FIRST INVESTORS SPECIAL BOND FUND INC
497, 1997-04-29
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FIRST INVESTORS LIFE VARIABLE ANNUITY FUND A

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OFFERED BY
FIRST INVESTORS LIFE INSURANCE COMPANY

95 Wall Street, New York, New York  10005/(212) 858-8200


      This Prospectus describes the Variable Annuity Contracts (the "Contracts")
offered by First Investors Life Insurance Company ("First Investors Life").  The
Contracts are designed for individual investors who desire to accumulate capital
on a  tax-deferred  basis  for  retirement  or  other  long-term  purposes.  The
Contracts may be purchased on a  nonqualified  basis.  The Contracts may also be
purchased through (1) qualified individual retirement accounts and (2) qualified
corporate employee pension and  profit-sharing  plans. The Contracts offered are
flexible premium deferred annuity contracts ("Deferred Annuity Contracts") under
which annuity  payments  will begin on a selected  future date. A PENALTY MAY BE
ASSESSED ON EARLY  WITHDRAWALS.  SEE "FEDERAL  INCOME TAX STATUS." THE CONTRACTS
CONTAIN A 10-DAY  REVOCATION  RIGHT.  SEE "VARIABLE  ANNUITY  CONTRACTS--TEN-DAY
REVOCATION  RIGHT." The Contracts  provide for the  accumulation  of values on a
variable basis.  Payment of annuity benefits will be on a variable basis, unless
a fixed basis or a  combination  of variable  and fixed bases is selected by the
Contractowner. Although the Contracts do not meet the requirements applicable to
tax  qualified  plans,  the tax status of the  Annuitant  is  determined  by the
provisions  of the plan (see  "Federal  Income Tax  Status").  Unless  otherwise
stated,  this Prospectus  describes only the variable  aspects of the Contracts.
The Contracts contain information on the fixed aspects.


      Contractowners'  purchase payments less certain  deductions ("net purchase
payments") are paid into a unit investment trust,  First Investors Life Variable
Annuity  Fund A ("Separate  Account  A").  The assets of Separate  Account A are
invested at net asset value in shares of First Investors Special Bond Fund, Inc.
(the "Fund"), an open-end, diversified management investment company.


      This Prospectus sets forth the information about Separate Account A that a
prospective  investor should know before investing and should be kept for future
reference. A Statement of Additional Information, dated April 30, 1997, has been
filed with the Securities and Exchange  Commission and is incorporated herein by
reference  in its  entirety.  (See page 17 of this  Prospectus  for the Table of
Contents  of  the  Statement  of  Additional   Information.)  The  Statement  of
Additional Information is available at no charge upon request to First Investors
Life at the address or telephone number indicated above.  Additional information
about  Separate  Account  A has been  filed  with the  Securities  and  Exchange
Commission.


    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
       AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
       THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
                              ACCURACY OR ADEQUACY
                  OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
                         CONTRARY IS A CRIMINAL OFFENSE.
           THIS PROSPECTUS IS VALID ONLY WHEN ATTACHED TO THE CURRENT
              PROSPECTUS OF FIRST INVESTORS SPECIAL BOND FUND, INC.


                  The date of this Prospectus is April 30, 1997

<PAGE>

                                   PROSPECTUS
                                TABLE OF CONTENTS

GLOSSARY OF SPECIAL TERMS....................................................3
FEE TABLE....................................................................4
CONDENSED FINANCIAL INFORMATION..............................................5
GENERAL DESCRIPTION..........................................................5
      First Investors Life Insurance Company.................................5
      Separate Account A.....................................................5
      The Fund...............................................................6
      Adviser................................................................6
      Underwriter............................................................6
      Voting Rights..........................................................6
PURCHASES, DEDUCTIONS, CHARGES AND EXPENSES..................................7
      Purchase Payments......................................................7
      Deductions from Purchase Payments......................................7
      Deduction Table........................................................8
      Exchange Privilege.....................................................8
      Mortality and Expense Risk Charges.....................................8
      Administrative Charge..................................................9
      Other Charges..........................................................9
      Expenses...............................................................9
VARIABLE ANNUITY CONTRACTS...................................................9
      Deferred Variable Annuities--Accumulation Period......................10
      Annuity Period........................................................10
      Death Benefit During the Accumulation Period..........................12
      Surrender and Termination (Redemption) During
        the Accumulation Period.............................................12
      Death of Contractowner................................................13
      Ten-Day Revocation Right..............................................13
FEDERAL INCOME TAX STATUS...................................................13
PERFORMANCE INFORMATION.....................................................15
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION................17
APPENDIX I - STATE AND LOCAL TAXES..........................................17


                                       2
<PAGE>

                            GLOSSARY OF SPECIAL TERMS

      ACCUMULATED  VALUE - The value of all the  Accumulation  Units credited to
the Contract.

      ACCUMULATION  PERIOD - The period  between the date of issue of a Contract
and the Annuity Commencement Date.

      ACCUMULATION  UNIT - A unit used to measure the value of a Contractowner's
interest in Separate Account A prior to the Annuity Commencement Date.

      ADDITIONAL PAYMENT - A purchase payment made to First Investors Life after
issuance of a deferred annuity.

      ANNUITANT - The person designated to receive or the person who is actually
receiving annuity payments under a Contract.

      ANNUITY  COMMENCEMENT  DATE - The date on which  annuity  payments  are to
commence.

      ANNUITY UNIT - A unit used to determine the amount of each annuity payment
after the first.

      BENEFICIARY  - The person  designated  to  receive  any  benefits  under a
Contract  upon the death of the  Annuitant in  accordance  with the terms of the
Contract.

      CONTRACT  - An  individual  variable  annuity  contract  offered  by  this
Prospectus.

      CONTRACTOWNER - The person or entity with legal rights of ownership of the
Contract.

      FIXED ANNUITY - An annuity with annuity  payments which remain fixed as to
dollar amount throughout the payment period.


      GENERAL  ACCOUNT - All  assets of First  Investors  Life  other than those
allocated  to Separate  Account A and other  segregated  investment  accounts of
First Investors Life.


      JOINT  ANNUITANT - The  designated  second person under joint and survivor
life annuity.

      SEPARATE  ACCOUNT A - The segregated  investment  account  entitled "First
Investors Life Variable  Annuity Fund A,"  established  by First  Investors Life
pursuant to applicable law and registered as a unit  investment  trust under the
Investment Company Act of 1940, as amended.

      SINGLE PAYMENT - A one-time  purchase payment made to First Investors Life
to purchase a deferred annuity.


      VALUATION DATE - Any date on which the New York Stock Exchange ("NYSE") is
open for regular  trading.  Each  Valuation Date ends as of the close of regular
trading on the NYSE  (normally  4:00 p.m.,  Eastern  Time).  The NYSE  currently
observes the following holidays:  New Year's Day,  Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

      VALUATION  PERIOD - The period  beginning on the date after any  Valuation
Date and ending at the end of the next Valuation Date.


      VARIABLE  ANNUITY - An annuity with annuity  payments varying in amount in
accordance with the net investment experience of Separate Account A.


                                       3
<PAGE>

                                    FEE TABLE

      The  following   table  has  been  prepared  to  assist  the  investor  in
understanding  the various costs and expenses a  Contractowner  will directly or
indirectly  bear. The table reflects  expenses of Separate  Account A as well as
the Fund.

CONTRACTOWNER TRANSACTION EXPENSES
     Sales Load Imposed on Purchases
        (As a percentage of purchase payments) . . . . . . . . . . . .   7.00%

SEPARATE ACCOUNT ANNUAL EXPENSES
   (As a percentage of average account value)
     Mortality  and Expense Risk Fees. . . . . . . . . . . . . . . . .   0.75%
Total Separate Account Annual Expenses. . . . . . . . . . . . . . . .    0.75%


FUND ANNUAL EXPENSES
   (As a percentage of Fund average net assets)
     Management  Fees. . . . . . . . . . . . . . . . . . . . . . . . .   0.75%
     Other  Expenses.  . . . . . . . . . . . . . . . . . . . . . . . .   0.11%
     Total Fund Operating Expenses . . . . . . . . . . . . . . . . . .   0.86%*

*  The  Fund has an  expense  offset  arrangement  that may  reduce  the  Fund's
   custodian  fee based on the  amount of cash  maintained  by the Fund with its
   custodian.  Any  such fee  reductions  are not  reflected  under  Total  Fund
   Operating Expenses.

     For more complete  descriptions  of the various costs and expenses shown in
the Fee Table, please refer to "Purchases, Deductions, Charges and Expenses." An
administrative  charge may be  deducted if the  Accumulated  Value of a Deferred
Annuity Contract is less than $1,500 (see "Administrative Charge"). In addition,
Premium taxes may be applicable (see "Other Charges").

EXAMPLE
If you surrender your Contract at
the end of the applicable time period:     1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                           ------   -------   -------   --------

   You would pay the following expenses
   on a $1,000 investment, assuming 5%
   annual return on assets: ..............   $85      $117      $151       $248

THE EXPENSES IN THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE  EXPENSES.  ACTUAL  EXPENSES IN FUTURE  YEARS MAY BE GREATER OR LESS THAN
THOSE SHOWN.




                                       4
<PAGE>

                         CONDENSED FINANCIAL INFORMATION

ACCUMULATION UNIT VALUES


   The  following  shows  the  accumulation   unit  values  and  the  number  of
accumulation  units  outstanding for Separate  Account A for the last ten fiscal
years:

                                   ACCUMULATION                 NUMBER OF
                 AS OF:            UNIT VALUE($)           ACCUMULATION UNITS
          -----------------        -------------           ------------------
          December 31, 1987            1.88094               23,227,139.1
          December 31, 1988            2.13623               32,388,317.9
          December 31, 1989            2.08689               40,781,044.9
          December 31, 1990            1.88053               28,318,605.0
          December 31, 1991            2.53391               19,910,946.0
          December 31, 1992            2.88323               15,144,947.0
          December 31, 1993            3.38150               12,724,736.0
          December 31, 1994            3.31907               11,057,783.2
          December 31, 1995            3.97815                9,552,100.7
          December 31, 1996            4.46562                8,254,269.6

                               GENERAL DESCRIPTION

      FIRST  INVESTORS LIFE INSURANCE  COMPANY.  First  Investors Life Insurance
Company,  95 Wall Street,  New York, New York 10005 ("First  Investors Life"), a
stock life  insurance  company  incorporated  under the laws of the State of New
York  in  1962,  writes  life  insurance,  annuities  and  accident  and  health
insurance. First Investors Consolidated Corporation ("FICC"), a holding company,
owns all of the voting common stock of First Investors Management Company,  Inc.
("FIMCO" or "Adviser") and all of the outstanding stock of First Investors Life,
First Investors  Corporation ("FIC" or "Underwriter")  and  Administrative  Data
Management  Corp., the transfer agent for the Fund. Mr. Glenn O. Head,  Chairman
of FICC, controls FICC and, therefore,  controls the Adviser and First Investors
Life.

      SEPARATE   ACCOUNT  A.  First  Investors  Life  Variable  Annuity  Fund  A
("Separate  Account  A")  was  established  on  September  11,  1979  under  the
provisions of the New York Insurance  Law. The assets of Separate  Account A are
segregated  from the assets of First  Investors  Life,  and that portion of such
assets  having a value equal to, or  approximately  equal to, the  reserves  and
contract  liabilities  under the Contracts are not chargeable  with  liabilities
arising out of any other business of First Investors Life. Separate Account A is
registered with the Securities and Exchange Commission  ("Commission") as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act"), but such  registration does not involve any supervision by the Commission
of the management or investment practices or policies of Separate Account A.


      The assets of Separate Account A are invested at net asset value in shares
of First Investors  Special Bond Fund, Inc. (the "Fund").  The Fund's Prospectus
describes the risks attendant to an investment in the Fund.

      Income, gains and losses,  whether or not realized,  from assets allocated
to Separate Account A are, in accordance with the applicable Contracts, credited
to or charged against Separate  Account A without regard to other income,  gains
or losses of First  Investors  Life.  The  obligations  under the  Contracts are
obligations of First Investors Life.

      Any and all  distributions  received  from the  Fund  will be paid in Fund
shares or if in cash,  will be reinvested in additional Fund shares at net asset
value. Accordingly, no cash distributions will be made to


                                       5
<PAGE>

Contractowners.  Deductions  and  redemptions  from  Separate  Account  A may be
effected by redeeming the number of applicable Fund shares,  at net asset value,
necessary to satisfy the amount to be deducted or  redeemed.  Shares of the Fund
will be valued at their net asset value.


      Subject to applicable law, First Investors Life reserves the right to make
certain changes if, in its judgment,  they would best serve the interests of the
Contractowners  and  Annuitants  or would be  appropriate  in  carrying  out the
purposes of the Contract.  First Investors Life will obtain, when required,  the
necessary  Contractowner  approval or  regulatory  approval  for any changes and
provide, when required, the appropriate  notification to Contractowners prior to
making  such  changes.  Examples of the changes  First  Investors  Life may make
include, but are not limited to:


             .    To operate  Separate Account A in any form permitted under the
                  1940 Act or in any other form permitted by law.

             .    To add,  delete,  or  substitute  for the Fund  shares held in
                  Separate  Account A, the shares of any  investment  company or
                  series thereof, or any investment permitted by law.

             .    To make any  amendments  to the  Contracts  necessary  for the
                  Contracts  to  comply  with  the  provisions  of the  Internal
                  Revenue Code or any other applicable Federal or state law.


      THE FUND.  First  Investors  Special  Bond  Fund,  Inc.  is a  diversified
open-end   management   investment   company  registered  under  the  1940  Act.
Registration of the Fund with the Commission does not involve supervision by the
Commission of the  management  or investment  practices or policies of the Fund.
The  shares of the Fund are not sold  directly  to the  general  public  but are
available only through the purchase of Contracts issued by First Investors Life.
The Fund  reserves the right to offer its shares to other  separate  accounts of
First Investors Life or directly to First Investors Life.


      The Fund  primarily  seeks to earn a high level of current  income without
undue risk to principal and secondarily seeks growth of capital.  The Fund seeks
to achieve its  objectives by investing at least 65% of its total assets in high
yield,  high risk securities.  Investments in high yield,  high risk securities,
commonly  referred to as "junk  bonds," may entail  risks that are  different or
more pronounced than those involved in higher-rated securities.  See "High Yield
Securities -- Risk Factors" in the Fund's Prospectus.


      For more complete  information about the Fund,  including  management fees
and  other  expenses,  see the  Fund's  Prospectus,  which is  attached  to this
Prospectus.  It is important to read the Prospectus  carefully before you decide
to invest.  No offer will be made of a Contract funded by the underlying  mutual
fund unless a current Prospectus of the Fund has been delivered.

      ADVISER.  First Investors  Management  Company,  Inc. (the "Adviser"),  an
affiliate of First  Investors  Life, is the investment  adviser of the Fund. The
Adviser  supervises and manages the  investments and operations of the Fund. The
Adviser is a New York corporation  located at 95 Wall Street, New York, New York
10005.


      UNDERWRITER. First Investors Life and Separate Account A have entered into
an Underwriting  Agreement with their affiliate,  FIC, 95 Wall Street, New York,
New York 10005.  First Investors Life has reserved the right in the Underwriting
Agreement to sell the  Contracts  directly.  The Contracts are sold by insurance
agents licensed to sell variable annuities,  who are registered  representatives
of the  Underwriter  or  broker-dealers  who  have  sales  agreements  with  the
Underwriter.


