operating Expenses of Growth Fund,(/2/) as a percentage of average net
assets for the December 31, 1997 fiscal year:
Management Fees..................................................... 0.642%
Other Expenses...................................................... 0.185%
Total Growth Fund Operating Expenses................................ 0.827%

EXAMPLE(/3/)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- ------- --------
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:............................ $81 $103 $128 $197
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:............................ $81 $103 $128 $197

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

<PAGE>

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

The date of this Supplement is May 1, 1999.

<PAGE>

Prospectus

Variable Tax deferred annuity contracts
Qualified and non-qualified plans

Horace Mann Life Insurance Company
Separate Account
May 1, 1999

<PAGE>

Individual Single Premium and Individual and Group Flexible Premium
Variable Deferred Annuity Contracts Issued By
Horace Mann Life Insurance Company Separate Account

This Prospectus offers combination fixed and variable annuity contracts to
individualsand groups. These contracts are issued by Horace Mann Life Insurance
Company ("HMLIC") and can be issued as flexible premium contracts or, for
individuals, as single premium contracts. They are issued 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 purchases shares in a corresponding portfolio of the Horace Mann
Mutual Funds. The Horace Mann Mutual Funds are a registered investment company.
They consist of:

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

Horace Mann Balanced Fund -- a fund investing directly or indirectly in a mix
of common stocks, debt securities and money
market instruments.

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

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

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 primarily in
marketable equity securities of United Stateschartered companies which are
determined to be socially responsible pursuant to criteria set forth in the
funds Prospectus.

This Prospectus sets forth the information an investor should know . Additional
Information about the H M L I C Separate Account has been filed with the
Securities and Exchange Commission in a Statement of Additional Information,
dated May 1, 1999. The Statement of Additional information is incorporated by
reference and is available upon request, without charge. You may obtain the
Statement of Additional Information by writing to Horace Mann Life Insurance
Company, P.O. Box 4657, Springfield, Illinois 62708-4657, by sending a
telefacsimile (FAX) transmission to (217) 535-7123, 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 of this Prospectus.

THIS PROSPECTUS IS ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUNDS.* Please
read these documents carefully and keep them for future reference.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.

The annuities offered by HMLIC are not insured by the FDIC or any other
government agency. They are not deposits, obligations, or guaranteed by any
bank. They involve investment risks, including the possible loss of principal
amount invested.

The date of this Prospectus is May 1, 1999.

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

Topic Page

Definitions.........................................................
Summary.............................................................
Condensed Financial Information.....................................
Horace Mann Life Insurance Company, The Account
And The Horace Mann Funds.........................................
Horace Mann Life Insurance Company.............................
The Account....................................................
The Horace Mann Mutual Funds...................................
Administration.................................................
The Contract........................................................
Contract Owners Rights.........................................
Purchasing the Contract........................................
Purchase Payments..............................................
Amount and Frequency of Purchase Payments..................
Allocation of Purchase Payments............................
Accumulation Units and Accumulation Unit Value.............
Transactions...................................................
Transfers..................................................
Changes in Allocation Instructions.........................
Surrender Before Commencement of Annuity Period............
Deferment..................................................
Confirmations..............................................
Deductions and Expenses........................................
Annual Maintenance Charge..................................
Asset Charge for Mortality, Expense
and Distribution Expense Risks..............................
Operating Expenses of the Horace Mann Fund.................
Premium Taxes.............................................
Death Benefit Proceeds.........................................
Mandatory Minimum Distribution.................................
Income Payments................................................
Income Payment Options.....................................
Amount of Fixed and Variable Income Payments...............
Misstatement of Age............................................
Modification of the Contract...................................
Tax Consequences....................................................
Separate Account...............................................
Contract Owners................................................
Contributions...............................................
Distributions Under Qualified Contracts.....................
Distributions Under Non-Qualified Contracts.................
Penalty Tax.................................................

Voting Rights.......................................................
Other Information...................................................
Additional Information..............................................

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.
<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 Mutual 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 a 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 premium Contracts and to both individuals and
groups as flexible premium 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 ("Trust") consist of seven portfolios:
Growth Fund, Balanced Fund, Income Fund, Short-Term Investment Fund ("Short-Term
Fund"), Small Cap Growth Fund, International Equity Fund and Socially
Responsible Fund. The Trust 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
guaranteed 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.
<PAGE>
Purchase Payment: An amount paid to Horace Mann Life Insurance Company 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("IRC"). IRAs as defined in Section 408 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 and for 1999 no
valuations are made for the day after Thanksgiving.

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.
<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 value varies based on the investment performance of the subaccount
selected . 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 the HMLIC Separate Account
Prospectus. Additional information about the Funds can be found in the Fund's
Statement of Additional Information. The Fund's' expenses, including advisory
and management fees, are found in the Table of Annual Operating Expenses shown
on page____of this Summary.

What is "the Separate Account"?
The Horace Mann Life Insurance Company Separate Account (the "Account")
segregates 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 in
shares of the corresponding portfolio of the Horace Mann Mutual Funds; Growth
Fund, Balanced Fund, Income Fund, Short-Term Investment Fund, Small Cap Growth
Fund, International Equity Fund, and Socially Responsible 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 premium annuity. Individuals may also purchase the single premium plan.
The Contracts offered by this Prospectusare designed to provide retirement
benefits in connection with Section 403(b) Annuities, Individual Retirement
annuities ("IRAs"), Roth IRA's, 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. These insurance sales personnel are registered representatives
of Horace Mann Investors, Inc. ("Investors"). Horace Mann Investors is a
broker/dealer registered under the Securities and Exchange Act of 1934. HMLIC
has entered into a distribution agreement with Investors. 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 premium Contract during any
Contract Year is $225. Certain Individual Flexible Premium contracts may have
larger minimums. The minimum Purchase Payment under a single premium Contract is
$2,000. 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. No Purchase Payments are required after
the first Contract Year. Under certain group plans the minimum may be reduced or
eliminated.

What are my investment choices?

(a) Separate Account
Includes seven Subaccounts each of which invests in one of the following
funds:

Growth Fund - a fund investing primarily in common stocks of domestic
companies.

Balanced Fund - a fund investing directly or indirectly in a mix of common
stocks, debt securities and money market instruments.

Income Fund - a fund investing primarily in investment grade debt securities.

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

Small Cap Growth Fund - a fund investing primarily in small cap equity
securities with earnings growth potential.
<PAGE>
International Equity Fund - a fund investing in marketable foreign equity
securities.

Socially Responsible Fund - a fund investing primarily in marketable equity
securities of United States chartered companies which are determined to be
socially responsible pursuant to criteria set forth in the Funds prospectus.

(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 account 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 and the early withdrawal penalty is waived.
If an amount transferred from the fixed account is surrendered within 365 days,
the amount transferred will be subject to the applicable surrender and
withdrawal penalties as if the money had been withdrawn from the fixed account.
The penalty will not be charged if (1) the transfer occurred on a Scheduled
Update (renewal date) or (2) if the Scheduled update occurred between the
transfer and withdrawal or surrender date(s)). 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 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 ____in this
Prospectus.