      VOTING RIGHTS.  First Investors Life will vote the shares of the Fund held
in  Separate  Account  A or  directly,  at any  Fund  shareholders  meeting,  in
accordance  with its view of  present  law.  It will  vote Fund  shares  held in
Separate Account A as follows:  shares  attributable to Contractowners for which
it  receives   



                                       6
<PAGE>


instructions,  in  accordance  with the  instructions;  shares  attributable  to
Contractowners  for  which  it  does  not  receive  instructions,  in  the  same
proportion  that it votes  shares  held in the  Separate  Account  for  which it
receives  instructions;  and shares not attributable to  Contractowners,  in the
same  proportion  that it votes  shares held in the  Separate  Account  that are
attributable to Contractowners and for which it receives  instructions.  It will
vote Fund shares held directly in the same  proportion that it votes shares held
in the Separate Account that are attributable to Contractowners and for which it
receives  instructions.  All of the  shares of the Fund held by First  Investors
Life  through the  Separate  Account or directly  will be  presented at any Fund
shareholders meeting for purposes of determining a quorum.

      Prior to the Annuity  Commencement Date, the number of Fund shares held in
the Separate Account that is attributable to each Contractowner is determined by
dividing the Separate Account's  Accumulated Value by the net asset value of one
Fund share. After the Annuity  Commencement Date, the number of Fund shares held
in the Separate Account that is attributable to each Contractowner is determined
by dividing the reserve held in the  Separate  Account for the variable  annuity
payment  under the  Contract by the net asset  value of one Fund share.  As this
reserve fluctuates,  the number of votes fluctuates.  The number of votes that a
Contractowner  has the right to cast will be  determined  as of the record  date
established by Life Series Fund.

      Voting  instructions will be solicited by written  communication  prior to
the date of the meeting at which votes are to be cast. Each Contractowner having
a voting  interest  in the  Separate  Account  will be sent  meeting  and  other
materials relating to the Fund.

      First Investors Life reserves the right to proceed other than as described
above,  including the right to vote shares of the Fund in its own right,  to the
extent permitted by law.


                   PURCHASES, DEDUCTIONS, CHARGES AND EXPENSES

      PURCHASE  PAYMENTS.  Investors  in Separate  Account A will be  purchasing
Accumulation  Units of  Separate  Account  A only and not  shares of the Fund in
which Separate Account A invests.

      The minimum  purchase  payment is $2,000 for a Deferred  Variable  Annuity
Contract.  Additional Payments under a Deferred Variable Annuity Contract in the
minimum  amount  of $200  may be made at any  time  after  the  issuance  of the
Contract.


      Initial purchase payments will be credited to a Contractowner's Account on
the  Valuation  Date they are received by First  Investors  Life,  provided that
First  Investors  Life has  received a duly  completed  application.  Additional
payments will be credited to a  Contractowner's  Account on the  Valuation  Date
they are received by First  Investors  Life. In the event First  Investors  Life
receives an incomplete  application,  all required information shall be provided
not later than five business days  following the receipt of such  application or
the  purchase  payment  will be  returned  to the  applicant  at the end of such
five-day period.

      Purchase payments,  after deductions for sales expenses and any applicable
Premium taxes (see  "Deductions from Purchase  Payments"),  will be allocated to
Separate  Account A based upon the next computed value of an  Accumulation  Unit
following  receipt  by First  Investors  Life at its  Executive  Office or other
designated  office.  Accumulation  Units are valued at the end of each Valuation
Date (i.e., as of the close of regular trading on the NYSE,  normally 4:00 p.m.,
Eastern Time).


      DEDUCTIONS  FROM PURCHASE  PAYMENTS.  First  Investors Life or FIC, as the
Underwriter,  makes  deductions,  in accordance  with the Deduction Table below,
from the  purchase  payment for  expenses  in  connection  with sales  functions
relative to the  Contracts.  Reductions in sales  charges are  applicable to the
total amount of the purchase payment.  In addition,  any Additional Payment made
after the issuance of a Deferred Annuity Contract is subject to the sales charge
applicable to the total amount of all purchase 


                                       7
<PAGE>

payments  previously made plus the amount of the Additional  Payment being made.
The sales charge is intended to cover all  expenses  relating to the sale of the
Contracts, including commissions paid to persons distributing the Contracts.

                                 DEDUCTION TABLE

                                         SALES CHARGE AS % OF    CONCESSION TO
                                       OFFERING   NET AMOUNT     DEALERS AS % OF
AMOUNT OF INVESTMENT                     PRICE*    INVESTED      OFFERING PRICE
- --------------------                   --------- ------------   ---------------
Less than $25,000....................    7.00%       7.53%            5.75%
$25,000 but under $50,000............    6.25        6.67             5.17
$50,000 but under $100,000...........    4.75        4.99             3.93
$100,000 but under $250,000..........    3.50        3.63             2.90
$250,000 but under $500,000..........    2.50        2.56             2.19
$500,000 but under $1,000,000........    2.00        2.04             1.67
$1,000,000 or over...................    1.50        1.52             1.24

- ----------
  *   Assumes that no Premium taxes have been deducted.


      EXCHANGE   PRIVILEGE.   First  Investors  Life  Variable  Annuity  Fund  C
("Separate Account C") is a segregated  investment account  established by First
Investors  Life which invests in shares of First  Investors  Life Series Fund, a
mutual  fund  composed of eleven  separate  series.  Contractowners  of Separate
Account A may exchange their Separate Account A Contracts for Separate Account C
Contracts.  The  Accumulated  Value of the Separate  Account A Contract  will be
invested at net asset value in one or more  Subaccounts  of Separate  Account C.
Although there is no charge for this exchange,  Contractowners  will be required
to execute a change of contract form which, in part, states that First Investors
Life  deducts a daily  charge  equal to an annual rate of 1.00% of the daily net
asset value of the  Subaccounts  as a charge for  mortality  and expense  risks.
Contractowners  are advised to read the Prospectus of Separate  Account C, which
may be obtained  free of charge from First  Investors  Life,  before  exchanging
Separate  Account A Contracts  for Separate  Account C Contracts.  This exchange
privilege may be modified or terminated at any time by First Investors Life.

      MORTALITY AND EXPENSE RISK  CHARGES.  Although the amount of each variable
annuity payment made to an Annuitant will vary in accordance with the investment
performance  of  Separate  Account A, the  amount  will not be  affected  by the
mortality  experience  (death rate) of persons receiving such payments or of the
general population. First Investors Life assumes this "mortality risk" by virtue
of annuity rates incorporated in the Contracts which cannot be changed.


      The  mortality  risk  assumed  by First  Investors  Life  arises  from its
obligation to continue to make fixed or variable annuity payments, determined in
accordance  with the annuity tables and other  provisions of the  Contracts,  to
each  Annuitant  regardless of how long that person lives and  regardless of how
long all payees as a group live.  This  assures an  Annuitant  that  neither the
Annuitant's own longevity nor an improvement in life  expectancy  generally will
have any adverse  effect on the variable  annuity  payments the  Annuitant  will
receive  under the  Contract,  and relieves  the  Annuitant of the risk that the
Annuitant  will  outlive  the  funds  that the  Annuitant  has  accumulated  for
retirement.  First Investors Life also assumes mortality risk as a result of its
guarantee of a minimum  payment in the event the Annuitant or the  Contractowner
named in the original  application  for the  Contract  dies prior to the Annuity
Commencement Date.


      In addition,  First  Investors  Life assumes the risk that the charges for
administrative  expenses may not be adequate to cover such  expenses and assures
that it will not increase the amount  charged for  administrative  expenses.  In
consideration  for its assumption of these  mortality and expense  risks,  First
Investors Life


                                       8
<PAGE>

deducts an amount equal on an annual basis to 0.75% of the daily net asset value
of Separate Account A. Of such charge,  approximately  0.60% is for assuming the
mortality risk and 0.15% is for assuming the expense risk.

      If the charge is  insufficient  to cover the actual cost of the  mortality
and expense risks,  the loss will fall on First Investors Life;  conversely,  if
the deduction proves more than sufficient,  the excess will be a profit to First
Investors Life. Any profits resulting to First Investors Life for over-estimates
of the actual  costs of the  mortality  and  expense  risks can be used by First
Investors  Life for any business  purpose,  including the payment of expenses of
distributing the Contracts, and will not remain in Separate Account A.

      ADMINISTRATIVE  CHARGE. An administrative  charge of $7.50 may be deducted
annually by First Investors Life from the Accumulated  Value of Deferred Annuity
Contracts  which have an  Accumulated  Value of less than  $1,500 due to partial
surrenders.  These  charges  against  Annuitant  accounts are for the purpose of
compensating  First Investors Life for expenses involved in administering  small
dormant  accounts.  If the actual expenses exceed charges,  First Investors Life
will bear the loss.

      OTHER CHARGES. Some states assess Premium taxes which presently range from
0% to 2.35% at the time Purchase  Payments are made; others assess Premium taxes
at the time of surrender or when annuity  payments  begin.  First Investors Life
currently  advances any Premium taxes due at the time Purchase Payments are made
and then deducts Premium taxes from the Accumulated Value of the Contract at the
time of surrender,  upon death of the Annuitant or when annuity  payments begin.
First Investors Life,  however,  reserves the right to deduct Premium taxes when
incurred. See Appendix I for Premium tax table.


      EXPENSES.  The total  expenses of  Separate  Account A for the fiscal year
ended December 31, 1996 amounted to $276,587 or 0.74% of its average net assets.
There are  deductions  from and expenses paid out of the assets of the Fund that
are described in the Prospectus for the Fund.


                           VARIABLE ANNUITY CONTRACTS

      This Prospectus  offers  individual  Deferred  Variable Annuity  Contracts
under  which  annuity  payments  will begin on a  selected  future  date.  First
Investors Life is offering the Contracts in states where it has the authority to
issue the Contracts.  The individual  Deferred Annuity Contracts offered by this
Prospectus are designed to provide  lifetime  annuity  payments to Annuitants in
accordance  with the plan  adopted by the  Contractowner.  The amount of annuity
payments will vary with the investment  performance  of Separate  Account A. The
Contracts obligate First Investors Life to make payments for the lifetime of the
Annuitant  in  accordance  with the annuity  rates  contained  in the  Contract,
regardless of actual mortality experience (see "Annuity Period"). Upon the death
of the Annuitant under a Contract before the Annuity  Commencement  Date,  First
Investors  Life will pay a death  benefit to the  beneficiary  designated by the
Annuitant. For a discussion of the amount and manner of payment of this benefit,
see "Death Benefit During the Accumulation Period."


      All or a portion of the  Accumulated  Value may be surrendered  during the
Accumulation  Period.  For a discussion on withdrawals  during the  Accumulation
Period,  see "Surrender and  Termination  (Redemption)  During the  Accumulation
Period."  For Federal  income tax  consequences  of a  withdrawal,  see "Federal
Income Tax Status." The exercise of Contract rights herein described,  including
the right to make a withdrawal during the Accumulation  Period,  will be subject
to the terms and  conditions  of any  qualified  trust or plan  under  which the
Contracts are purchased. This Prospectus contains no information concerning such
trust or plan.


      First Investors Life reserves the right to amend the Contracts to meet the
requirements  of the 1940  Act or  other  applicable  Federal  or state  laws or
regulations.

      Contractowners with any inquiries concerning their account should write to
First Investors Life Insurance  Company at its Executive Office, 95 Wall Street,
New York, New York 10005.


                                       9
<PAGE>

DEFERRED VARIABLE ANNUITIES--ACCUMULATION PERIOD


Crediting  Accumulation  Units.  During the  Accumulation  Period,  net purchase
payments on Deferred Annuity Contracts,  after deductions for sales expenses and
any Premium taxes,  where applicable (see "Deductions from Purchase  Payments"),
are credited to the  Contractowner's  Account in the form of Accumulation Units.
The number of  Accumulation  Units  credited  to a  Contractowner  for  Separate
Account A is determined by dividing the net purchase  payment by the value of an
Accumulation  Unit for Separate  Account A based upon the next computed value of
an  Accumulation  Unit  following  receipt  of the  purchase  payment  by  First
Investors Life at its Executive Office or other designated  office. The value of
the  Contractowner's  Individual  Account varies with the value of the assets of
Separate  Account  A. The  investment  performance  of the  Fund,  expenses  and
deduction of certain charges affect the value of an Accumulation  Unit. There is
no assurance that the value of a Contractowner's  Individual  Account will equal
or exceed purchase payments.  The value of a Contractowner's  Individual Account
for a Valuation  Period can be  determined  by  multiplying  the total number of
Accumulation  Units credited to the account for Separate  Account A by the value
of an Accumulation Unit for Separate Account A for the Valuation Period.


ANNUITY PERIOD


      COMMENCEMENT DATE. Annuity payments will begin on the Annuity Commencement
Date selected by the Contractowner.  Not later than 30 days prior to the Annuity
Commencement  Date, the  Contractowner  may elect in writing to advance or defer
the Annuity Commencement Date. The Annuity Commencement Date may not be deferred
beyond  the first day of the  calendar  month  following  the  Annuitant's  85th
birthday, or 90th birthday, where such later date is permitted. If no other date
is elected,  annuity  payments  will  commence on the first day of the  calendar
month  following the  Annuitant's  85th birthday,  or 90th birthday,  where such
later date is permitted.


      If the Net Accumulated Value on the Annuity Commencement Date is less than
$2,000,  First  Investors  Life may pay such value in one sum in lieu of annuity
payments.  If the Net Accumulated Value is not less than $2,000 but the variable
annuity payments  provided for would be or become less than $20, First Investors
Life may change the  frequency  of annuity  payments to such  intervals  as will
result in payments of at least $20.

      ASSUMED  INVESTMENT RATE. A 3.5% assumed investment rate is built into the
Annuity Tables in the Contract.  This is based on First Investors Life's opinion
that it is the average  result to be expected  from a  diversified  portfolio of
common stocks during a relatively stable economy. A higher assumption would mean
a higher  initial  payment  but more  slowly  rising  and more  rapidly  falling
subsequent variable annuity payments. A lower assumption would have the opposite
effect. If the actual net investment rate of Separate Account A is at the annual
rate of 3.5%, the variable annuity payments will be level. A fixed annuity is an
annuity with annuity payments which remain fixed as to dollar amount  throughout
the  payment  period and is based on an assumed  interest  rate of 3.5% per year
built into the Annuity Tables in the Contract.

      ANNUITY OPTIONS. The Contractowner may, at any time at least 30 days prior
to the Annuity  Commencement Date upon written notice to First Investors Life at
its Executive  Office or other  designated  office,  elect to have payments made
under any one of the Annuity Options provided in the Contract. If no election is
in effect on the Annuity  Commencement  Date, annuity payments will be made on a
variable basis only under Annuity Option 3 below,  Life Annuity with 120 Monthly
Payments Guaranteed, which is the Basic Annuity.

      The material  factors that determine the level of annuity benefits are (i)
the value of a  Contractowner's  Individual  Account  determined  in the  manner
described in this Prospectus before the Annuity


                                       10
<PAGE>

      Commencement  Date, (ii) the Annuity Option selected by the Contractowner,
(iii) the sex and adjusted age of the Annuitant  and any Joint  Annuitant at the
Annuity  Commencement  Date  and  (iv) in the case of a  variable  annuity,  the
investment performance of the Fund.

      On the Annuity  Commencement  Date,  First  Investors Life shall apply the
Accumulated  Value,  reduced  by any  applicable  Premium  taxes not  previously
deducted,  to  provide  the Basic  Annuity  or, if an  Annuity  Option  has been
elected, to provide one of the Annuity Options described below.


      The Contracts provide for the six Annuity Options described below:

      Option 1 - LIFE ANNUITY - An annuity  payable  monthly during the lifetime
of the  Annuitant,  ceasing  with the last payment due prior to the death of the
Annuitant.  If this Option is elected,  annuity payments terminate automatically
and  immediately  on the death of the Annuitant  without regard to the number or
total amount of payments received.

      Option 2a - JOINT AND SURVIVOR LIFE ANNUITY - An annuity  payable  monthly
during  the  joint  lifetime  of the  Annuitant  and  the  Joint  Annuitant  and
continuing thereafter during the lifetime of the survivor, ceasing with the last
payment due prior to the death of the survivor.


      Option 2b - JOINT AND  TWO-THIRDS  TO SURVIVOR  LIFE  ANNUITY - An annuity
payable monthly during the lifetime of the Annuitant and the Joint Annuitant and
continuing  thereafter during the lifetime of the survivor at an amount equal to
two-thirds of the joint annuity payment, ceasing with the last payment due prior
to the death of the survivor.


      Option 2c - JOINT AND  ONE-HALF  TO  SURVIVOR  LIFE  ANNUITY - An  annuity
payable  monthly  during  the  joint  lifetime  of the  Annuitant  and the Joint
Annuitant and  continuing  thereafter  during the lifetime of the survivor at an
amount  equal to one-half of the joint  annuity  payment,  ceasing with the last
payment due prior to the death of the survivor.

      Under  Annuity  Options  2a,  2b  and  2c,  annuity   payments   terminate
automatically  and immediately on the deaths of both the Annuitant and the Joint
Annuitant without regard to the number or total amount of payments received.

      Option 3 - LIFE ANNUITY WITH 60, 120 OR 240 MONTHLY PAYMENTS  GUARANTEED -
An  annuity  payable  monthly  during the  lifetime  of the  Annuitant  with the
guarantee that if, upon the death of the Annuitant,  payments have been made for
less than 60, 120 or 240 monthly periods,  as elected,  payments will be made as
follows:

           1. Any  guaranteed  annuity  payments  will be  continued  during the
      remainder of the selected period to the Beneficiary.  The Beneficiary may,
      at any time,  elect to have the present value of the guaranteed  number of
      annuity payments  computed in the manner specified in (2) below, paid in a
      lump sum.

           2. If a Beneficiary receiving annuity payments under this Option dies
      after the death of the Annuitant,  the present  value,  computed as of the
      Valuation  Period in which notice of death of the  Beneficiary is received
      by First  Investors  Life at its  Executive  Office  or  other  designated
      office,  of the  guaranteed  number of annuity  payments  remaining  after
      receipt of such notice and to which such deceased  Beneficiary  would have
      been  entitled had the  Beneficiary  not died,  computed at the  effective
      annual interest rate, assumed in determining the Annuity Tables,  shall be
      paid in a lump sum in accordance with the Contract.

      Option 4 - UNIT REFUND LIFE ANNUITY - An annuity  payable  monthly  during
the lifetime of the  Annuitant,  terminating  with the last payment due prior to
the death of the Annuitant.  An additional  annuity  payment will be made to the
Beneficiary equal to the Annuity Unit Value of Separate Account A as of the date


                                       11
<PAGE>

that  notice of death in  writing is  received  by First  Investors  Life at its
Executive Office or other designated  office,  multiplied by the excess, if any,
of (a) over (b) where (a) is the Net  Accumulated  Value  allocated  to Separate
Account A and applied under the option at the Annuity Commencement Date, divided
by the corresponding Annuity Unit Value as of the Annuity Commencement Date, and
(b) is the  product of the number of Annuity  Units  applicable  under  Separate
Account A represented by each annuity payment and the number of annuity payments
made. (For an illustration of this  calculation,  see Appendix II, Example A, in
the Statement of Additional Information.)

      ALLOCATION  OF  ANNUITY.  The  Contractowner  may  elect  to have  the Net
Accumulated  Value applied at the Annuity  Commencement  Date to provide a Fixed
Annuity,  a Variable  Annuity,  or any  combination  thereof.  After the Annuity
Commencement Date, no transfers or redemptions are allowed.  Such elections must
be made in  writing to First  Investors  Life at its  Executive  Office or other
designated  office, at least 30 days prior to the Annuity  Commencement Date. In
the absence of an election,  annuity  payments will be made on a variable  basis
only under  Annuity  Option 3 above,  Life  Annuity  with 120  monthly  payments
guaranteed, which is the Basic Annuity.

DEATH BENEFIT DURING THE ACCUMULATION PERIOD

      If the  Annuitant  dies  prior to the  Annuity  Commencement  Date,  First
Investors  Life will pay a Death  Benefit to the  Beneficiary  designated by the
Contractowner  upon receipt of a death certificate or similar proof of the death
of the  Annuitant.  The value of the Death  Benefit will be determined as of the
Valuation Date on or next following the date on which written notice of death is
received by First  Investors  Life at its Executive  Office or other  designated
office.


      If payment of the Death Benefit  under one of the Annuity  Options was not
elected by the Contractowner prior to the Annuitant's death, the Beneficiary may
elect to have the Death  Benefit  paid in a single  sum or applied to provide an
annuity  under one of the Annuity  Options or as  otherwise  permitted  by First
Investors Life. If a single sum settlement is requested, the amount of the Death
Benefit plus any interest at the current  settlement  option rate then in effect
will be paid  within  seven days of receipt  of such  election  and due proof of
death. If an Annuity Option is desired,  election may be made by the Beneficiary
during a ninety-day  period  commencing with the date of receipt of notification
of death.  If such an election is not made, a single sum settlement will be made
to the Beneficiary at the end of such ninety-day  period.  If any Annuity Option
is elected,  the Annuity  Commencement  Date shall be the date  specified in the
election but no later than ninety days after receipt by First  Investors Life of
notification of death.


      The  amount  of the Death  Benefit  will be the  greater  of (1) the gross
purchase  payments (prior to any deductions or charges) made under an Individual
Contract  less  any  amount  of  purchase  payments  surrendered,   or  (2)  the
Accumulated Value.

SURRENDER AND TERMINATION (REDEMPTION) DURING THE ACCUMULATION PERIOD


      A  Contractowner  may elect, at any time before the earlier of the Annuity
Commencement  Date or the death of the Annuitant,  to surrender the Contract for
all or any part of the  Contractowner's  Individual  Account.  In the event of a
termination of the Contract,  First  Investors Life will,  upon due surrender of
the Contract at the Executive Office of First Investors Life or other designated
office, pay to the Contractowner the Accumulated Value of the Contract.  If only
a portion of the amount of the Contractowner's  Individual Account is requested,
the amount so requested shall be deducted from Separate Account A resulting in a
corresponding  reduction  in the number of  Accumulation  Units  credited to the
Contractowner  in  Separate  Account A. For any partial or full  surrender,  the
deduction  will be based upon the next computed  value of an  Accumulation  Unit
following receipt of the request by First Investors Life at its Executive Office
or other designated office.  First Investors Life may defer any such payment for
a period of not more than seven days. However, First Investors Life may postpone
such  payment  during any period when (a) trading on the NYSE is  restricted  as
determined  by the  Commission or the NYSE is closed for other than weekends and
holidays,  (b) the Commission has by order  permitted such  suspension or (c) an
emergency,  as defined by the rules of the 



                                       12
<PAGE>

Commission,  exists  during  which  time the  sale of  portfolio  securities  or
calculation of securities is not reasonably  practicable.  For information as to
Federal tax  consequences  resulting from  surrenders,  see "Federal  Income Tax
Status."  For  information  as to State  Premium  tax  consequences,  see "Other
Charges" and "Appendix I."


      MATURITY DATE EXCHANGE  PRIVILEGE.  If this Contract is liquidated  during
the one-year period  preceding its maturity date ("Annuity  Commencement  Date")
the proceeds can be used to purchase  Class A shares of First  Investors  mutual
funds without incurring a sales charge.


DEATH OF CONTRACTOWNER

      If the  Contractowner  dies before the entire interest in the Contract has
been  distributed,  the  value  of  the  Contract  must  be  distributed  to the
Beneficiary as provided below so that the Contract qualifies as an annuity under
Section 72(s) of the Internal Revenue Code of 1986, as amended (the "Code").

      If the death of the Contractowner occurs prior to the Annuity Commencement
Date,  the  entire  interest  in the  Contract  will be (1)  distributed  to the
Beneficiary  within  five  years,  or (2)  distributed  under an Annuity  Option
beginning within one year which provides that annuity payments will be made over
a period not longer than the life or life expectancy of the Beneficiary.  If the
Contract  is payable to (or for the benefit  of) the  Contractowner's  surviving
spouse, no distributions will be required and the Contract may be continued with
the surviving spouse as the new Contractowner.  If the Contractowner is also the
Annuitant,  such spouse shall have the right to become the  Annuitant  under the
Contract. Likewise, if the Annuitant dies and the Contractowner is not a natural
person,  the  Annuitant's  surviving  spouse  shall have the right to become the
Contractowner and the Annuitant.

TEN-DAY REVOCATION RIGHT

      A  Contractowner  may,  within  ten days  from the  date the  Contract  is
delivered to the  Contractowner,  elect to cancel the Contract.  First Investors
Life will,  upon surrender of the Contract,  together with a written request for
cancellation,  at  the  Executive  Office  of  First  Investors  Life  or  other
designated  office,  pay to the Contractowner an amount equal to the Accumulated
Value of the  Contract  on the date of  surrender  plus the  amount of any sales
charges  deducted  from the initial  purchase  payment.  The amount  refunded to
Contractowners may be more or less than their initial purchase payment depending
on the  investment  results of Separate  Account A. In those states where a full
refund of premiums is required if the Contractowner elects to exercise to cancel
the Contract under the ten-day  revocation  right, such  Contractowner  shall be
entitled to a full refund of premiums paid upon such cancellation.

                            FEDERAL INCOME TAX STATUS


      The Contracts are designed for use by individuals who desire to accumulate
capital on a tax-deferred basis for retirement or other long-term purposes.  The
Contracts  may be purchased  on a  nonqualified  basis or through the  following
retirement  plans  qualified  for  special  tax  treatment  under  the  Code (1)
individual  retirement accounts and (2) qualified corporate employee pension and
profit sharing plans.


      In general,  a Contract acquired by a person who is not an individual will
be treated as one which is not an  annuity to the extent of  contributions  made
after February 28, 1986, and any income credited to a Contractowner's Individual
Account will accordingly be includable in the Contractowner's  gross income on a
current  basis in  accordance  with  that  person's  method of  accounting.  The
preceding  sentence will not apply to any annuity  contract that is (i) acquired
by a  decedent's  estate by reason of the  decedent's  death,  (ii) held under a
qualified  pension,  profit-sharing  or stock bonus plan described under Section
401(a) of the Code or an employee annuity program described under Section 403(a)
of the Code (or that is purchased by an employer  upon the  termination  of such
plan or program and that is held by the employer until all amounts under a


                                       13
<PAGE>

Contract are  distributed to the employee for whom the Contract was purchased or
the employee's  beneficiary),  (iii) held under an individual retirement plan or
an employee annuity program  described under Section 403(b) of the Code, or (iv)
an immediate annuity (as defined in Section 72(u)(4) of the Code).

      The ultimate  effect of Federal  income taxes on  Accumulated  Values,  on
annuity payments and on the economic benefit to the Contractowner,  Annuitant or
Beneficiary  depends  on the tax  status of both  First  Investors  Life and the
individual  concerned.  The discussion contained herein is general in nature and
is not  intended as tax advice.  No attempt is made to consider  any  applicable
state or other tax laws.  Moreover,  the  discussion  herein is based upon First
Investors Life's  understanding of Federal income tax laws as they are currently
interpreted.  No representation is made regarding the likelihood of continuation
of  current  Federal  income  tax  laws or the  current  interpretations  of the
Internal Revenue Service.  Prospective  Contractowners  should consult their tax
advisors as to the tax consequences of purchasing Contracts.

      First Investors Life is taxed as a life insurance  company under the Code.
Since Separate  Account A is not a separate entity from First Investors Life and
its  operation  forms  part  of  First  Investors  Life,  it will  not be  taxed
separately as a "regulated  investment  company" under Subchapter M of the Code.
Under existing Federal income tax law,  investment income of Separate Account A,
to the extent that it is applied  (after taking into account the mortality  risk
and expense risk charges) to increase reserves under the Contract,  is not taxed
and may be  compounded  through  reinvestment  without  additional  tax to First
Investors  Life to the extent income is so applied.  Thus,  the Fund may realize
net investment  income and pay dividends and Separate  Account A may receive and
reinvest  them on behalf of  Contractowners,  all  without  Federal  income  tax
consequences for Separate Account A or the Contractowner.


      Under  current  interpretations  of the  Code,  the  Contractowner  is not
subject  to  income  tax on  increases  in  the  value  of  the  Contractowner's
Individual  Account until payments are received by the  Contractowner  under the
Contract.  Annuity payments received after the Annuity Commencement Date will be
taxed to the  Contractowner  as ordinary income in accordance with Section 72 of
the  Code.   However,   that  portion  of  each  payment  which  represents  the
Contractowner's  investment in the Contract,  which is ordinarily  the amount of
purchase  payments  made under the Contract  with certain  adjustments,  will be
excluded  from gross  income.  The  investment in the Contract is divided by the
Contractowner's  life expectancy or other period for which annuity  payments are
expected  to be  made,  in the case of  variable  annuity  payments,  and by the
expected return, in the case of fixed annuity payments,  to determine the annual
exclusion.  Annuity  payments  received  each  year in  excess  of  this  annual
exclusion are taxable as ordinary income as provided in Section 72 of the Code.


      In order that the Contracts be treated as annuities for Federal income tax
purposes,  other than Contracts  issued in connection with retirement plans that
are  qualified  under  the  Code,   Separate  Account  A  must  satisfy  certain
diversification  requirements that are generally  applicable to variable annuity
contract segregated asset accounts under Subchapter L of the Code.  Ownership by
Separate  Account  A of  shares  of the Fund  will not fail the  diversification
requirements  provided that the Fund is taxed as a regulated  investment company
under  Subchapter  M of the Code,  and that the Fund meets such  diversification
requirements,  and all shares of the Fund are owned only by  Separate  Account A
(and similar accounts of First Investors Life or other insurance companies), and
access to the Fund is  available  exclusively  through the purchase of Contracts
(and additional  variable annuity or life insurance  products of First Investors
Life or other insurance companies).  Fund shares also may be held by the Adviser
provided  such  shares  are  being  held in  connection  with  the  creation  or
management  of the Fund.  The Adviser does not intend to sell any Fund shares it
owns to the  general  public.  It is expected  that the  Adviser  will cause the
assets  of the Fund to be  invested  in a manner  that  complies  with the asset
diversification requirements.