What are the charges or deductions?
Contracts may be subject to deductions for applicable state or local government
premium taxes. Premium taxes presently range from 0 to 3.5%.

A mortality and expense risk fee(M&E Fee), computed and accrued weekly, is
deducted from the account value. This fee will not exceed 1.25% of the Contract
Owner's average value in a Subaccount on an annual basis but may be lower on
some group plans and certain individual flexible premium products.

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. This charge may be waived or lowered on certain
group plans. Certain individual flexible premium products do not include this
charge.

No deduction for sales expense is charged on Purchase Payments, but a
decreasing surrender charge is assessed against certain withdrawals and
surrenders during the first five contract years. The charge may be lower on
certain individual and group plans. In the first Contract Year the charge is 8%
for the Flexible Premium Contract and 5% for the Single Premium Contract.
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 Purchases Payments to the Subaccount(s). See "The Contract--Transactions--
Surrender Before Commencement of Annuity Period."

What are the federal income consequence 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. The market
value of the assets purchased by payments paid to the Account, less any taxes,
if applicable, will be refunded.

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 if the total Contract value is less than $2,000 or if monthly Income
Payments
<PAGE>
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.
<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
Contract Owner Transaction Expenses:1
Maximum Surrender Charge as a percentage of redemption proceeds2
- for Single Premium Contracts.............................5.00%
- for Flexible Premium Contracts...........................8.00%

Annual Maintenance Charge3...........................................$25

Separate Account M&E Fee, as a percentage of average account value:
Mortality Risk ..................................................0.45%
Expense Risk ....................................................0.80%
Total Separate Account M&E Fee......................................1.25%

Horace Mann Mutual Funds
Annual Operating Expenses of the Horace Mann Funds, as a percentage of average
daily net assets :
<TABLE>
<CAPTION>
Small Cap5 International5 Socially
Growth4,6 Balanced4,6 Income4 Short-Term5 growth Equity Responsible 5
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees7 0.642 0.642 0.642 0.367 1.392 1.092 0.942

Other Expenses: 0.185 0.186 0.570 2.397 0.530 1.148 0.377
----- ----- ----- ----- ----- ----- -----
Total Fund Operating 0.827 0.828 1.212 2.764 1.922 2.240 1.319
Expense
</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. This charge may be reduced or eliminated
on certain individual contracts and group plans.

4 The Other Expenses are shown based on actual amounts for the fiscal year ended
December 31, 1998, with the addition of the support services fees which were not
instituted until March 1, 1999.

5 The Other Expenses are shown based on actual amounts for the fiscal year ended
December 31, 1998, with the addition of the support services fees, which were
not instituted until Marhc 1, 1999. . Horace Mann Investors, Inc. voluntarily
waived a portion of its Management Fee and reimburse certain expenses during
1998. With such reimbursement, the Management Fee, Other Expenses and Total Fund
Operating Expenses, respectively, would have been: 0.267%, 0.465% and 0.832% for
the Short-Term Investment Fund; 1.392%, 0.282% and 1.674% for the Small Cap
Growth Fund;1.092%, 0.547% and 1.639% for the International Equity Fund; and
0.942%, 0.282% and1.224% for the Socially Responsible Fund. See the "Investment
Advisory Agreement" and "Other Services" section of the Horace Mann Mutual Funds
Prospectus for a description of the contractual fee rates.
<PAGE>
6 Commission Credits- The subadvisors for the Growth and Balanced Funds seek the
best price and execution on each transaction and negotiates commission rates
solely on the execution requirements of each trade. Occasionally, they place,
under a directed brokerage arrangement, common stock trades with a broker/dealer
who credits to the Funds part of the commissions paid. With such commissions
credits the Other Expenses and Total Fund Operating Expenses, respectively,
actually were: 0.167% and 0.809% for the Growth Fund and 0.171% and 0.813% for
the Balanced Fund. 7The "Management Fees" include both the advisory fee payable
to Wilshire Associates, Inc. and the administration fee payable to Horace Mann
Investors, Inc.
<TABLE>
<CAPTION>
EXAMPLE1

Small Cap Socially
Growth Balanced Income Short-Term Growth International Responsible
Fund Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
FOR FLEXIBLE PREMIUM 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 ........................ 104 104 108 122 114 117 109
3 years ....................... 133 133 144 186 163 172 147
5 years ....................... 116 116 135 209 170 185 140
10 years ....................... 249 249 287 428 355 383 298
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 ........................ 22 22 26 41 33 36 27
3 years ....................... 67 67 79 124 100 109 82
5 years ....................... 116 116 135 209 170 185 140
10 years ....................... 249 249 287 428 355 383 298

FOR SINGLE PREMIUM 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 ........................ 73 73 77 92 84 87 78
3 years ....................... 100 100 111 155 132 141 114
5 years ....................... 116 116 135 209 170 185 140
10 years ....................... 249 249 287 428 355 383 298
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 ........................ 22 22 26 41 33 36 27
3 years ....................... 67 67 79 124 100 109 82
5 years ....................... 116 116 135 209 170 185 140
10 years ....................... 249 249 287 428 355 383 298
</TABLE>

1 The EXAMPLE should not be considered a representation of past or future
expenses. Amounts shown are based on the "Total Fund Operating Expenses" shown
in the fee table and average cash value of annuity Contracts in the accumulation
phase during the 1998 calendar year. Therefore, no maintenance fee has been
deducted. Actual expenses may be greater or less than those shown. There is no
assumption for premium taxes, applicable in certain states, in these examples.

THE PURPOSE OF THE TABLE IS TO ASSIST CONTRACT OWNERS IN UNDERSTANDING
THE VARIOUS

<PAGE>
COSTS AND EXPENSES THAT THEY BEAR DIRECTLY OR INDIRECTLY. THE TABLE REFLECTS
EXPENSES OF THE SEPARATE ACCOUNT AS WELL AS THOSE OF THE UNDERLYING FUNDS. SEE
"THE CONTRACT-DEDUCTIONS AND EXPENSES."

<PAGE>

Condensed Financial Information

The following information is taken from the Separate Account financial
statements and is covered by the report of the Separate Account Independent
Auditors. A copy of the financial statements and reports are contained in the
Annual Report for the Separate Account and are incorporated herein by reference
and may be obtained by calling or writing Horace Mann Life Insurance Company.
The Small Cap Growth Fund, International Equity Fund and Socially Responsible
Fund each commenced operations on March 10, 1997.
<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 12/31/98 $25.66 $ 24.34 22,401,337
12/31/97 23.76 25.66 18,317,985
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

Balanced 12/31/98 19.82 $18.90 21,781,222
Fund 12/31/97 18.94 19.82 18,709,483
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

Income Fund 12/31/98 13.00 $ 13.24 1,006,166
12/31/97 12.69 13.00 718,041
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

Short-Term 12/31/98 9.99 $ 9.98 125,460
Fund 12/31/97 10.03 9.99 114,103
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
<PAGE>
<CAPTION>
<S> <C> <C> <C> <C>
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

Small Cap
Fund 12/31/98 $11.70 $ 12.38 2,063,019
12/31/97 10.00 11.70 1,219,124

International
Equity Fund 12/31/98 $10.27 $12.13 758,622
12/31/97 10.00 10.27 451,401

Socially
Responsible
Fund 12/31/98 $12.10 $12.99 2,513,258
12/31/97 10.00 12.10 692,571
</TABLE>
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) 535-7123, 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.