      The tax law does not currently  provide  guidance as to  circumstances  in
which a  Contractowner  may be said to have  "control"  over Separate  Account A
assets  and thus be  subject  to  current  taxation  on income  credited  to the
Contractowner's  Contract.  The Treasury Department has said that it may provide
such



                                       14
<PAGE>


guidance  by a ruling  or  regulation.  It is not  clear  what  this  additional
guidance would provide,  nor whether it would be applied on a retroactive basis.
First  Investors  Life  reserves  the  right  to  amend  the  Contracts  in  any
appropriate way and take other action necessary to avoid such current taxation.

      With respect to withdrawals before the start of annuity payments, the Code
currently provides that: (i) withdrawals from an annuity contract are taxable as
ordinary  income  in the year of  receipt  to the  extent  that  the  Contract's
Accumulated Value exceeds the investment in the Contract,  (ii) a loan under, or
an assignment or pledge of an annuity contract is treated as a distribution, and
(iii) a 10 percent penalty will be assessed,  subject to certain exceptions,  on
the taxable  portion of withdrawals  made prior to the taxpayer's  attainment of
age 59 1/2.

      In determining the amount of any distribution  that is includable in gross
income,   all  annuity  contracts  issued  by  the  same  company  to  the  same
Contractowner  during any calendar year will be treated as one annuity contract.
Contractowners should consult their tax advisors before purchasing more than one
Contract during any calendar year.


      Under the Code, income tax must generally be withheld from all "designated
distributions."  A designated  distribution  includes the taxable portion of any
distribution  or payment  from an  annuity.  A partial  surrender  of an annuity
contract is considered a distribution subject to withholding.

      The amount of  withholding  depends on the type of payment:  "periodic" or
"non-periodic."  For a periodic payment (e.g., an annuity  payment),  unless the
recipient files an appropriate  withholding  certificate,  the tax withheld from
the taxable  portion of the payment is based on a payroll  withholding  schedule
which assumes a married recipient claiming three withholding  exemptions.  For a
non-periodic  payment  distribution  (e.g.,  a partial  surrender  of an annuity
contract),  the tax withheld will generally be 10 percent of the taxable portion
of the payment.

      A  recipient  may  elect  not to have the  withholding  rules  apply.  For
periodic  payments,  an election is effective for the calendar year for which it
is made and for each necessary year until amended or modified.  For non-periodic
distributions,  an election is effective only for the  distribution for which it
is made.  Payors  must notify  recipients  of their right to elect to have taxes
withheld.

      Insurers are required to report all  designated  distribution  payments to
the Internal Revenue Service.

      With respect to the  Contracts  issued in  connection  with  retirement or
deferred compensation plans which do not meet the requirements applicable to tax
qualified plans, the tax status of the Annuitant is determined by the provisions
of the plan. In general, the Annuitant is not taxed until the Annuitant receives
annuity payments.  The rules for taxation of payments under  non-qualified plans
are, in  general,  similar to those for  taxation of payments  under a qualified
plan; however, the special income averaging treatment available for certain lump
sum payments under qualified  plans is not available for similar  payments under
non-qualified plans.

      It should  be noted  that the laws and  regulations  with  respect  to the
foregoing  tax matters  are  subject to change at any time by  Congress  and the
Treasury Department, respectively, and that the interpretations of such laws and
regulations  now in effect are subject to change by judicial  decision or by the
Treasury Department.

                             PERFORMANCE INFORMATION

      From time to time,  Separate  Account  A may  advertise  several  types of
performance information,  including yield, average annual total return and total
return.  Each of these  figures is based  upon  historical  earnings  and is not
necessarily representative of the future performance of Separate Account A.


                                       15
<PAGE>

      Average annual total return and total return calculations  measure the net
income of  Separate  Account A plus the  effect of any  realized  or  unrealized
appreciation or depreciation of the underlying investments in Separate Account A
for the period in question.  Average annual total return will be quoted for one,
five and ten year periods, or for shorter time periods depending upon the length
of time during  which  Separate  Account A has  operated.  Average  annual total
return  figures are  annualized  and,  therefore,  represent the average  annual
percentage  change in the value of an investment in Separate  Account A over the
period in question.  Total return  figures are not  annualized and represent the
actual  percentage  change over the period in  question.  Average  annual  total
return and total return  figures will include the  deduction of all expenses and
fees, including the payment of the maximum sales charge of 7.00% and the payment
of the Mortality and Expense Risk fee of 0.75%.

      Yield is a measure of the net dividend and interest  income  earned over a
specific one month or 30-day  period  expressed as a percentage  of the value of
Separate Accounts A's Accumulation  Units. Yield is an annualized figure,  which
means that it is assumed that Separate Account A generates the same level of net
income over a one-year period which is compounded on a semi-annual basis.

      For further  information on  performance  calculations,  see  "Performance
Information" in the Statement of Additional Information.



                                       16
<PAGE>

                                TABLE OF CONTENTS
                         OF THE STATEMENT OF ADDITIONAL
                                   INFORMATION


       ITEM                                                            PAGE
       ----                                                            ----
    General Description...............................................  2
    Services..........................................................  2
    Annuity Payments..................................................  3
    Other Information.................................................  5
    Performance Information...........................................  5
    Relevance of Financial Statements.................................  7
    Appendices........................................................  8
    Financial Statements..............................................  13


                                   APPENDIX I

                             STATE AND LOCAL TAXES*


Alabama.....................  1.00%         Mississippi................. 2.00%
Alaska......................     --         Missouri....................  --
Arizona.....................     --         Nebraska....................  --
Arkansas....................     --         New Jersey..................  --
California..................  2.35          New Mexico..................  --
Colorado....................     --         New York....................  --
Connecticut.................     --         North Carolina..............  --
Delaware....................     --         Ohio........................  --
District of Columbia........  2.25          Oklahoma....................  --
Florida.....................     --         Oregon......................  --
Georgia.....................     --         Pennsylvania................  --
Illinois....................     --         Rhode Island................  --
Indiana.....................     --         South Carolina..............  --
Iowa........................     --         Tennessee...................  --
Kentucky....................  2.00          Texas.......................  --
Louisiana...................     --         Utah........................  --
Maryland....................     --         Virginia....................  --
Massachusetts...............     --         Washington..................  --
Michigan....................     --         West Virginia............... 1.00
Minnesota...................     --         Wisconsin...................  --
                                            Wyoming..................... 1.00

   Note:  The foregoing  rates are subject to amendment by  legislation  and the
   applicability   of  the  stated  rates  may  be  subject  to   administrative
   interpretation.

* Includes local annuity Premium taxation.


<PAGE>


FIRST INVESTORS SPECIAL BOND FUND, INC.

95 Wall Street, New York, N.Y.  10005/(212) 858-8200

      This is a Prospectus for First Investors Special Bond Fund, Inc. ("Fund"),
an open-end diversified  management investment company.  Investments in the Fund
are only available through the purchase of Individual Variable Annuity Contracts
("Contracts") issued by First Investors Life Insurance Company ("First Investors
Life").  Purchase payments for the Contracts,  net of certain expenses, are paid
into a unit  investment  trust,  First  Investors  Life Variable  Annuity Fund A
("Separate  Account  A").  Separate  Account A uses these  proceeds  to purchase
shares of the Fund.  Investments in the Fund are used to fund benefits under the
Contracts.

      The Fund  primarily  seeks  high  current  income  without  undue  risk to
principal and  secondarily  seeks growth of capital by  investing,  under normal
market  conditions,  at least 65% of its total  assets in high yield,  high risk
securities.  There can be no  assurance  the Fund will  achieve  its  investment
objectives.  INVESTMENTS IN HIGH YIELD, HIGH RISK SECURITIES,  COMMONLY REFERRED
TO AS "JUNK BONDS," MAY ENTAIL RISKS THAT ARE DIFFERENT OR MORE  PRONOUNCED THAN
THOSE  INVOLVED IN  HIGHER-RATED  SECURITIES.  SEE "HIGH YIELD  SECURITIES--RISK
FACTORS."


      This Prospectus sets forth concisely the information about the Fund that a
prospective  investor  should know before  investing  and should be retained for
further  reference.   First  Investors  Management  Company,  Inc.  ("FIMCO"  or
"Adviser")  serves as investment  adviser to the Fund. A Statement of Additional
Information  ("SAI"),  dated April 30, 1997 (which is  incorporated by reference
herein), has been filed with the Securities and Exchange Commission.  The SAI is
available  at no charge  upon  request to the Fund at the  address or  telephone
number indicated above.



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



                  The date of this Prospectus is April 30, 1997


<PAGE>

                              FINANCIAL HIGHLIGHTS

      The following  table sets forth the per share operating  performance  data
for a share  outstanding,  total return,  ratios to average net assets and other
supplemental  data for each year  indicated.  The table  has been  derived  from
financial  statements  which  have  been  examined  by  Tait,  Weller  &  Baker,
independent  certified public  accountants,  whose report thereon appears in the
Statement of Additional  Information ("SAI"). This information should be read in
conjunction with the Financial  Statements and Notes thereto,  which also appear
in the SAI, available at no charge upon request to the Fund.


                                       2
<PAGE>

<TABLE>

<CAPTION>
                                                        ------------------------------------------------------------------------
                                                                                                Year Ended December 31
                                                        ------------------------------------------------------------------------

                                                        1996       1995       1994      1993       1992      1991        1990 
                                                        ----       ----       ----      ----       ----      ----        ----
<S>                                                    <C>        <C>        <C>       <C>        <C>         <C>       <C>

Net Asset Value, Beginning of Year...............      $12.23     $11.03     $12.18    $11.38     $11.05      $9.16     $11.47  
                                                      -------    -------    -------   -------    -------   --------    -------  

Income from Investment Operations
Net investment income............................        1.17       1.20       1.09      1.14       1.27       1.26       1.32  
Net realized and unrealized
 gain (loss) on investments......................         .37       1.02      (1.22)      .86        .29       1.86      (2.30) 
                                                      -------    -------    -------   -------    -------   --------    -------  

   Total from Investment Operations..............        1.54       2.22      (.13)      2.00       1.56       3.12      (.98)  
                                                      -------    -------    -------   -------    -------   --------    -------  

Less Distributions from:
   Net investment income.........................        1.02       1.02       1.02      1.20       1.23       1.23       1.33  
   Net realized gain from investments............          -          -          -          -          -          -          -  
   Capital surplus...............................          -          -          -          -          -          -          -  
                                                      -------    -------    -------   -------    -------   --------    -------  
   Total Distributions...........................        1.02       1.02       1.02      1.20       1.23       1.23       1.33  
                                                      -------    -------    -------   -------    -------   --------    -------  


Net Asset Value, End of Year.....................      $12.75     $12.23     $11.03    $12.18     $11.38     $11.05      $9.16  
                                                      =======    =======    =======   =======    =======    =======    =======  

TOTAL RETURN(%)+.................................       13.10      20.76      (1.00)    18.15      14.56      35.76      (9.18) 
- ----------------

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in thousands)...........    $36,948    $38,037    $36,725    $43,056    $44,116    $50,914     $53,328 


Ratios to Average Net Assets (%)
Expenses.........................................         .86        .88        .87       .85        .88        .89        .86  
Net investment income............................        9.31      10.17       9.38      9.54      10.95      11.99      12.57  


Portfolio Turnover Rate (%)......................          29         45         54        79         65         47         37  

<CAPTION>
                                                        ----------------------------
                                                          Year Ended December 31
                                                        ----------------------------

                                                         1989       1988      1987
                                                         ----       ----      ----
<S>                                                    <C>        <C>       <C>
Net Asset Value, Beginning of Year...............       $13.19     $12.99    $14.37
                                                       -------    -------   -------

Income from Investment Operations
Net investment income............................         1.57       1.61      1.57
Net realized and unrealized
 gain (loss) on investments......................        (1.73)       .20     (1.15)
                                                       -------    -------   -------

   Total from Investment Operations..............        (.16)       1.81       .42
                                                       -------    -------   -------

Less Distributions from:
   Net investment income.........................         1.56       1.61      1.58
   Net realized gain from investments............            -          -       .19
   Capital surplus...............................            -          -       .03
                                                       -------    -------   -------
   Total Distributions...........................         1.56       1.61      1.80
                                                       -------    -------   -------


Net Asset Value, End of Year.....................       $11.47     $13.19    $12.99
                                                       =======    =======   =======

TOTAL RETURN(%)+.................................        (1.60)     14.43      2.74
- ----------------

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in thousands)...........      $85,719    $69,641   $43,965


Ratios to Average Net Assets (%)
Expenses.........................................          .82        .84       .86
Net investment income............................        12.38      11.96     11.16


Portfolio Turnover Rate (%)......................           34         51        71
</TABLE>



- ----------
+ The effect of fees and charges  incurred at the separate account level are not
reflected in these performance figures.



                                       3
<PAGE>

                       INVESTMENT OBJECTIVES AND POLICIES

      The Fund  primarily  seeks  high  current  income  without  undue  risk to
principal and secondarily seeks growth of capital. The Fund seeks to achieve its
objectives by investing,  under normal  market  conditions,  at least 65% of its
total assets in high yield, high risk securities,  commonly referred to as "junk
bonds" ("High Yield  Securities").  High Yield Securities  include the following
instruments: fixed, variable or floating rate debt obligations (including bonds,
debentures  and notes) which are rated below Baa by Moody's  Investors  Service,
Inc. ("Moody's") or below BBB by Standard & Poor's Ratings Group ("S&P"), or are
unrated and deemed to be of comparable quality by the Adviser;  preferred stocks
and  dividend-paying  common stocks that have yields comparable to those of high
yielding debt securities;  any of the foregoing securities of companies that are
financially  troubled,  in default or undergoing  bankruptcy  or  reorganization
("Deep Discount  Securities");  and any securities  convertible  into any of the
foregoing.

      The Fund may invest up to 5% of its total assets in debt securities issued
by foreign  governments  and  companies  located  outside the United  States and
denominated  in U.S.  or foreign  currency.  The Fund also may borrow  money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets,
make loans of  portfolio  securities  and invest in zero coupon and  pay-in-kind
securities. See the SAI for more information concerning these securities.

      The  Fund  may  invest  up to 35% of its  total  assets  in the  following
instruments: common and preferred stocks, other than those considered to be High
Yield Securities; debt obligations of all types (including bonds, debentures and
notes)  rated A or  better  by  Moody's  or S&P;  securities  issued by the U.S.
Government or its agencies or instrumentalities ("U.S. Government Obligations");
warrants and money market  instruments  consisting  of prime  commercial  paper,
certificates of deposit of domestic branches of U.S. banks, bankers' acceptances
and repurchase agreements; purchase securities on a "when-issued" basis.

      In any  period of  market  weakness  or of  uncertain  market or  economic
conditions,  the Fund may establish a temporary  defensive  position to preserve
capital by having all or part of its assets  invested in  investment  grade debt
securities or retained in cash or cash equivalents,  including bank certificates
of deposit,  bankers'  acceptances,  U.S. Government  Obligations and commercial
paper  issued  by  domestic  corporations.  See  the SAI  for  more  information
concerning these securities.

      The medium- to lower-rated, and certain of the unrated securities in which
the Fund invests, tend to offer higher yields than higher-rated  securities with
the same maturities because the historical financial condition of the issuers of
such securities may not be as strong as that of other issuers.  Debt obligations
rated lower than A by Moody's or S&P tend to have speculative characteristics or
are speculative, and generally involve more risk of loss of principal and income
than  higher-rated  securities.  Also,  their  yields and  market  value tend to
fluctuate   more  than  higher  quality   securities.   The  greater  risks  and
fluctuations  in yield and value  occur  because  investors  generally  perceive
issuers of lower-rated  and unrated  securities to be less  creditworthy.  These
risks  cannot be  eliminated,  but may be reduced by  diversifying  holdings  to
minimize  the  portfolio   impact  of  any  single   investment.   In  addition,
fluctuations  in market value do not affect the cash income from the securities,
but are  reflected  in the  computation  of the  Fund's  net asset  value.  When
interest  rates rise,  the net asset value of the Fund tends to  decrease.  When
interest rates decline, the net asset value of the Fund tends to increase.

      Variable or floating  rate debt  obligations  in which the Fund may invest
periodically   adjust  their  interest  rates  to  reflect   changing   economic
conditions.  Thus,  changing economic  conditions  specified by the terms of the
security  would serve to change the interest rate and the return  offered to the
investor.  This  reduces  the  effect  of  changing  market  conditions  on  the
security's underlying market value.


                                       4
<PAGE>

      A High Yield Security may itself be convertible  into or exchangeable  for
equity  securities,  or may carry with it the right to acquire equity securities
evidenced  by warrants  attached  to the  security or acquired as part of a unit
with the security. Although the Fund invests primarily in High Yield Securities,
securities  received  upon  conversion  or exercise of warrants  and  securities
remaining  upon the break-up of units or  detachment of warrants may be retained
to permit orderly disposition, and to establish a long-term holding basis.

      Because of the greater  number of  investment  considerations  involved in
investing in High Yield  Securities,  the  achievement of the Fund's  investment
objectives  depends more on the Adviser's  research  abilities than would be the
case if the Fund were  investing  primarily  in  securities  in the higher rated
categories.  Because medium- to lower-rated securities generally involve greater
risks of loss of income and principal than  higher-rated  securities,  investors
should  consider  carefully the relative risks  associated  with  investments in
securities  that carry medium to lower  ratings or are unrated.  See "High Yield
Securities--Risk  Factors" and Appendix A for a  description  of corporate  bond
ratings.

      The Fund actively  seeks to achieve its secondary  objective to the extent
consistent with its primary  objective.  There can be no assurance that the Fund
will be able to achieve its  investment  objectives.  The Fund's net asset value
fluctuates  based mainly upon changes in the value of its portfolio  securities.
The Fund's investment objectives and certain investment limitations set forth in
the SAI are  fundamental  policies that may not be changed  without  shareholder
approval.


      The dollar  weighted  average  of credit  ratings of all bonds held by the
Fund during the 1996 fiscal  year,  computed on a monthly  basis,  are set forth
below.  This information  reflects the average  composition of the Fund's assets
during the 1996 fiscal year and is not necessarily representative of the Fund as
of the end of its 1996 fiscal year, the current fiscal year or at any other time
in the future.

                                                        COMPARABLE QUALITY
                                                       OF UNRATED SECURITIES
                         RATED BY MOODY'S            TO BONDS RATED BY MOODY'S
                         ----------------            -------------------------

         AA                     0.16%                         0%
         Ba                    19.16                          0
         B                     66.62                          0.76
         Caa                    3.12                          0
         Ca                     0.01                          0
                             -------                          -----
         Total                 89.07%                         0.76%


DESCRIPTION OF CERTAIN SECURITIES, OTHER INVESTMENT POLICIES AND RISK FACTORS


      CONVERTIBLE SECURITIES. A convertible security is a bond, debenture, note,
preferred  stock or other security that may be converted into or exchanged for a
prescribed  amount of common  stock of the same or a different  issuer  within a
particular  period  of time at a  specified  price  or  formula.  A  convertible
security  entitles  the  holder to receive  interest  paid or accrued on debt or
dividends paid on preferred stock until the convertible  security  matures or is
redeemed, converted or exchanged.  Convertible securities have unique investment
characteristics  in that they  generally  (1) have  higher  yields  than  common
stocks,  but lower yields than comparable  non-convertible  securities,  (2) are
less subject to fluctuation in value than the underlying stock because they have
fixed  income  characteristics,  and  (3)  provide  the  potential  for  capital
appreciation if 


                                       5
<PAGE>

the market price of the underlying common stock increases.  See the SAI for more
information on convertible securities.


      DEBT  SECURITIES--RISK  FACTORS.  The market value of debt  securities  is
influenced  primarily by changes in the level of interest rates.  Generally,  as
interest rates rise, the market value of debt securities decreases.  Conversely,
as interest rates fall, the market value of debt securities  increases.  Factors
which  could  result in a rise in interest  rates,  and a decrease in the market
value of debt  securities,  include an increase  in  inflation  or  inflationary
expectations,  an increase in the rate of U.S.  economic growth, an expansion in
the Federal budget  deficit or an increase in the price of  commodities  such as
oil.  In  addition,  the  market  value  of debt  securities  is  influenced  by
perceptions of the credit risks associated with such securities.  Credit risk is
the risk that  adverse  changes in  economic  conditions  can affect an issuer's
ability to pay  principal  and  interest.  See Appendix A for a  description  of
corporate bond ratings.

      DEEP  DISCOUNT  SECURITIES.  The Fund may  invest  up to 15% of its  total
assets in securities of companies that are financially  troubled,  in default or
undergoing  bankruptcy or reorganization.  Such securities are usually available
at a deep discount from the face value of the  instrument.  The Fund will invest
in Deep Discount  Securities when the Adviser  believes that there exist factors
that are likely to restore the company to a healthy  financial  condition.  Such
factors  include a  restructuring  of debt,  management  changes,  existence  of
adequate assets or other unusual  circumstances.  Debt instruments  purchased at
deep discounts may pay very high effective yields. In addition, if the financial
condition  of the issuer  improves,  the  underlying  value of the  security may
increase,  resulting  in  a  capital  gain.  If  the  company  defaults  on  its
obligations  or  remains  in  default,  or if  the  plan  of  reorganization  is
insufficient  for  debtholders,  the Deep  Discount  Securities  may stop paying
interest  and lose value or become  worthless.  The  Adviser  will  balance  the
benefits of  investing in Deep  Discount  Securities  with these risks.  While a
diversified  portfolio may reduce the overall impact of a Deep Discount Security
that is in default or loses its value, the risk cannot be eliminated.  See "High
Yield Securities--Risk Factors."

      HIGH YIELD SECURITIES--RISK  FACTORS. High Yield Securities are subject to
certain  risks  that  may  not be  present  with  investments  in  higher  grade
securities.

           EFFECT OF INTEREST RATE AND ECONOMIC CHANGES.  Debt obligations rated
lower than Baa by Moody's or BBB by S&P,  commonly  referred to as "junk  bonds"
are  speculative  and  generally  involve a higher risk or loss of principal and
income than High Yield  Securities.  The prices of High Yield Securities tend to
be less sensitive to interest rate changes than  higher-rated  investments,  but
may be more  sensitive  to  adverse  economic  changes or  individual  corporate
developments.  Periods of economic  uncertainty and changes  generally result in
increased  volatility in the market  prices and yields of High Yield  Securities
and  thus  in a  Fund's  net  asset  value.  A  strong  economic  downturn  or a
substantial period of rising interest rates could severely affect the market for
High Yield Securities. In these circumstances,  highly leveraged companies might
have greater  difficulty  in making  principal  and interest  payments,  meeting
projected business goals, and obtaining additional financing.  Thus, there could
be a higher incidence of default. This would affect the value of such securities
and thus a Fund's net asset value. Further, if the issuer of a security owned by
a Fund defaults, that Fund might incur additional expenses to seek recovery.

         Generally,  when  interest  rates  rise,  the value of fixed  rate debt
obligations,  including High Yield Securities,  tends to decrease; when interest
rates fall, the value of fixed rate debt  obligations  tends to increase.  If an
issuer of a High  Yield  Security  containing  a  redemption  or call  provision
exercises either provision in a declining  interest rate market,  the Fund would
have to replace  the  security,  which could  result in a  decreased  return for
shareholders.  Conversely, if the Fund experiences unexpected net redemptions in
a rising  interest rate market,  it might be forced to sell certain  securities,
regardless of investment  merit.  This could result in 


                                       6
<PAGE>

decreasing the assets to which Fund expenses could be allocated and in a reduced
rate of return for the Fund.  While it is impossible to protect entirely against
this risk,  diversification  of the Fund's  portfolio and the Adviser's  careful
analysis of prospective  portfolio  securities  should  minimize the impact of a
decrease in value of a particular  security or group of securities in the Fund's
portfolio.

           THE HIGH YIELD  SECURITIES  MARKET.  The market for below  investment
grade bonds  expanded  rapidly in recent years and its growth  paralleled a long
economic expansion.  In the past, the prices of many lower-rated debt securities
declined  substantially,  reflecting  an  expectation  that many issuers of such
securities might experience financial  difficulties.  As a result, the yields on
lower-rated debt securities rose dramatically.  However,  such higher yields did
not  reflect the value of the income  streams  that  holders of such  securities
expected,  but rather  the risk that  holders  of such  securities  could lose a
substantial  portion  of  their  value  as a result  of the  issuers'  financial
restructuring  or default.  There can be no assurance  that such declines in the
below investment grade market will not reoccur.  The market for below investment
grade bonds  generally  is thinner and less active than that for higher  quality
bonds,  which may limit the Fund's ability to sell such securities at fair value
in  response  to  changes  in the  economy  or the  financial  markets.  Adverse
publicity  and  investor  perceptions,  whether  or  not  based  on  fundamental
analysis,  may also decrease the values and liquidity of lower rated securities,
especially in a thinly traded market.

           CREDIT  RATINGS.  The credit ratings issued by credit rating services
may not fully  reflect  the true risks of an  investment.  For  example,  credit
ratings typically  evaluate the safety of principal and interest  payments,  not
market value risk, of High Yield  Securities.  Also,  credit rating agencies may
fail to change on a timely basis a credit rating to reflect  changes in economic
or company  conditions  that affect a  security's  market  value.  Although  the
Adviser considers ratings of recognized rating services such as Moody's and S&P,
the Adviser primarily relies on its own credit analysis,  which includes a study
of  existing  debt,  capital  structure,  ability  to  service  debt  and to pay
dividends,  the  issuer's  sensitivity  to economic  conditions,  its  operating
history and the current  trend of  earnings.  The Fund may invest in  securities
rated  as low as D by  S&P or C by  Moody's  or,  if  unrated,  deemed  to be of
comparable  quality by the Adviser.  Debt  obligations with these ratings either
have  defaulted or in great danger of defaulting and are considered to be highly
speculative.  See "Deep Discount  Securities." The Adviser continually  monitors
the  investments  in the Fund's  portfolio  and carefully  evaluates  whether to
dispose of or retain High Yield  Securities  whose credit  ratings have changed.
See Appendix A for a description of corporate bond ratings.

           LIQUIDITY AND VALUATION. Lower-rated bonds are typically traded among
a smaller number of broker-dealers than in a broad secondary market.  Purchasers
of High Yield Securities tend to be institutions, rather than individuals, which
is a factor that  further  limits the  secondary  market.  To the extent that no
established  retail secondary market exists,  many High Yield Securities may not
be as liquid as  higher-grade  bonds.  A less active and thinner market for High
Yield Securities than that available for higher quality securities may result in
more volatile valuations of the Fund's holdings and more difficulty in executing
trades at favorable prices during unsettled market conditions.

      The  ability  of the Fund to value or sell High Yield  Securities  will be
adversely  affected  to the extent  that such  securities  are thinly  traded or
illiquid.  During such periods, there may be less reliable objective information
available and thus the  responsibility of the Fund's Board of Directors to value
High Yield  Securities  becomes more difficult,  with judgment playing a greater
role.  Further,  adverse  publicity about the economy or a particular issuer may
adversely affect the public's perception of the value, and thus liquidity,  of a
High Yield Security,  whether or not such perceptions are based on a fundamental
analysis.

           LEGISLATION.  Provisions  of the Revenue  Reconciliation  Act of 1989
limit a  corporate  issuer's  deduction  for a  portion  of the  original  issue
discount on "high yield discount"  obligations  (including  certain  


                                       7
<PAGE>

pay-in-kind securities).  This limitation could have a materially adverse impact
on the market for certain High Yield Securities.  From time to time, legislators
and regulators have proposed other  legislation that would limit the use of high
yield debt securities in leveraged buyouts, mergers and acquisitions.  It is not
certain  whether such proposals,  which also could  adversely  affect High Yield
Securities, will be enacted into law.

      MARKET  RISK.  The Fund is  subject to market  risk  because it invests in
common  stocks.  Market risk is the  possibility  that common  stock prices will
decline over short or even extended  periods.  The U.S. stock market tends to be
cyclical,  with periods when stock prices  generally rise and periods when stock
prices generally decline.

      MONEY MARKET  INSTRUMENTS.  Investments in commercial paper are limited to
obligations  rated Prime-1 by Moody's or A-1 by S&P.  Commercial  paper includes
notes,  drafts, or similar instruments payable on demand or having a maturity at
the time of issuance not  exceeding  nine months,  exclusive of days of grace or
any renewal  thereof.  Investments in  certificates of deposit will be made only
with domestic  institutions  with assets in excess of $500 million.  See the SAI
for more  information  regarding money market  instruments and Appendix A to the
SAI for a description of commercial paper ratings.

      PREFERRED STOCK. A preferred stock is a blend of the  characteristics of a
bond and common stock.  It can offer the higher yield of a bond and has priority
over common stock in equity ownership, but does not have the seniority of a bond
and,  unlike  common  stock,  its  participation  in the issuer's  growth may be
limited.  Preferred  stock has  preference  over common  stock in the receipt of
dividends  and in any  residual  assets after  payment to  creditors  should the
issuer be  dissolved.  Although the  dividend is set at a fixed annual rate,  in
some circumstances it can be changed or omitted by the issuer.

      RESTRICTED AND ILLIQUID  SECURITIES.  The Fund may invest up to 15% of its
net assets in illiquid  securities,  including (1) securities  that are illiquid
due to the absence of a readily  available market or due to legal or contractual
restrictions on resale and (2) repurchase agreements maturing in more than seven
days.  However,  illiquid  securities  for  purposes of this  limitation  do not
include  securities  eligible  for  resale  to  qualified  institutional  buyers
pursuant to Rule 144A under the  Securities  Act of 1933, as amended,  which the
Fund's  Board of  Directors  or the  Adviser  has  determined  are liquid  under
Board-approved guidelines. See the SAI for more information regarding restricted
and illiquid securities.