To the extent required, all charges shown in the Table of Annual Operating
Expenses are reflected in the calculations of the performance figures. Because
the median contract value exceeds $10,000, the annual maintenance charge of $25
has not been deducted. However, contracts with a value of less than $10,000
would be subject to the annual maintenance fee, which would reduce performance.
Total return may be calculated to reflect the fact that certain expenses have
ben 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.

<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 ("Trust") is an open-end, diversified, management
investment company registered under the Investment Company Act of 1940. The
Trust is made up of a series of portfolios ("Funds"). The Trust issues shares of
beneficial interest that are continually offered for sale. The Funds, advised by
Wilshire Associates Incorporated ("Wilshire"), invest in securities of different
issuers and industry classifications in an attempt to spread and reduce the
risks inherent in all investing. Wilshire has entered into an agreement with
investment subadviser(s) for each of the Funds whereby the subadviser(s) manage
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 substantially all of its assets in common stocks of domestic
companies. Wellington Management, LLP ("Wellington Management"), Brinson
Partners, Inc ("Brinson Partners") and Mellon Equity Associates, LLP ("Mellon
Equity") serve as the investment subadvisers to the Growth 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 mix of common stocks, debt securities and
money market instruments. Wellington Management, Brinson Partners and Mellon
Equity serve as the investment subadvisers 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 U.S. Investment grade fixed income
securities. Wellington Management serves as the investment sub-adviser to the
Income Fund.

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 serves as the investment subadviser to the Short-Term Fund.

<PAGE>

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.
Accordingly, their stock prices may rise faster, but can also decline more in
unfavorable business climates. As a result of these "higher highs" and "lower
lows," they are more volatile. BlackRock Financial Management, Inc.("Blackrock")
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. Investing in foreign
securities may involve a greater degree of risk than investing in domestic
securities due to the possibility of currency fluctuations, more volatile
markets, less securities regulation and political instability. Scudder Kemper
Investments, Inc. ("Scudder Kemper") serves as the investment subadviser to the
International Equity Fund.

The investment objective of the Socially Responsible Fund is long-term growth of
capital, 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 pornographic materials;

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

6. By popular standards, maintain nondiscriminatory
employment practices throughout a company's
facilities; and

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

Because this fund invests in companies with socially responsible business
practices, it has limitations that may have an impact on performance. Scudder
Kemper serves as the investment subadviser to the Socially Responsible Fund.

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

Administrator: Horace Mann Investors, Inc.

Investors, a wholly-owned subsidiary of Horace Mann Educators Corporation which
is the indirect owner of Horace Mann Life Insurance Company ("HMLIC"), serves as
administrator to the Funds pursuant to an Administration Agreement dated March
1, 1999 with the Trust (the "Administration Agreement"). Investors provides for
the management of the business affairs of each fund, including, but not limited
to, office space, secretarial and clerical services, bookkeeping services, wire
and telephone communications services, and other similar services necessary for
the proper management of each fund's business affairs. Under the current
administration agreement, the Funds agree to assume and pay the charges and
expenses of its operations, including, by way of example, the compensation of
Trustees other than those affiliated with Investors, charges and expenses of
independent auditors, of legal counsel, of any transfer or dividend disbursing
agent, of the custodian, all costs of acquiring and disposing of portfolio
securities, interest, if any, on obligations incurred by the Funds, reports and
notices to shareholders, other like miscellaneous expenses, and all taxes and
fees to federal, state, or other governmental agencies.

<PAGE>

For the services and facilities furnished to the funds, Investors receives a fee
based upon the combined assets of the funds as follows: 0.25% of the first $1
billion of assets and p.20% of assets in excess of $1 billion. Under the fund of
funds structure for the Balanced fund, the administration fee would be based
upon all assets in the Balanced Fund. However, Investors has indicated that it
intends to waive the majority of such fees. Balanced Fund shareholders will
indirectly pay the administration fee of the assets invested int he Growht Fund
and Income Fund. Therefore, the aggregate administration fees directly and
indirectly borne by shareholders of the Balanced Fund will be higher.

Support Services Agreement. The Trust has a support services agreement (the
"Support Services Agreement") with HMLIC under which the Trust has retained
HMLIC to provide certain administrative services to the Trust. As the Trust's
servicer, HMLIC will provide those administrative and support services
reasonably necessary to coordinate the activities of the Funds with those of the
separate account of HMLIC (for which the Funds serve as the underlying
investment medium) other than the administrative services provided by Investors
under the Administration Agreement. As compensation for its services, HMLIC will
receive a fee equal to 0.15% on the first $1 billion in net assets and 0.10% on
all assets over $1 billion.

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 certain 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 Horace Mann
Investors, Inc. ("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 in some states a
properly endorsed suitability questionnaire. For a Contract issued pursuant to
Section 403(b) of the IRC, the applicant must sign an acknowledgment of the IRC
restrictions on withdrawals applicable to such contracts. For an IRA, Roth IRA,
SIMPLE or a Contract issued under a SEP plan, the applicant must acknowledge
receipt of the 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 2%
to 6% of Purchase Payments received.

Purchase Payments

<PAGE>

Amount and Frequency of Purchase Payments - The minimum annual Purchase
Payment under a flexible premium Contract is $225. Payments may be made in a
lump sum or installments. The minimum monthly Purchase Payment is $25. No
Purchase Payments are required after the first Contract Year. The minimum
Purchase Payment under a single premium Contract is $2,000. Under certain
individual contracts and group plans the minimum may be reduced or eliminated.
In addition, some individual contracts require a minimum Purchase Payment of
$50,000, $100,000 or $250,000.

The IRC limits the amounts which may be contributed to qualified plans. See
"Tax Consequence-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. The value of an
Accumulation Unit is based on the investment experience of the underlying Fund.

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 Funds 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 portion of the Contract into a subaccount are treated
like any other partial withdrawal from the fixed account, except that the early
withdrawal penalty is being waived. If an amount transferred from the fixed
account is surrendered or withdrawn within 365 days, the amount transferred will
be subject to the applicable surrender charge and early withdrawal penalty as if
the money had been withdrawn from the fixed account. The penalty will not be
charged if (1) the transfer occurred on a Scheduled Update (renewal date) or (2)
if the Scheduled update occurred between the transfer and withdrawal or
surrender date(s)). 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 and the fixed
account 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(not extending beyond a twelve month period) may be
pre-scheduled at any point in time. Transfers can be pre-scheduled by following
the procedures in the paragraph above. See "Other Information-Forms
Availability." If Contract Owner decides to cancel a pre-scheduled transfer
arrangement, he or she must notify the Home Office either in writing or by
calling (800) 999-1030 or Telefacsimile (FAX) (217) 527-2307 prior to the next
designated transfer date.