      ZERO COUPON AND PAY-IN-KIND  SECURITIES.  Zero coupon  securities are debt
obligations  that do not entitle the holder to any periodic  payment of interest
prior to maturity or a specified date when the  securities  begin paying current
interest. They are issued and traded at a discount from their face amount or par
value, which discount varies depending on the time remaining until cash payments
begin,  prevailing  interest rates,  liquidity of the security and the perceived
credit quality of the issuer. Pay-in-kind securities are those that pay interest
through the issuance of additional securities.  The market prices of zero coupon
and  pay-in-kind  securities  generally  are more  volatile  than the  prices of
securities that pay interest  periodically and in cash and are likely to respond
to changes in  interest  rates to a greater  degree  than do other types of debt
securities having similar maturities and credit quality. Original issue discount
earned on zero coupon  securities and the  "interest" on pay-in-kind  securities
must be  included  in the Fund's  income.  Thus,  to continue to qualify for tax
treatment as a regulated investment company and to avoid a certain excise tax on
undistributed  income,  the Fund may be required to  distribute as a dividend an
amount that is greater than the total amount of cash it actually  receives.  See
"Taxes" in the SAI. These distributions must be made from the Fund's cash assets
or, if necessary,  from the proceeds of sales of portfolio securities.  The Fund
will not be able to purchase  additional  income-producing  securities with cash
used to make such  distributions,  and its current  income  ultimately  could be
reduced as a result.


                                       8
<PAGE>

                                HOW TO BUY SHARES


      Investments  in the Fund  are  only  available  through  purchases  of the
Contracts offered by First Investors Life.  Purchase payments for the Contracts,
net of certain expenses, are paid into a unit investment trust, Separate Account
A. Separate Account A purchases  shares of the Fund.  Orders for the purchase of
shares of the Fund  received  prior to the close of  regular  trading on the New
York Stock Exchange  ("NYSE"),  generally 4:00 P.M. (New York City Time), on any
business  day the NYSE is open for  trading,  will be confirmed at the net asset
value  determined  as of the close of  regular  trading on the NYSE on that day.
Orders received after the close of regular trading on the NYSE will be confirmed
at the next determined net asset value. See  "Determination of Net Asset Value."
For a discussion of pricing  practices when FIC's Woodbridge  offices are unable
to open for business due to an emergency, see the SAI.


                              HOW TO REDEEM SHARES


      Shares of the Fund may be redeemed at the direction of Contractowners,  in
accordance with the terms of the Contracts. Redemptions will be made at the next
determined  net asset  value of the Fund upon  receipt of a proper  request  for
redemption or repurchase.  Payment will be made by check as soon as possible but
within seven days after presentation. However, the Fund's Board of Directors may
suspend  the right of  redemption  or  postpone  the date of payment  during any
period  when  (a)  trading  on the  NYSE  is  restricted  as  determined  by the
Securities and Exchange Commission ("SEC"), or the NYSE is closed for other than
weekends and holidays,  (b) the SEC has by order permitted such  suspension,  or
(c) an emergency,  as defined by rules of the SEC,  exists during which time the
sale or  valuation of portfolio  securities  held by the Fund is not  reasonably
practicable.


                                   MANAGEMENT

      BOARD OF DIRECTORS.  The Fund's Board of Directors, as part of its overall
management  responsibility,  oversees various organizations  responsible for the
Fund's day-to-day management.

      ADVISER.  First Investors Management Company,  Inc. supervises and manages
the  Fund's  investments,  determines  the  Fund's  portfolio  transactions  and
supervises  all  aspects of the  Fund's  operations.  The  Adviser is a New York
corporation located at 95 Wall Street, New York, NY 10005. The Adviser presently
acts as investment  adviser to 14 mutual  funds.  First  Investors  Consolidated
Corporation  ("FICC") owns all of the voting common stock of the Adviser and all
of the  outstanding  stock of FIC and the  Transfer  Agent.  Mr.  Glenn O.  Head
controls FICC and, therefore, controls the Adviser.


      As compensation for its services,  the Adviser receives an annual fee from
the Fund, which is payable monthly. For the fiscal year ended December 31, 1996,
the Fund's advisory fees were 0.75% of its average daily net assets.


      The Fund bears all expenses of its operations other than those incurred by
the Adviser under the terms of its advisory  agreement.  Fund expenses  include,
but are not  limited  to:  the  advisory  fee;  shareholder  servicing  fees and
expenses;  custodian  fees and expenses;  legal and auditing  fees;  expenses of
communicating  to  existing  shareholders,  including  preparing,  printing  and
mailing prospectuses and shareholder reports to such shareholders; and proxy and
shareholder meeting expenses.

      PORTFOLIO  MANAGER.  George V. Ganter has been  Portfolio  Manager for the
Fund since 1986.  Mr. Ganter joined FIMCO in 1985 as an Analyst.  Since 1989, he
has been Portfolio  Manager for First Investors High Yield Fund,  Inc., the High
Yield Fund of First  Investors  Life Series Fund and  Executive  Investors  High
Yield Fund.


                                       9
<PAGE>

                        DETERMINATION OF NET ASSET VALUE

      The net  asset  value of a Fund  share is  determined  as of the  close of
regular  trading on the NYSE  (generally  4:00 P.M., New York City time) on each
day the NYSE is open for trading, and at such other times as the Fund's Board of
Directors deems  necessary,  by dividing the market value of the securities held
by the Fund, plus any cash and other assets, less all liabilities, by the number
of shares outstanding. If there is no available market value, securities will be
valued at their fair value as  determined  in good faith  pursuant to procedures
adopted  by the Fund's  Board of  Directors.  The NYSE  currently  observes  the
following holidays: New Year's Day, Presidents' Day, Good Friday,  Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

                        DIVIDENDS AND OTHER DISTRIBUTIONS

      Dividends from net investment income are generally declared daily and paid
quarterly in additional  Fund shares at net asset value  (without  sales charge)
generally  determined  as of the close of  business  on the first  business  day
immediately following the last business day of the quarter. If you redeem all of
your Fund  shares at any time  during the  quarter,  you are paid all  dividends
declared through the day prior to the date of the redemption,  together with the
proceeds  of your  redemption.  Net  investment  income  includes  interest  and
dividends,  earned discount and other income earned on portfolio securities less
expenses. Distributions of substantially all of the Fund's net capital gain (the
excess of net long-term  capital gain over net short-term  capital loss) and net
short-term  capital gain,  if any,  after  deducting any available  capital loss
carryovers,  and any net realized gains from foreign currency transactions,  are
declared  annually  and paid in  additional  Fund  shares at the net asset value
(without sales charge)  generally  determined as of the close of business on the
business day immediately following the record date of the distribution.

                                      TAXES

      The Fund  intends to  continue  to qualify  for  treatment  as a regulated
investment  company ("RIC") under  Subchapter M of the Internal  Revenue Code of
1986, as amended ("Code"),  so that it will be relieved of Federal income tax on
that part of its investment company taxable income (consisting  generally of net
investment  income,  net  short-term  capital  gain and net gains  from  certain
foreign currency  transactions)  and net capital gain that is distributed to its
shareholders.

      Shares of the Fund are  offered  only to  Separate  Account A, which is an
insurance company separate account that funds variable annuity contracts.  Under
the Code, no tax is imposed on an insurance  company with respect to income of a
qualifying  separate account that is properly allocable to the value of eligible
variable annuity  contracts.  Please refer to "Federal Income Tax Status" in the
Prospectus of Separate  Account A for  information  as to the tax status of that
account and the holders of the Contracts.

      The Fund intends to comply with the diversification  requirements  imposed
by  section  817(h)  of  the  Code  and  the   regulations   thereunder.   These
requirements,  which are in addition to the diversification requirements imposed
on the  Fund by the  1940  Act  and  Subchapter  M of the  Code,  place  certain
limitations  on the  assets of  Separate  Account A -- and of the Fund,  because
section 817(h) and those  regulations  treat the assets of the Fund as assets of
Separate  Account A -- that may be invested in  securities  of a single  issuer.
Specifically,  the  regulations  provide that,  except as permitted by the "safe
harbor"  described  below, as of the end of each calendar  quarter (or within 30
days  thereafter) no more than 55% of the Fund's total assets may 


                                       10
<PAGE>

be represented
by one investment, no more than 70% by any two investments,  no more than 80% by
any three  investments  and no more than 90% by any four  investments.  For this
purpose,  all securities of the same issuer are considered a single  investment,
and while  each U.S.  Government  agency and  instrumentality  is  considered  a
separate   issuer,   a  particular   foreign   government   and  its   agencies,
instrumentalities  and political  subdivisions  all will be considered  the same
issuer.  Section 817(h) provides, as a safe harbor, that a separate account will
be treated as being adequately  diversified if the diversification  requirements
under  Subchapter  M are  satisfied  and no more  than  55% of the  value of the
account's  total  assets  are cash and cash  items,  government  securities  and
securities  of other RICs.  Failure of the Fund to satisfy  the  section  817(h)
requirements  would result in taxation of First  Investors Life and treatment of
the  Contractholders  other than as  described  in the  Prospectus  of  Separate
Account A.

      The  foregoing is only a summary of some of the important  Federal  income
tax considerations  generally  affecting the Fund and its shareholders;  see the
Statement of Additional Information for a more detailed discussion. Shareholders
are urged to consult their tax advisers.

                               GENERAL INFORMATION

      ORGANIZATION.  The Fund was  incorporated  in the  State  of  Maryland  on
November 14, 1979.  The Fund is authorized to issue 25 million  shares of common
stock,  $1.00 par  value per  share.  Shares  of the Fund have  equal  dividend,
voting,  liquidation  and  redemption  rights.  The Fund  does  not hold  annual
shareholder  meetings.  If  requested to do so by the holders of at least 10% of
the  Fund's  outstanding  shares,  the  Board of  Directors  will call a special
meeting of shareholders for any purpose, including the removal of Directors.

      CUSTODIAN.  The Fund has retained The Bank of New York, 48 Wall Street,
New York, New York 10286,  to act as custodian of the securities and cash of the
Fund.

      TRANSFER AGENT.  Administrative  Data Management  Corp.,  581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of the Adviser and First Investors Life,
acts as transfer agent for the Fund and as dividend disbursing agent.

      PERFORMANCE  INFORMATION.  Performance  information is contained in the
Fund's Annual Report which may be obtained  without  charge by contacting  First
Investors Life at 212-858-8200.

      SHAREHOLDER  INQUIRIES.  Shareholder  inquiries  can be made by calling
First Investors Life at 212-858-8200.


      ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS.  It is the Fund's practice
to mail only one copy of its annual and  semi-annual  reports to any  address at
which more than one shareholder  with the same last name has indicated that mail
is to be delivered. Additional copies of the reports will be mailed if requested
in writing or by telephone by any shareholder.



                                       11
<PAGE>

                                   APPENDIX A
                      DESCRIPTION OF CORPORATE BOND RATINGS

STANDARD & POOR'S RATINGS GROUP

      The ratings are based on current  information  furnished  by the issuer or
obtained by S&P from other sources it considers  reliable.  S&P does not perform
any audit in connection with any rating and may, on occasion,  rely on unaudited
financial information.  The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information,  or based on other
circumstances.

      The   ratings   are  based,   in  varying   degrees,   on  the   following
considerations:

      1.   Likelihood  of  default-capacity  and  willingness  of the obligor as
           to the timely  payment of interest  and  repayment  of principal in
           accordance with the terms of the obligation;

      2.   Nature of and provisions of the obligation;

      3.   Protection  afforded by, and relative  position of, the obligation in
           the event of bankruptcy,  reorganization,  or other arrangement under
           the laws of bankruptcy and other laws affecting creditors' rights.

      AAA Debt rated "AAA" has the highest rating  assigned by S&P.  Capacity to
pay interest and repay principal is extremely strong.

      AA Debt rated "AA" has a very strong  capacity to pay  interest  and repay
principal and differs from the higher rated issues only in small degree.

      A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more  susceptible  to the adverse  effects of changes in
circumstances and economic conditions than debt in higher rated categories.

      BBB Debt rated "BBB" is  regarded  as having an  adequate  capacity to pay
interest and repay principal.  Whereas it normally exhibits adequate  protection
parameters,  adverse  economic  conditions  or changing  circumstances  are more
likely to lead to a weakened  capacity to pay interest and repay  principal  for
debt in this category than in higher rated categories.

      BB, B, CCC,  CC, C Debt rated "BB," "B," "CCC," "CC" and "C" is  regarded,
on  balance,  as  predominantly  speculative  with  respect to  capacity  to pay
interest and repay principal. "BB" indicates the least degree of speculation and
"C" the highest.  While such debt will likely have some  quality and  protective
characteristics,  these are  outweighed  by large  uncertainties  or major  risk
exposures to adverse conditions.

      BB Debt rated "BB" has less near-term  vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse  business,  financial,  or  economic  conditions  which  could  lead  to
inadequate  capacity to meet timely  interest and principal  payments.  The "BB"
rating  category  is also  used for debt  subordinated  to  senior  debt that is
assigned an actual or implied "BBB-" rating.

      B Debt rated "B" has a greater  vulnerability to default but currently has
the  capacity  to meet  interest  payments  and  principal  repayments.  Adverse
business,  financial,  or economic  conditions  will likely  impair  capacity or
willingness to pay interest and repay principal. The "B" rating category is also
used for debt  subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.


                                       12
<PAGE>

      CCC Debt rated "CCC" has a currently identifiable vulnerability to default
and is dependent upon favorable business,  financial, and economic conditions to
meet timely  payment of interest  and  repayment of  principal.  In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.  The "CCC" rating category is also
used for debt  subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.

      CC The rating "CC"  typically  is applied to debt  subordinated  to senior
debt that is assigned an actual or implied "CCC" rating.

      C The rating "C" typically is applied to debt  subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy  petition has been filed,  but debt
service payments are continued.

      CI The rating  "CI" is reserved  for income  bonds on which no interest is
being paid.

      D Debt rated "D" is in payment  default.  The "D" rating  category is used
when interest  payments or principal  payments are not made on the date due even
if the  applicable  grace period has not expired,  unless S&P believes that such
payments will be made during such grace period. The "D" rating also will be used
upon  the  filing  of  a  bankruptcy  petition  if  debt  service  payments  are
jeopardized.

      PLUS (+) OR MINUS (-):  The ratings  from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative  standing within the major
categories.


MOODY'S INVESTORS SERVICE, INC.

      AAA Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest  degree of investment  risk and are generally  referred to as
"gilt edged." Interest payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change,  such changes as can be  visualized  are most  unlikely to impair the
fundamentally strong position of such issues.

      AA Bonds  which are rated  "Aa" are  judged to be of high  quality  by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade  bonds.  They are rated lower than the best bonds because  margins of
protection may not be as large as in Aaa  securities,  fluctuation of protective
elements  may be of greater  amplitude  or there may be other  elements  present
which make the long-term risk appear somewhat greater than the Aaa securities.

      A Bonds which are rated "A" possess many favorable  investment  attributes
and are to be  considered  as  upper-medium-grade  obligations.  Factors  giving
security to principal and interest are considered adequate,  but elements may be
present which suggest a susceptibility to impairment some time in the future.

      BAA Bonds which are rated "Baa" are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured).  Interest payments
and principal  security appear adequate for the present,  but certain protective
elements may be lacking or may be  characteristically  unreliable over any great
length of time. Such bonds lack outstanding  investment  characteristics  and in
fact have speculative characteristics as well.


                                       13
<PAGE>

      BA Bonds  which are rated  "Ba" are judged to have  speculative  elements;
their future  cannot be  considered  as  well-assured.  Often the  protection of
interest  and  principal  payments  may be very  moderate,  and thereby not well
safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

      B  Bonds  which  are  rated  "B"  generally  lack  characteristics  of the
desirable  investment.  Assurance  of  interest  and  principal  payments  or of
maintenance  of other terms of the contract  over any long period of time may be
small.