<PAGE>

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 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, (2) include the
Contract Owners'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 in the Home Office. 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
partial withdrawal request must be in a form acceptable by HMLIC; telefaxsimile
(FAX) transmissions of the request will be accepted if the proceeds are sent to
the Contract Owner. A surrender request must be in a form acceptable by HMLIC;
telefaxsimile (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 Single
Contract Payment
Year Flexible Premium Contracts (based on cash value at issue) Contracts
Under age 55
Under $50,000 $50,000+ $100,000+ $250,000+
<S> <C> <C> <C> <C> <C>
1 8% 7% 6% 6% 5%
2 8% 6% 5% 5% 4%
3 6% 5% 5% 5% 3%
4 4% 5% 5% 5% 2%
5 2% 5% 5% 5% 1%
Thereafter 0% 0% 0% 0% 0%

Age 55+
1 8% 7% 6% 6% 5%
2 8% 6% 5% 5% 4%
3 6% 5% 4% 4% 3%
4 4% 4% 3% 3% 2%
5 2% 3% 2% 2% 1%
6 0% 2% 1% 1% 0%
7 0% 1% 0% 0% 0%
Thereafter 0% 0% 0% 0% 0%
</TABLE>
<PAGE>

HMLIC Surrender Charges are applied to the withdrawals based on the date the
account is opened and not on the date the premium is paid. Under certain group
plans the surrender charges may be reduced.

Partial withdrawals may be made without charge if (1) the withdrawal does not
exceed 15% of the Contract value; and (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 may be 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.

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 as soon as possible 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. This charge may be reduced or eliminated on
certain individual contracts and on some group plans. 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 subaccount(s)
have any value.

Charges for annual maintenance cease on the Maturity date. 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.

<PAGE>

Mortality and Expense Risk Fee - For assuming mortality and expense
risk, HMLIC applies an asset charge to the account value of each Contract. The
fee for mortality and expense risk may not exceed the annual rate of 1.25% of
the average net variable account value based on the date of calculation (0.45%
for mortality risk, and 0.80% for expense risk); however, HMLIC reserves the
right to change the fee (subject to the 1.25% ceiling) in the future. The fee
accumulates on a weekly basis at a rate of .0238268%(for a fee of 1.25, see
below for other rates) of the net variable account value as of the date of the
calculation. The accumulated value of the fee is deducted annually (usually at
the time the Trust declares dividends) from each subaccount or upon any
surrender, partial withdrawal or transfer of value accruing before such annual
deduction with the necessary number of units, at the then current accumulation
unit value, being redeemed to equal the dollar amount of the charges owed.

Initial Contract value Mortality and Expense Risk Fee Weekly Factor
Less than $50,000 1.25% .0238268%
$50,000+ 1.15% .0219313%
$100,000+ 1.05% .0200340%
$250,000+ 0.95% .0181348%

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
paid 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. Under some group plans and certain individual flexible premium
products the death benefit may include an annual increase in value. Proof of
death includes a certified death certificate and a completed claimant's
statement.

All or part of the death benefit proceeds may be paid to the beneficiary 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.

For all Contracts issued in connection with this Prospectus, except Roth IRAs,
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.

<PAGE>

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. Also, 403(b) Contract Owner's who have not separated from service
can delay their distributions until after they separate from service(ie. quit
teaching).

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 from a 403(b)
contract in excess of the mandatory minimum distribution is subject to a 20%
federal income tax withholding. Roth IRA's are not subject to Mandatory
Distribution. See "Tax Consequences."

Income Payments
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.

Income Payment Options
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, 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. If no beneficiary is living at the time of the
Annuitant's death, the present 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 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.

<PAGE>

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 based on the survivor percentage elected. 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.
If no beneficiary is living at the time of the Annuitant's death, the present
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 subject to surrender penalties, if
applicable, from the remaining present 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 present value, if any, of the remaining
Income Payments. If no beneficiary is living at the time of the Annuitant's
death, the present 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 subject to
surrender penalties, if applicable, from the remaining present 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.

<PAGE>

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 the survivor percentage
elected.

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 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. One divided by 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 3.0% per annum.

Annuity Unit Value - The variable annuity unit value for the Growth,
Balanced, and Income Fund was set at $10.00 as of the date amounts first were
allocated to provide Income Payments. The variable annuity unit value for the
Short-Term Fund, International Fund, Small Cap Fund and Socially Responsible
Fund also have 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 multiplying this result by the
investment multiplier.

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 portfolio within
the Trust other than one or more of the seven currently offered Horace man
Mutual Funds. If any shares of the Trust's seven portfolios 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 portfolio 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 portfolio. No substitution will be made without prior approval
of the Securities and Exchange Commission. Any substitution would be for shares
of portfolio with investment objectives similar to those of the Fund it
replaces.

Tax Consequences

Separate Account

<PAGE>

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

If the Contract is used as traditional 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. The same contribution limits apply to the Roth IRA,
however, it is funded with after tax dollars. The maximum annual contributions
for all IRAs (including Roth IRA's) is $2,000. Contributions to a simplified
employee pension plan Contract generally may not exceed 15% of compensation or
$26,000, 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 a deductible IRA. No
limitations are imposed on the amount of contributions made to a nonqualified
contract.

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(IRC 403(b)(11)(B)).

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. 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. Roth
IRA's can only accept rollover money from a traditional IRA or another Roth.

<PAGE>

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 and certain Roth distributions, 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. Contract Owners of
non-qualified contracts are not subject to the Minimum distribution
requirements.

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 also be made by means of a full tax free exchange of
annuity contracts under IRC Section 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,

<PAGE>

(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.)

Roth IRA's are not subject to the 10% penalty tax if;

The contract has been in force for five years, and;

The Annuitant has attained age 591/2; or When used to purchase a first home
not to exceed $10,000(as adjusted by the IRA);or The Annuitant becomes
disabled as defined under IRC Section 72(m)(7);or The distribution is made
after the death of the Annuitant.

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.

<PAGE>

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 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 affecting many transactions allowed under the Contract. These
forms may be obtained by calling the Annuity Customer Service Department toll
free at (800) 999-1030.

NASD Regulation's Public Disclosure Program- Information about Horace Mann
Investors, Inc. And your agent is available from the National Association of
Securities Dealers (NASD) at www.nasdr.com or by calling (800) 289-9999.

Year 2000 Readiness- HMLIC relies on computer systems to maintain customer
accounts and records and process customer account transactions. Because of the
way that computers have historically stored dates, some of these systems
currently may not be able to correctly process activity occurring in the year
2000. By early 1995, HMLIC had a comprehensive plan developed to update these
systems. HMLIC expects, but there can be no absolute assurance that, the
necessary work will be completed on a timely basis.

<PAGE>

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:

Topic Page

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

To receive, without charge, a copy of the 1997 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 Family of Funds,
please complete the following request form and mail it to the address indicated
below, or send it by telefacsimile (FAX) transmission to (217) 535-7123 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:

o 1998 Annual Report of the Horace Mann Mutual Funds and the Horace
Mann Life Insurance Company Separate Account.

o Statement of Additional Information dated May 1, 1999 for the Horace
Mann Mutual Funds.

o Statement of Additional Information dated May 1, 1999 for the Horace
Mann Life Insurance Company Separate Account.

Please mail the above documents to:

__________________________________________
(Name)

__________________________________________
(Address)

__________________________________________
(City/State/Zip)

Text-only versions for the Separate account documents can be viewed or
downloaded from:

The SEC at http://www.sec.gov

You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, D.C. (1-800-SEC-0330) or by sending your request and a duplicating
fee to the SEC's Public Reference Room Section, Washington, S.C. 20549-6009.

No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Fund or its distributor. The Prospectus does not constitute an offering
by the Fund or its distributor in any jurisdiction in which such offering may
not lawfully be made.

<PAGE>

Statement of Additional Information

Variable tax deferred annuity contracts
Qualified and non-qualified plans

Horace Mann Life Insurance Company
Separate Account

May 1, 1999

<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, 1999, 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)
535-7123, or by telephoning toll-free (800) 999-1030.

May 1, 1999

TABLE OF CONTENTS

Topic Page

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

<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, 1998

TOTAL RETURN DATA
AVERAGE ANNUAL TOTAL RETURN(1)
(Based on a $1,000
investment)2 1 YR 5 YRS 10 YRS

Growth Fund Account Division
With Redemption3 (2.28)% 15.81% 14.83%
Without Redemption 6.22% 15.81% 14.83%
Balanced Fund Account Division
With Redemption3 (2.24)% 12.32% 12.37%
Without Redemption 6.26% 12.32% 12.37%
Income Fund Account Division
With Redemption3 (1.83)% 5.21% 7.18%
Without Redemption 5.95% 5.21% 7.18%
Short-Term Fund Account Division
With Redemption3 (4.71)% 3.46% 3.84%
Without Redemption 3.57% 3.46% 3.84%
Small Cap Growth Fund Account Division4
With Redemption3 (3.81)%
Without Redemption 4.56%
International Equity Fund Account Division4
With Redemption3 8.99%
Without Redemption 17.49%
Socially Responsible Fund Account Division4
With Redemption3 (0.15)%
Without Redemption 8.35%

</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 To the extent required, all charges shown in the Table of Annual Operating
Expenses are reflected in the calculations of the performance figures. Because
the median contract value exceeds $10,000, the annual maintenance charge of $25
has not been deducted. However, contracts with a value of less than $10,000
would be subject to the annual maintenance charge, which would reduce
performance. 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.

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

<PAGE>

4 Small Cap Growth Fund, International Equity Fund and Socially Responsible Fund
each commenced operations on March 10, 1997.

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 the annual maintenance charge and 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, 1998. Small Cap
Growth, International Equity and Socially Responsible Funds commenced operations
on March 10, 1997. 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, single premium contracts, and certain
group plans have different fees and charges; therefore these performance
calculations are not valid for those contracts.

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 $3,879,547, $5,781,260,and $ for the years
ended 199,6 1997 and 1998, 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, 1998. A copy of this Annual Report
accompanies the Statement of Additional Information. 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, 1998 and 1997

(With Independent Auditors' Report Thereon)

<PAGE>

Independent Auditors' Report

The Board of Directors
Horace Mann Life Insurance Company:

We have audited the accompanying statutory statements of admitted assets,
liabilities and capital and surplus of Horace Mann Life Insurance Company as of
December 31, 1998 and 1997 and the related statutory statements of operations,
capital and surplus, and cash flow for each of the years in the three-year
period ended December 31, 1998. These financial statements are the
responsibility of Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

As described more fully in notes 1 and 7 to the statutory financial statements,
the Company prepared these statutory financial statements using accounting
practices prescribed or permitted by the Department of Insurance of the State of
Illinois, which practices differ from generally accepted accounting principles.
The effects on the statutory financial statements of the variances between the
statutory basis of accounting and generally accepted accounting principles,
although not reasonably determinable, are presumed to be material.

In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the statutory financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of Horace Mann Life Insurance Company as of December 31, 1998
and 1997, or the results of its operations or its cash flows for each of the
years in the three year period ended December 31, 1998.

Also, in our opinion, the financial statements referred to above present fairly,
in all material respects, the admitted assets, liabilities and capital and
surplus of Horace Mann Life Insurance Company as of December 31, 1998 and 1997,
and results of its operations and its cash flow for each of the years in the
three year period ended December 31, 1998, on the basis of accounting described
in note 1.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
the accompanying Schedules, is presented for purposes of additional analysis and
is not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

KPMG Peat Marwick

<PAGE>

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT

Cross Reference Sheet Required by Rule 495(a)

Item Number in Form N-4 Caption
- - ----------------------- -------

Part A - Prospectus
-------------------

1. Cover Page Cover

2. Definitions Definitions

3. Synopsis
(a) (b) (c) Summary

(d) *

4. Condensed Financial Information
(a) (b) (c) Condensed Financial
Information

5. General Description of Registrant,
Depositor, and Portfolio Companies
(a) (b) (c) (d) (e) (f) Cover; Summary; Horace
Mann Life Insurance Company,
The Account and The Horace
Mann Mutual Funds; Voting
Rights

6. Deductions
(a) (b) (c) (d) (e) Summary; Purchasing the
Contract; Deductions and
Expenses

(f) *

7. General Description of Variable
Annuity Contracts
(a) (b) (c) (d) Summary; Contract Owners'
Rights; Purchasing the
Contract; Transactions; Death
Benefit Proceeds; Mandatory
Minimum Distribution; Income
Payments; Modification of the
Contract; Tax Consequences;
Other Information

8. Annuity Period
(a) (b) (c) (d) (e) (f) Income Payments;
Mandatory Minimum
Distribution; Transfers

<PAGE>

Item Number in Form N-4 Caption
- - ----------------------- -------

Part A - Prospectus
-------------------

9. Death Benefit
(a) (b) Death Benefit Proceeds;
Tax Consequences

10. Purchases and Contract Value
(a) (b) (c) (d) Summary; Purchasing the
Contract; Purchase
Payments

11. Redemptions
(a) (c) (e) Summary; Surrender Before
Commencement of Annuity
Period; Deferment

(b) (d) *

12. Taxes
(a) (b) (c) Surrender Before
Commencement of Annuity
Period; Tax Consequences

13. Legal Proceedings Other Information

14. Table of Contents of Additional Information
Statement of Additional Information

PART B - STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------

15. Cover Page Cover

16. Table of Contents Table of Contents

17. General Information and History
(a) (b) *

18. Services
(c) Financial Statements

(a) (b) (d) (e) (f) *

19. Purchase of Securities Being Offered
(a) Underwriter

(b) *

<PAGE>

Item Number in Form N-4 Caption
- - ----------------------- -------

20. Underwriters
(a) (b) (c) Underwriter

(d) *

21. Calculation of Performance Data
(b) Investment Experience

(a) *

22. Annuity Payments *

23. Financial Statements
(a) (b) Financial Statements

PART C
------

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

*Omitted from the Prospectus or Statement of Additional Information because
the Item is not applicable.