      CAA Bonds which are rated "Caa" are of poor  standing.  Such issues may
be in  default  or there may be  present  elements  of danger  with  respect  to
principal or interest.

      CA Bonds which are rated "Ca" represent  obligations which are speculative
in a high  degree.  Such  issues  are  often in  default  or have  other  marked
shortcomings.

      C Bonds  which are  rated "C" are the  lowest  rated  class of bonds,  and
issues so rated can be  regarded  as having  extremely  poor  prospects  of ever
attaining any real investment standing.

      Moody's  applies  numerical  modifiers,  1, 2 and 3 in each generic rating
classification  from Aa  through B in its  corporate  bond  rating  system.  The
modifier 1 indicates  that the  security  ranks in the higher end of its generic
rating category;  the modifier 2 indicates a mid-range ranking; and the modifier
3  indicates  that  the  issue  ranks in the  lower  end of its  generic  rating
category.


                                       14
<PAGE>

TABLE OF CONTENTS                                                           PAGE


Financial Highlights....................................................      2
Investment Objectives and Policies......................................      4
How to Buy Shares.......................................................      9
How to Redeem Shares....................................................      9
Management..............................................................      9
Determination of Net Asset Value........................................     10
Dividends and Other Distributions.......................................     10
Taxes...................................................................     10
General Information.....................................................     11
Appendix A..............................................................     12


<PAGE>



                     FIRST INVESTORS SPECIAL BOND FUND, INC.
                                   PROSPECTUS


INVESTMENT ADVISER
First Investors Management Company, Inc.
95 Wall Street
New York, NY  10005


LEGAL COUNSEL
Kirkpatrick & Lockhart LLP 
1800 Massachussetts Avenue, N.W.
Washington, DC  20036


CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY  10286


TRANSFER AGENT
Administrative Data Management Corp.
581 Main Street
Woodbridge, New Jersey  07095-1198


AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, Pennsylvania  19102





                                   PROSPECTUS
                                 April 30, 1997


NO  DEALER,  SALESMAN  OR ANY  OTHER  PERSONS  HAS BEEN  AUTHORIZED  TO GIVE ANY
INFORMATION OR TO MAKE ANY  REPRESENTATIONS  OTHER THAN THOSE  CONTAINED IN THIS
PROSPECTUS  OR THE STATEMENT OF  ADDITIONAL  INFORMATION,  AND IF GIVEN OR MADE,
SUCH  INFORMATION  AND  REPRESENTATION  MUST NOT BE RELIED  UPON AS HAVING  BEEN
AUTHORIZED BY THE FUND,  OR ANY  AFFILIATE  THEREOF.  THIS  PROSPECTUS  DOES NOT
CONSTITUTE  AN  OFFER  TO SELL OR A  SOLICITATION  OF AN OFFER TO BUY ANY OF THE
SHARES  OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IS SUCH STATE.

<PAGE>

                     FIRST INVESTORS SPECIAL BOND FUND, INC.


            STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 30, 1997


               95 WALL STREET NEW YORK, N.Y. 10005/(212) 858-8200


         This is a  Statement  of  Additional  Information  for First  Investors
Special Bond Fund, Inc. ("Fund"), an open-end diversified  management investment
company.  Shares of the Fund may be purchased only through the  acquisition of a
variable  annuity  contract  issued by First  Investors Life  Insurance  Company
("First Investors Life").

         The Fund  primarily  seeks high current  income  without  undue risk of
principal and  secondarily  seeks growth of capital by investing at least 65% of
its total assets in high yield,  high risk securities,  commonly  referred to as
"junk  bonds."  There  can be no  assurance  that  the  Fund  will  achieve  its
investment objectives.


         This Statement of Additional Information is not a prospectus. It should
be read in conjunction  with the Fund's  Prospectus  dated April 30, 1997, which
may be obtained  free of cost from the Fund at the address or  telephone  number
noted above.


TABLE OF CONTENTS                                                        Page

Investment Policies....................................................    2
Investment Restrictions................................................    5
Directors and Officers.................................................    7
Management............................................................     9
Determination of Net Asset Value.......................................   10
Allocation of Portfolio Brokerage......................................   11
Emergency Pricing Procedures...........................................   12
Taxes..................................................................   12
General Information....................................................   13
Appendix A.............................................................   14
Financial Statements...................................................   15


<PAGE>


                               INVESTMENT POLICIES

         BANKERS'  ACCEPTANCES.  The Fund may  invest in  bankers'  acceptances.
Bankers'   acceptances  are  short-term  credit   instruments  used  to  finance
commercial  transactions.  Generally,  an  acceptance is a time draft drawn on a
bank by an exporter  or  importer to obtain a stated  amount of funds to pay for
specific  merchandise.  The draft is then  "accepted" by a bank that, in effect,
unconditionally  guarantees  to pay the  face  value  of the  instrument  on its
maturity date. The acceptance may then be held by the accepting bank as an asset
or it may be sold in the  secondary  market at the going rate of interest  for a
specific  maturity.  Although  maturities for  acceptances can be as long as 270
days, most acceptances have maturities of six months or less.

         CERTIFICATES  OF DEPOSIT.  The Fund may invest in bank  certificates of
deposit ("CDs")  subject to the  restrictions  set forth in the Prospectus.  The
Federal Deposit Insurance  Corporation is an agency of the U.S. Government which
insures the deposits of certain  banks and savings and loan  associations  up to
$100,000 per deposit.  The interest on such  deposits may not be insured if this
limit is exceeded.  Current Federal regulations also permit such institutions to
issue insured  negotiable CDs in amounts of $100,000 or more,  without regard to
the interest rate ceilings on other  deposits.  To remain fully  insured,  these
investments  currently  must be limited to $100,000  per insured bank or savings
and loan association.

         CONVERTIBLE SECURITIES.  The Fund may invest in convertible securities.
While no securities investment is without some risk,  investments in convertible
securities  generally entail less risk than the issuer's common stock,  although
the  extent to which  such risk is reduced  depends  in large  measure  upon the
degree to which the convertible security sells above its value as a fixed income
security.  The Fund's investment  adviser,  First Investors  Management Company,
Inc.  ("Adviser"  or "FIMCO"),  will decide to invest  based upon a  fundamental
analysis of the long-term attractiveness of the issuer and the underlying common
stock, the evaluation of the relative attractiveness of the current price of the
underlying  common  stock  and the  judgment  of the  value  of the  convertible
security relative to the common stock at current prices.

         FOREIGN  GOVERNMENT  OBLIGATIONS.   The  Fund  may  invest  in  foreign
government  obligations,  which  generally  consist of obligations  supported by
national,  state or provincial  governments or similar  political  subdivisions.
Investments in foreign  government debt  obligations  involve special risks. The
issuer of the debt may be unable or unwilling to pay interest or repay principal
when due in  accordance  with  the  terms  of such  debt,  and the Fund may have
limited  legal  resources  in  the  event  of  default.   Political  conditions,
especially  a  sovereign  entity's  willingness  to meet  the  terms of its debt
obligations, are of considerable significance.

         FOREIGN  SECURITIES--RISK  FACTORS.   Investments  in  foreign  markets
involve  special  risks and  considerations  which are in  addition to the usual
risks inherent in domestic investments.  These include the following:  there may
be less publicly available information about foreign companies comparable to the
reports and ratings that are  published  about  companies in the United  States;
foreign companies are not generally subject to uniform accounting,  auditing and
financial reporting standards and requirements comparable to those applicable to
U.S.  companies;  some foreign stock markets have substantially less volume than
U.S. markets,  and securities of some foreign companies are less liquid and more
volatile  than  securities  of  comparable  U.S.  companies;  there  may be less
government  supervision and regulation of foreign stock  exchanges,  brokers and
listed  companies  than  exist  in  the  United  States;  and  there  may be the
possibility  of  expropriation  or  confiscatory  taxation,  political or 


                                       2
<PAGE>

social  instability or diplomatic  developments which could affect assets of the
the Fund held in foreign  countries.  Because  the Fund does not intend to hedge
its  foreign  investments  against  the risk of foreign  currency  fluctuations,
changes in the value of these  currencies  can  significantly  affect the Fund's
share price.

         LOANS  OF  PORTFOLIO  SECURITIES.  The  Fund  may  loan  securities  to
qualified broker-dealers or other institutional investors provided: the borrower
pledges to the Fund and agrees to maintain at all times with the Fund collateral
equal to not less than 100% of the value of the securities  loaned (plus accrued
interest or dividend,  if any);  the loan is terminable at will by the Fund; the
Fund pays only  reasonable  custodian fees in connection  with the loan; and the
Adviser monitors the creditworthiness of the borrower throughout the life of the
loan. Such loans may be terminated by the Fund at any time and the Fund may vote
the proxies if a material event affecting the investment is to occur. The market
risk  applicable to any security loaned remains a risk of the Fund. The borrower
must add to the  collateral  whenever the market value of the  securities  rises
above the level of such collateral.  The Fund could incur a loss if the borrower
should fail  financially  at a time when the value of the loaned  securities  is
greater than the collateral. The Fund may make loans of portfolio securities not
in excess of 10% of its total assets.

         REPURCHASE  AGREEMENTS.  The Fund may enter into repurchase  agreements
with banks which are members of the Federal Reserve System or securities dealers
who are  members  of a national  securities  exchange  or are  market  makers in
government securities. The period of these repurchase agreements will usually be
short,  from  overnight  to one  week,  and at no time  will the Fund  invest in
repurchase  agreements  with  more  than  one  year  in time  to  maturity.  The
securities  which  are  subject  to  repurchase  agreements,  however,  may have
maturity  dates in excess of one year from the effective  date of the repurchase
agreement. The Fund will always receive, as collateral,  securities whose market
value, including accrued interest,  which will at all times be at least equal to
100% of the dollar amount invested by the Fund in each  agreement,  and the Fund
will make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian. If the seller defaults, the
Fund might incur a loss if the value of the  collateral  securing the repurchase
agreement  declines,  and  might  incur  disposition  costs in  connection  with
liquidating the collateral.  In addition,  if bankruptcy or similar  proceedings
are commenced with respect to the seller of the security,  realization  upon the
collateral by the Fund may be delayed or limited.  The Fund may not enter into a
repurchase  agreement with more than seven days to maturity if, as a result more
than 15% of its net assets  would be  invested  in such  repurchase  agreements,
together with any other illiquid investments.

         RESTRICTED  AND  ILLIQUID  SECURITIES.  The  Fund may not  purchase  or
otherwise  acquire any  security if, as a result more than 15% of its net assets
(taken at current  value) would be invested in  securities  that are illiquid by
virtue of the  absence  of a readily  available  market or legal or  contractual
restrictions  on  resale.   This  policy  includes  foreign  issuers'   unlisted
securities with a limited trading market and repurchase  agreements  maturing in
more than  seven  days.  This  policy  does not  include  restricted  securities
eligible for resale  pursuant to Rule 144A under the  Securities Act of 1933, as
amended  ("1933  Act"),  which the Fund's  Board of Directors or the Adviser has
determined under Board-approved guidelines are liquid.

         Restricted  securities which are illiquid may be sold only in privately
negotiated  transactions  or  in  public  offerings  with  respect  to  which  a
registration  statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries.  Securities that are freely  marketable in the country where they are
principally  traded,  but 


                                       3
<PAGE>

would not be freely marketable in the United States,  will not be subject to the
Fund's 15% limitation on illiquid  securities.  Where  registration is required,
the Fund may be obligated to pay all or part of the registration  expenses and a
considerable  period may elapse between the time of the decision to sell and the
time  the  Fund  may  be  permitted  to  sell  a  security  under  an  effective
registration statement. If, during such a period, adverse market conditions were
to develop,  the Fund might obtain a less favorable price than prevailed when it
decided to sell.

         In recent years, a large institutional market has developed for certain
securities  that are not  registered  under  the  1933  Act,  including  private
placements,  repurchase  agreements,  commercial paper,  foreign  securities and
corporate bonds and notes.  These  instruments are often  restricted  securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration.  Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend  on  an  efficient   institutional  market  in  which  such  unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment.  Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain  institutions  is not  dispositive of
the liquidity of such investments.

         Rule  144A  under the 1933 Act  establishes  a "safe  harbor"  from the
registration  requirements of the 1933 Act for resales of certain  securities to
qualified institutional buyers.  Institutional markets for restricted securities
that  might  develop  as a  result  of Rule  144A  could  provide  both  readily
ascertainable  values for restricted  securities and the ability to liquidate an
investment in order to satisfy share redemption  orders. An insufficient  number
of qualified  institutional  buyers interested in purchasing Rule  144A-eligible
securities held by the Fund,  however,  could affect adversely the marketability
of such  portfolio  securities  and the Fund  might be unable to dispose of such
securities promptly or at reasonable prices.

         U.S.  GOVERNMENT  OBLIGATIONS.  Securities  issued or  guaranteed as to
principal  and  interest  by the  U.S.  Government  include  (1)  U.S.  Treasury
obligations  which differ only in their interest rates,  maturities and times of
issuance as follows:  U.S. Treasury bills (maturities of one year or less), U.S.
Treasury  notes  (maturities  of one to  ten  years)  and  U.S.  Treasury  bonds
(generally  maturities of greater than ten years), and (2) obligations issued or
guaranteed by U.S. Government agencies and instrumentalities  that are backed by
the full faith and credit of the United States, such as securities issued by the
Federal Housing  Administration,  Government National Mortgage Association,  the
Department of Housing and Urban Development, the Export-Import Bank, the General
Services  Administration and the Maritime  Administration and certain securities
issued by the Farmers Home Administration and the Small Business Administration.
The range of maturities of U.S.  Government  Obligations is usually three months
to thirty years.

         WARRANTS.  The Fund may purchase  warrants,  which are instruments that
permit the Fund to acquire, by subscription,  the capital stock of a corporation
at a set price,  regardless of the market price for such stock.  Warrants may be
either  perpetual or of limited  duration.  There is greater risk that  warrants
might  drop in value at a faster  rate than the  underlying  stock.  The  Fund's
investment in warrants is limited to 5% of its net assets,  with no more than 2%
in warrants not listed on either the New York or American Stock Exchange.

         WHEN-ISSUED SECURITIES. Although it has no intention of doing so in the
coming  year,  the Fund many  invest up to 10% of its net  assets in  securities
issued on a when-issued  or delayed  delivery  basis at the time the purchase is
made.  The Fund  generally  would not pay for such  securities  or start 


                                       4
<PAGE>


earning  interest on them until they are issued or received.  However,  when the
Fund purchases debt obligations on a when-issued  basis, it assumes the risks of
ownership, including the risk of price fluctuation, at the time of purchase, not
at the time of receipt. Failure of the issuer to deliver a security purchased by
the Fund on a  when-issued  basis  may  result in the Fund  incurring  a loss or
missing an opportunity to make an alternative  investment.  When the Fund enters
into a commitment to purchase  securities on a when-issued basis, it establishes
a separate  account with its custodian  consisting of cash or liquid  high-grade
debt securities equal to the amount of the Fund's  commitment,  which are valued
at their fair market  value.  If on any day the market value of this  segregated
account  falls  below  the  value of the  Fund's  commitment,  the Fund  will be
required to deposit  additional  cash or qualified  securities  into the account
until equal to the value of the Fund's  commitment.  When the  securities  to be
purchased are issued,  the Fund will pay for the securities from available cash,
the sale of securities in the segregated account, sales of other securities and,
if necessary,  from sale of the when-issued  securities themselves although this
is not  ordinarily  expected.  Securities  purchased on a when-issued  basis are
subject to the risk that yields  available in the market,  when  delivery  takes
place,  may be higher than the rate to be received on the securities the Fund is
committed to purchase.  Sale of securities in the segregated  account or sale of
the when-issued securities may cause the realization of a capital gain or loss.