<PAGE>

PART C

OTHER INFORMATION

HORACE MANN LIFE INSURANCE COMPANY SEPARATE ACCOUNT

Item 24. Financial Statements and Exhibits
- - -------------------------------------------

(a) Financial Statements
-------------------------

Part A
Condensed financial information of the Account
Part B

The following Financial statements of the Account will be
subsequently filed. : the Annual Report for the
Registrant,: _____
-Report of Independent Auditors
-Statements of Net Assets - December 31, 1998
-Statements of Operations - For the Year Ended

December 31, 1998
-Statements of Changes in Net Assets For the Year Ended December
31, 1998
-Statements of Changes in Net Assets For the Year Ended December
31, 1997
-Notes to Financial Statements - December 31, 1998
Financial statements for Horace Mann Life Insurance Company
-Report of Independent Auditors
-Statutory Statements of Admitted Assets, Liabilities
and Capital and Surplus - As of December 31, 1998 and
1997
-Statutory Statements of Operations - For the Years Ended
December 31, 1998, 1997 and 1996
-Statutory Statements of Capital and Surplus - For the
Years Ended December 31, 1998, 1997 and 1996
-Statutory Statements of Cash Flow - For the Years
Ended December 31, 1998, 1997 and 1996
-Notes to Statutory Financial Statements - December 31,
1998, 1997 and 1996

(b) Exhibits
-------------------------

( 1) Resolution of Board of Directors........... Post Effective Amendment 63
( 2) Agreements for custody.................................. Not Applicable
( 3) Underwriting Agreement..................... Post Effective Amendment 63
( 4) Form of Variable Annuity Contract.............. To be filed with 485(b)
( 5) Form of application.........................Post Effective Amentment 63
( 6) Certificate of incorporation and bylaws..Initial Registration Statement
( 7) Contract of Reinsurance................................. Not Applicable
( 8) Other Contracts......................................... Not Applicable
( 9) Opinion and Consent of Counsel.......................... Not Applicable
(10) Consent of Independent Auditors................ To be filed with 485(b)
(11) Financial Statement Schedules for Horace Mann Life
Insurance Company and the Independent Auditors' Report
thereon.........................................To be filed with 485(b)
(12) Agreement regarding initial capital......Initial Registration Statement
(13) Performance Quotation Computations........ Post-Effective Amendment #57
(14) Power of Attorney....................................... Not Applicable
(15) Horace Mann Educators Corporation
and its Subsidiaries...................... Post-Effective Amendment #57
(16) Financial Data Schedule................................. Filed Herewith

C-1

<PAGE>

Item 25. Directors and Officers of the Depositor
- - -------------------------------------------------

The directors and officers of Horace Mann Life Insurance Company, who are
engaged directly or indirectly in activities relating to the registrant or the
variable annuity contracts offered by the registrant, are listed below. Their
principal business address is One Horace Mann Plaza, Springfield, Illinois
62715.

Name Position & Office with Depositor
- - ---- --------------------------------

Larry K. Becker Director and Executive Vice President,
Chief Financial Officer

Ann M. Caparros Director, Vice President, General Counsel &
Corporate Secretary

Valerie A. Chrisman Director and Senior Vice President

Paul J. Kardos Director and President & Chief Executive Officer

Edward L. Najim Director and Executive Vice President

George J. Zock Director and Executive Vice President

A. Thomas Arisman Senior Vice President

Roger W. Fisher SeniorVice President & Controller

Bret A. Conklin Vice President &Controller

J. Michael Henderson Vice President & Treasurer

John H. Leitermann Vice President & Life Actuary

William J. Kelly Vice President

Item 26. Controlled by or Under Common Control with the Depositor or Registrant
- - -----------------------------------------------------------------------------

The Registrant is a separate account of Horace Mann Life Insurance Company.
Horace Mann Life Insurance Company is a wholly owned subsidiary of Allegiance
Life Insurance Company. Allegiance Life Insurance Company and Horace Mann
Investors, Inc., principal underwriter of the Registrant, are wholly-owned
subsidiaries of Horace Mann Educators Corporation, a publicly held corporation.
See Exhibit No. 15.

Item 27. Number of Contract Owners
- - -----------------------------------

As of February, 1999, the number of Contract Owners of Horace Mann Life
Insurance Company Separate Account was 66,428 of which 62,657 were qualified
Contract Owners and 3,771 were non-qualified Contract Owners.

C-2

<PAGE>

Item 28. Indemnification
- - -------------------------

Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Item 29. Principal Underwriters
- - --------------------------------

Horace Mann Investors, Inc., the underwriter of Horace Mann Life Insurance
Company Separate Account, acts as principal underwriter for Horace Mann Life
Insurance Company Separate Account B and Horace Mann Life Insurance Company
Allegiance Separate Account A.

The following are the directors and officers of Horace Mann Investors, Inc.
Their principal business address is One Horace Mann Plaza, Springfield, Illinois
62715.

Name Position with Underwriter
- - ---- -------------------------

A. Thomas Arisman Director and President

Larry K. Becker Director

George J. Zock Director

Ann M. Caparros Secretary

Roger W. Fisher Controller

William J. Kelly Treasurer and Broker/dealer Compliance
Officer

Diane M. Barnett Tax Compliance Officer

Richard D. Wilson Marketing Officer

The following is a listing of the commissions and other compensation
received by the principal underwriter from the Registrant during the fiscal year
ended December 31, 1998:

Net Underwriting Compensation on
Name of Principal Discounts and Redemption or Brokerage
Underwriter Commissions Annuitization Commissions Compensation
- - ----------------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Horace Mann $7,465,597 N/A N/A N/A
Investors, Inc.
</TABLE>

C-3

<PAGE>

Item 30. Location of Accounts and Records
- - -------------------------------------------

Horace Mann Investors, Inc., underwriter of the Registrant, is located at
One Horace Mann Plaza, Springfield, Illinois 62715. It maintains those accounts
and records associated with its duties as underwriter required to be maintained
pursuant to Section 31(a) of theInvestment Company Act and the rules promulgated
thereunder.

Horace Mann Life Insurance Company, the depositor, is located at One Horace Mann
Plaza, Springfield, Illinois 62715. It maintains those accounts and records
required to be maintained pursuant to Section 31(a) of the Investment Company
Act of 1940 and the rules promulgated thereunder that are not maintained by
Horace Mann Investors, Inc.

Item 31. Management Services
- - -----------------------------

Not applicable.

Item 32. Undertakings
- - ----------------------

(a) Registrant undertakes to file a Post-Effective Amendment to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under variable annuity Contracts may be accepted.

(b) Registrant undertakes to include a written communication in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.

(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form N-4 promptly upon written or oral request.

(d) Horace Mann Life Insurance Company and the Registrant are relying on a
no-action letter from the Securities and Exchange Commission that was issued to
the American Council of Life Insurance and made publicly available on November
28, 1988. That letter outlines conditions that must be met if a company offering
registered annuity contracts imposes the limitations on surrenders and
withdrawals on section 403(b) contracts as required by the Internal Revenue
Code. Horace Mann Life Insurance Company and the Registrant are in compliance
with the conditions of that no-action letter.

(e) Horace Mann Life Insurance Company represents that the fees and charges
deducted under the Variable Annuity Contract in the aggregrate are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.

C-4

<PAGE>

INDEX TO EXHIBITS
-----------------
Exhibit
Number Title
- - ------- -----

( 1) Resolution of Board of Directors............Post Effective Amendment 63
( 2) Agreements for custody Not Applicable
( 3) Underwriting Agreement Post Effective Amendment 63
( 4) Form of Variable Annuity Contract...............To be filed with 485(b)
( 5) Form of application.........................Post Effective Amendment 63
( 6) Certificate of incorporation and bylaws................................
........................................Initial Registration Statement
( 7) Contract of Reinsurance..................................Not Applicable
( 8) Other Contracts..........................................Not Applicable
( 9) Opinion and Consent of Counsel...........................Not Applicable
(10) Consent of Independent Auditors..................To be filed with 485(b)
(11) Financial Statement Schedules for Horace Mann Life
Insurance Company and the Independent Auditors' Report
thereon.................................To be filed with 485(b) filing
(12) Agreement regarding initial capital........Initial Registration Statement
(13) Performance Quotation Computations...........Post-Effective Amendment #57
(14) Power of Attorney........................................Not Applicable
(15) Horace Mann Educators Corporation
and its Subsidiaries......................Post-Effective Amendment #57
(16) Financial Data Schedule................................. Filed Herewith

C-5

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned,thereto duly authorized in the City of Springfield
and State of Illinois, on this 2nd day of March, 1999.
HORACE MANN INSURANCE COMPANY SEPARATE ACCOUNT

By: Horace Mann Life Insurance Company
-----------------------------------
(Depositor)

Attest: s/ANN M. CAPARROS By: s/PAUL J. KARDOS
--------------------------- ----------------------------
Ann M. Caparros Paul J. Kardos, President and Chief
Corporate Secretary Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.

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

s/PAUL J. KARDOS Director, President and March 2, 1999
- - ---------------------- --------------
Paul J. Kardos Chief Executive Officer

Director, Executive Vice
s/LARRY K. BECKER President and Chief March 2, 1999
- - ---------------------- --------------
Larry K. Becker Financial Officer

Director, Vice President,
s/ANN M. CAPARROS General Counsel and March 2, 1999
- - ---------------------- --------------
Ann M. Caparros Corporate Secretary

s/ VALERIE A. CHRISMAN Director, March 2, 1999
- - ---------------------- Senior Vice President --------------
Valerie A. Chrisman

Vice President, Controller
s/ROGER W. FISHER and Principal Accounting March 2, 1999
- - ---------------------- --------------
Roger W. Fisher Officer

C-6

<PAGE>

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

/s/ GEORGE J. ZOCK Director and Executive March 2, 1999
- - ---------------------- Vice President --------------
George J. Zock

/s/ THOMAS A. ARISMAN Senior Vice President March 2, 1999
- - ---------------------- --------------
Thomas A. Arisman

C-7

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN GROWTH FUND
<SERIES>
<NUMBER> 1
<NAME> 1,000
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 601,060
<INVESTMENTS-AT-VALUE> 670,122
<RECEIVABLES> 1,076
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 671,198
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 467
<TOTAL-LIABILITIES> 467
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 601,612
<SHARES-COMMON-STOCK> 27,557
<SHARES-COMMON-PRIOR> 23,328
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 57
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 69,062
<NET-ASSETS> 670,731
<DIVIDEND-INCOME> 12,411
<INTEREST-INCOME> 871
<OTHER-INCOME> 0
<EXPENSES-NET> 3,275
<NET-INVESTMENT-INCOME> 10,007
<REALIZED-GAINS-CURRENT> 69,125
<APPREC-INCREASE-CURRENT> (33,476)
<NET-CHANGE-FROM-OPS> 45,656
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,018
<DISTRIBUTIONS-OF-GAINS> 69,458
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115,739
<NUMBER-OF-SHARES-REDEEMED> 82,277
<SHARES-REINVESTED> 72,586
<NET-CHANGE-IN-ASSETS> 72,228
<ACCUMULATED-NII-PRIOR> 11
<ACCUMULATED-GAINS-PRIOR> 389
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,119
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,391
<AVERAGE-NET-ASSETS> 638,457
<PER-SHARE-NAV-BEGIN> 25.66
<PER-SHARE-NII> .41
<PER-SHARE-GAIN-APPREC> 1.51
<PER-SHARE-DIVIDEND> .41
<PER-SHARE-DISTRIBUTIONS> 2.83
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.34
<EXPENSE-RATIO> .51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN BALANCED FUND
<SERIES>
<NUMBER> 2
<NAME> BALANCED FUND.
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 395,144
<INVESTMENTS-AT-VALUE> 424,961
<RECEIVABLES> 3,319
<ASSETS-OTHER> 21
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 428,301
<PAYABLE-FOR-SECURITIES> 89
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 292
<TOTAL-LIABILITIES> 381
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 398,001
<SHARES-COMMON-STOCK> 22,636
<SHARES-COMMON-PRIOR> 19,529
<ACCUMULATED-NII-CURRENT> 166
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (67)
<ACCUM-APPREC-OR-DEPREC> 29,820
<NET-ASSETS> 427,920
<DIVIDEND-INCOME> 4,814
<INTEREST-INCOME> 11,987
<OTHER-INCOME> 0
<EXPENSES-NET> 2,036
<NET-INVESTMENT-INCOME> 14,765
<REALIZED-GAINS-CURRENT> 33,816
<APPREC-INCREASE-CURRENT> (18,717)
<NET-CHANGE-FROM-OPS> 29,864
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 15,358
<DISTRIBUTIONS-OF-GAINS> 33,665
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69,434
<NUMBER-OF-SHARES-REDEEMED> 53,631
<SHARES-REINVESTED> 44,166
<NET-CHANGE-IN-ASSETS> 40,810
<ACCUMULATED-NII-PRIOR> 416
<ACCUMULATED-GAINS-PRIOR> 125
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,919
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,098
<AVERAGE-NET-ASSETS> 410,061
<PER-SHARE-NAV-BEGIN> 19.82
<PER-SHARE-NII> .73
<PER-SHARE-GAIN-APPREC> .77
<PER-SHARE-DIVIDEND> .74
<PER-SHARE-DISTRIBUTIONS> 1.68
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.90
<EXPENSE-RATIO> .50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN INCOME FUND
<SERIES>
<NUMBER> 3
<NAME> INCOME FUND
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 13,434
<INVESTMENTS-AT-VALUE> 13,821
<RECEIVABLES> 213
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,036
<PAYABLE-FOR-SECURITIES> 1
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 76
<TOTAL-LIABILITIES> 77
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,566
<SHARES-COMMON-STOCK> 1,054
<SHARES-COMMON-PRIOR> 743
<ACCUMULATED-NII-CURRENT> 5
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 388
<NET-ASSETS> 13,959
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 767
<OTHER-INCOME> 0
<EXPENSES-NET> 100
<NET-INVESTMENT-INCOME> 667
<REALIZED-GAINS-CURRENT> 120
<APPREC-INCREASE-CURRENT> 89
<NET-CHANGE-FROM-OPS> 876
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 687
<DISTRIBUTIONS-OF-GAINS> 122
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,592
<NUMBER-OF-SHARES-REDEEMED> 4,041
<SHARES-REINVESTED> 683
<NET-CHANGE-IN-ASSETS> 4,301
<ACCUMULATED-NII-PRIOR> 27
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 51
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 100
<AVERAGE-NET-ASSETS> 11,406
<PER-SHARE-NAV-BEGIN> 13.00
<PER-SHARE-NII> .78
<PER-SHARE-GAIN-APPREC> .27
<PER-SHARE-DIVIDEND> .69
<PER-SHARE-DISTRIBUTIONS> .12
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.24
<EXPENSE-RATIO> .88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN SHORT-TERM INVESTMENT FUND
<SERIES>
<NUMBER> 4
<NAME> SHORT-TERM
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,331
<INVESTMENTS-AT-VALUE> 1,332
<RECEIVABLES> 1
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,335
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4
<TOTAL-LIABILITIES> 4
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,330
<SHARES-COMMON-STOCK> 133
<SHARES-COMMON-PRIOR> 115
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,331
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 74
<OTHER-INCOME> 0
<EXPENSES-NET> 9
<NET-INVESTMENT-INCOME> 65
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 65
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 65
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,937
<NUMBER-OF-SHARES-REDEEMED> 3,806
<SHARES-REINVESTED> 49
<NET-CHANGE-IN-ASSETS> 180
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35
<AVERAGE-NET-ASSETS> 1,358
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> .49
<PER-SHARE-GAIN-APPREC> .01
<PER-SHARE-DIVIDEND> .51
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.98
<EXPENSE-RATIO> .69
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN SMALL CAP GROWTH FUND
<SERIES>
<NUMBER> 5
<NAME> SMALL CAP
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 22,341
<INVESTMENTS-AT-VALUE> 28,633
<RECEIVABLES> 28
<ASSETS-OTHER> 46
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28,707
<PAYABLE-FOR-SECURITIES> 22
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30
<TOTAL-LIABILITIES> 52
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 26,204
<SHARES-COMMON-STOCK> 2,315
<SHARES-COMMON-PRIOR> 1,412
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3,841)
<ACCUM-APPREC-OR-DEPREC> 6,292
<NET-ASSETS> 28,655
<DIVIDEND-INCOME> 5
<INTEREST-INCOME> 109
<OTHER-INCOME> 0
<EXPENSES-NET> 241
<NET-INVESTMENT-INCOME> (127)
<REALIZED-GAINS-CURRENT> (3,345)
<APPREC-INCREASE-CURRENT> 5,176
<NET-CHANGE-FROM-OPS> 1,704
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,868
<NUMBER-OF-SHARES-REDEEMED> 4,443
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12,129
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (496)
<GROSS-ADVISORY-FEES> 297
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 382
<AVERAGE-NET-ASSETS> 21,706
<PER-SHARE-NAV-BEGIN> 11.70
<PER-SHARE-NII> (.07)
<PER-SHARE-GAIN-APPREC> .75
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.38
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN INTERNATIONAL EQUITY FUND
<SERIES>
<NUMBER> 6
<NAME> INTERNATIONAL
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 9,229
<INVESTMENTS-AT-VALUE> 10,325
<RECEIVABLES> 28
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,354
<PAYABLE-FOR-SECURITIES> 16
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27
<TOTAL-LIABILITIES> 43
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,233
<SHARES-COMMON-STOCK> 850
<SHARES-COMMON-PRIOR> 508
<ACCUMULATED-NII-CURRENT> 4
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (23)
<ACCUM-APPREC-OR-DEPREC> 1,097
<NET-ASSETS> 10,311
<DIVIDEND-INCOME> 111
<INTEREST-INCOME> 48
<OTHER-INCOME> 0
<EXPENSES-NET> 81
<NET-INVESTMENT-INCOME> 78
<REALIZED-GAINS-CURRENT> 45
<APPREC-INCREASE-CURRENT> 1,072
<NET-CHANGE-FROM-OPS> 1,195
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 73
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,128
<NUMBER-OF-SHARES-REDEEMED> 1,167
<SHARES-REINVESTED> 14
<NET-CHANGE-IN-ASSETS> 5,097
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (69)
<GROSS-ADVISORY-FEES> 83
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 163
<AVERAGE-NET-ASSETS> 7,910
<PER-SHARE-NAV-BEGIN> 10.27
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 1.84
<PER-SHARE-DIVIDEND> .09
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.13
<EXPENSE-RATIO> 1.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000110698
<NAME> HORACE MANN SOCIALLY RESPONSIBLE FUND
<SERIES>
<NUMBER> 7
<NAME> SOCIALLY RESPONSIBLE
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 34,119
<INVESTMENTS-AT-VALUE> 35,532
<RECEIVABLES> 121
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35,654
<PAYABLE-FOR-SECURITIES> 3
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 87
<TOTAL-LIABILITIES> 90
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,194
<SHARES-COMMON-STOCK> 2,738
<SHARES-COMMON-PRIOR> 762
<ACCUMULATED-NII-CURRENT> 11
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (54)
<ACCUM-APPREC-OR-DEPREC> 1,413
<NET-ASSETS> 35,564
<DIVIDEND-INCOME> 555
<INTEREST-INCOME> 47
<OTHER-INCOME> 0
<EXPENSES-NET> 140
<NET-INVESTMENT-INCOME> 462
<REALIZED-GAINS-CURRENT> 289
<APPREC-INCREASE-CURRENT> 831
<NET-CHANGE-FROM-OPS> 1,582
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 452
<DISTRIBUTIONS-OF-GAINS> 336
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27,958
<NUMBER-OF-SHARES-REDEEMED> 2,930
<SHARES-REINVESTED> 529
<NET-CHANGE-IN-ASSETS> 26,351
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (7)
<GROSS-ADVISORY-FEES> 195
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 247
<AVERAGE-NET-ASSETS> 21,956
<PER-SHARE-NAV-BEGIN> 12.10
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> .91
<PER-SHARE-DIVIDEND> .17
<PER-SHARE-DISTRIBUTIONS> .12
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>