         PORTFOLIO  TURNOVER.  Although the Fund  generally  will not invest for
short-term trading purposes,  portfolio securities may be sold from time to time
without regard to the length of time they have been held when, in the opinion of
the Adviser,  investment  considerations warrant such action. Portfolio turnover
rate is calculated by dividing (1) the lesser of purchases or sales of portfolio
securities  for the  fiscal  year by (2) the  monthly  average  of the  value of
portfolio  securities  owned during the fiscal year. A 100%  turnover rate would
occur  if all  the  securities  in  Fund's  portfolio,  with  the  exception  of
securities  whose  maturities at the time of acquisition  were one year or less,
were sold and either  repurchased  or replaced  within one year.  A high rate of
portfolio  turnover  generally  leads to  transaction  costs and may result in a
greater number of taxable transactions. See "Allocation of Portfolio Brokerage."
For the fiscal  years ended  December  31, 1995 and 1996,  the Fund's  portfolio
turnover rate was 45% and 29%, respectively.



                             INVESTMENT RESTRICTIONS

         The Fund has adopted the investment  restrictions set forth below, and,
unless identified as  non-fundamental  policies,  may not be changed without the
approval  of a vote of a  majority  of the  outstanding  shares of the Fund.  As
provided in the Investment Company Act of 1940, as amended ("1940 Act"), a "vote
of a majority of the outstanding  shares of the Fund" means the affirmative vote
of the lesser of (1) more than 50% of the outstanding  shares of the Fund or (2)
67% or  more  of the  shares  present  at a  meeting  if  more  than  50% of the
outstanding shares are represented at the meeting in person or by proxy.

         The investment  restrictions provide that, among other things, the Fund
will not:

         (1) Borrow money except from banks and only for temporary or emergency
purposes  and then in amounts not in excess of 5% of its total  assets  taken at
cost or value, whichever is the lesser.

         (2) Make  loans to  other  persons  except  that  the  Fund's  Board of
Directors  may,  on  the  request  of  broker-dealers  or  other   institutional
investors,  which it deems qualified,  authorize the Fund 


                                       5
<PAGE>

to lend  securities for the purpose of covering short positions of the borrower,
but only when the  borrower  pledges cash  collateral  to the Fund and agrees to
maintain such collateral so that it amounts at all times to at least 100% of the
value of the securities. Such security loans will not be made if as a result the
aggregate of such loans exceeds 10% of the value of the Fund's total assets. The
Fund may  terminate  such  loans at any time and vote the  proxies if a material
event  affecting the investment is to occur.  The market risk  applicable to any
security  loaned  remains a risk of the Fund.  The  investment  risk is that the
borrower will fail  financially  when the collateral is in its  possession.  The
borrower  must add to  collateral  whenever the market  value of the  securities
rises above the level of such collateral. The primary objectives of such loaning
function is to  supplement  the Fund's  income  through  investment  of the cash
collateral in short-term interest bearing obligations. The purchase of a portion
of an issue of publicly distributed debt securities is not considered the making
of a loan.

         (3) With  respect  to 75% of the  Fund's  total  assets,  purchase  the
securities of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the  securities  of that issuer,
or (b) the Fund would hold more than 10% of the outstanding voting securities of
that issuer.

         (4)      Invest more than 5% of the value of its total assets in 
securities of issuers that have been in business for less than three years.

         (5)      Underwrite securities of other issuers.

         (6) Purchase or sell real estate or commodities or commodity contracts.
However,  the Fund may purchase interests in real estate investment trusts whose
securities are registered under the Securities Act of 1933, as amended,  and are
readily marketable.

         (7)  Invest in  companies  for the  purpose  of  exercising  control or
management.

         (8)  Invest in  securities  of other  investment  companies,  except in
connection with a merger of another investment company.

         (9) Purchase any securities on margin or sell any securities short.

         (10)  Purchase  or retain  securities  of any issuer if any  officer or
director of the Fund or the Adviser owns  beneficially  more than1/2of 1% of the
securities  of such issuer and  together own more than 5% of the  securities  of
such issuer.

         (11)  Invest  more  than 25% of the  value  of its  total  assets  in a
particular industry at any one time.

         (12) Purchase or sell  portfolio  securities  from or to the Adviser or
any director or officer thereof or of the Fund, as principals.

         The  Fund  has  adopted  the   following   non-fundamental   investment
restrictions which may be changed without shareholder approval:

         (1) The Fund will not purchase any security if, as a result,  more than
15% of its net  assets  would be  invested  in  illiquid  securities,  including
repurchase  agreements  not  entitling  the holder to 


                                       6
<PAGE>

payment of principal and interest  within seven days and any securities that are
illiquid by virtue of legal or contractual restrictions on resale or the absence
of a readily available market.  The Directors,  or the Fund's investment adviser
acting  pursuant to authority  delegated by the Directors,  may determine that a
readily  available market exists for securities  eligible for resale pursuant to
Rule 144A under the Securities Act of 1933, as amended,  or any other applicable
rule,  and  therefore  that such  securities  are not  subject to the  foregoing
limitation.

         (2) The Fund  will  not  pledge,  mortgage  or  hypothecate  any of its
assets,  except that the Fund may pledge its assets to secure borrowings made in
accordance with fundamental  investment restriction (1) above, provided the Fund
maintains asset coverage of at least 300% for all such borrowings.

         The Fund  has  filed  the  following  undertaking  to  comply  with the
requirements of a certain state in which shares of the Fund are sold,  which may
be changed without shareholder approval. The Fund will not invest in oil, gas or
other mineral leases or exploration or development programs.


                             DIRECTORS AND OFFICERS

         The following  table lists the Directors and executive  officers of the
Fund, their age, business address and principal occupations during the past five
years.  Unless  otherwise  noted,  an individual's  business  address is 95 Wall
Street, New York, New York 10005.

GLENN O.  HEAD*+  (71),  President  and  Director.  Chairman  of the  Board  and
Director,   Administrative  Data  Management  Corp.  ("ADM"),  FIMCO,  Executive
Investors  Management  Company,  Inc.  ("EIMCO"),  First  Investors  Corporation
("FIC"),   Executive   Investors   Corporation   ("EIC")  and  First   Investors
Consolidated Corporation ("FICC").



ROGER  L.  GRAYSON*  (40),  Director.  Director,  FIC and  FICC;  President  and
Director, First Investors Resources, Inc.; Commodities Portfolio Manager.

KATHRYN  S.  HEAD*+  (41),  Director,  581 Main  Street,  Woodbridge,  NJ 07095.
President,  FICC, EIMCO, ADM and FIMCO; Vice President,  Chief Financial Officer
and Director, FIC and EIC; President and Director, First Financial Savings Bank,
S.L.A.

REX R. REED (75),  Director,  259  Governors  Drive,  Kiawah  Island,  SC 29455.
Retired; formerly Senior Vice President, American Telephone & Telegraph Company.

HERBERT RUBINSTEIN (75),  Director,  145 Elm Drive,  Roslyn, NY 11576.  Retired;
formerly President, Belvac International Industries, Ltd. and President, Central
Dental Supply.


NANCY SCHAENEN (65), Director,  56 Midwood Terrace,  Madison, NJ 07940. Trustee,
Drew University and DePauw University.


JAMES M. SRYGLEY (64), Director, 33 Hampton Road, Chatham, NJ 07982.  Principal,
Hampton Properties, Inc. (property investment company).


                                       7
<PAGE>

JOHN T. SULLIVAN*  (65),  Director and Chairman of the Board;  Director,  FIMCO,
FIC, FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.

ROBERT F. WENTWORTH (67), Director, RR1, Box 2554, Upland Downs Road, Manchester
Center,  VT 05255.  Retired;  formerly  financial  and planning  executive  with
American Telephone & Telegraph Company.

JOSEPH I.  BENEDEK  (39),  Treasurer,  581 Main  Street,  Woodbridge,  NJ 07095.
Treasurer, FIC, FIMCO, EIMCO and EIC; Comptroller and Treasurer, FICC.

CONCETTA DURSO (62), Vice President and Secretary. Vice President,  FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC and EIC.

GEORGE V. GANTER (44),  Vice President.  Vice  President,  First Investors Asset
Management  Company,  Inc.,  First Investors High Yield Fund, Inc. and Executive
Investors Trust; Portfolio Manager, FIMCO.

- ----------
*        These Directors may be deemed to be "interested persons," as defined in
         the 1940 Act.
+        Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.



         All  of the  officers  and  Directors,  except  for  Mr.  Ganter,  hold
identical or similar positions with 14 other registered  investment companies in
the First Investors Family of Funds. Mr. Head is also an officer and/or Director
of First Investors  Asset  Management  Company,  Inc.,  First  Investors  Credit
Funding  Corporation,  First  Investors  Leverage  Corporation,  First Investors
Realty  Company,   Inc.,  First  Investors   Resources,   Inc.,  N.A.K.   Realty
Corporation, Real Property Development Corporation, Route 33 Realty Corporation,
First Investors Life Insurance  Company,  First Financial Savings Bank,  S.L.A.,
First Investors Credit Corporation,  School Financial Management Services,  Inc.
and Specialty  Insurance Group, Inc. Ms. Head is also an officer and/or Director
of First Investors Life Insurance Company,  First Investors Credit  Corporation,
School  Financial  Management  Services,  Inc.,  First Investors  Credit Funding
Corporation,  N.A.K. Realty Corporation,  Real Property Development Corporation,
First Investors Leverage Corporation,  Route 33 Realty Corporation and Specialty
Insurance Group, Inc.



                                       8
<PAGE>

         The  following  table lists  compensation  paid to the Directors of the
Fund for the fiscal year ended December 31, 1996.

<TABLE>

<CAPTION>
                                                          PENSION OR           ESTIMATED       TOTAL COMPENSATION
                                                          RETIREMENT           ANNUAL          FROM FIRST INVESTORS
                                         AGGREGATE        BENEFITS ACCRUED     BENEFITS UPON   FAMILY OF FUNDS
                                         COMPENSATION     AS PART OF           RETIREMENT      PAID TO
DIRECTOR**                               FROM FUND*       FUND EXPENSES                        DIRECTORS*
- ----------                               ------------     ----------------     -------------   --------------------
<S>                                      <C>              <C>                  <C>             <C>

James J. Coy***                                 $1,200                $-0-            $-0-               $37,200
Roger L. Grayson                                   -0-                 -0-             -0-                   -0-
Glenn O. Head                                      -0-                 -0-             -0-                   -0-
Kathryn S. Head                                    -0-                 -0-             -0-                   -0-
Rex R. Reed                                      1,200                 -0-             -0-                37,200
Herbert Rubinstein                               1,200                 -0-             -0-                37,200
James M. Srygley                                 1,100                 -0-             -0-                34,100
John T. Sullivan                                   -0-                 -0-             -0-                   -0-
Robert F. Wentworth                              1,200                 -0-             -0-                37,200
</TABLE>



* Compensation  to officers and interested  Directors of the Fund is paid by the
Adviser.  In addition,  compensation to non-interested  Directors of the Fund is
currently voluntarily paid by the Adviser.
**       Nancy Schaenen was not a Director in 1996.
***      On March 27, 1997 Mr. Coy resigned as a Director of the Fund.  Mr. Coy
did not resign due to a disagreement  with the Fund's  management on any matter
relating to the Fund's operations, policies or practices.  Mr. Coy currently 
serves as an emeritus Director.



                                   MANAGEMENT

         Investment  advisory  services  to  the  Fund  are  provided  by  First
Investors Management Company,  Inc. pursuant to an Investment Advisory Agreement
("Advisory  Agreement") dated June 13, 1994. The Advisory Agreement was approved
by the Board of Directors of the Fund, including a majority of the Directors who
are not parties to the Advisory Agreement or "interested persons" (as defined in
the 1940  Act) of any such  party  ("Independent  Directors"),  in  person  at a
meeting  called for such  purpose and by a majority of the  shareholders  of the
Fund.

         Pursuant to the Advisory  Agreement,  FIMCO shall  supervise and manage
the  Fund's  investments,   determine  the  Fund's  portfolio  transactions  and
supervise all aspects of its operations, subject to review by the Directors. The
Advisory  Agreement also provides that FIMCO shall provide the Fund with certain
executive,   administrative  and  clerical  personnel,   office  facilities  and
supplies,  conduct the  business  and details of the  operation  of the Fund and
assume certain  expenses  thereof,  other than obligations or liabilities of the
Fund.  The Advisory  Agreement may be terminated at any time without  penalty by
the Directors or by a majority of the outstanding voting securities of the Fund,
or by FIMCO,  in each  instance on not less than 60 days'  written  notice,  and
shall automatically  terminate in the event of its assignment (as defined in the
1940 Act). The Advisory  Agreement also provides that it will continue in effect
for a period of over two years only if such  continuance  is  approved  annually
either by the Directors or by a majority of the outstanding voting securities of
the Fund,  and,  in either  case,  by a vote of a  majority  of the  Independent
Directors voting in person at a meeting called for the purpose of voting on such
approval.


                                       9
<PAGE>

         Under the Advisory Agreement,  the Fund pays the Adviser an annual fee,
paid monthly, according to the following schedule:
                                                                    Annual
Average Daily Net Assets                                             Rate

Up to $250 million................................................   0.75%
In excess of $250 million up to $500 million......................   0.72
In excess of $500 million up to $750 million......................   0.69
Over $750 million.................................................   0.66

         The Adviser has an Investment  Committee  composed of George V. Ganter,
Margaret Haggerty,  Glenn O. Head, Nancy W. Jones,  Patricia D. Poitra,  Michael
O'Keefe,  Clark D. Wagner and Richard  Guinnessey.  The Committee  usually meets
weekly to discuss the  composition  of the  portfolio of each Fund and to review
additions to and deletions from the portfolios.


         For the fiscal years ended  December 31, 1994,  1995 and 1996, the Fund
paid the Adviser  $294,179,  $277,740 and  $271,569,  respectively,  in advisory
fees.



                        DETERMINATION OF NET ASSET VALUE


         Except as provided  herein,  a security listed or traded on an exchange
or the Nasdaq  Stock  Market is valued at its last sale price on the exchange or
market  where the security is  principally  traded,  and lacking any sales,  the
security is valued at the mean  between the closing bid and asked  prices.  Each
security traded in the  over-the-counter  ("OTC") market,  including  securities
listed on exchanges whose primary market is believed to be OTC, is valued at the
last bid and asked prices based upon quotes furnished by a market maker for such
securities.  In the absence of market  quotations,  the Fund will  determine the
value of bonds based upon quotes furnished by market makers, if available, or in
accordance with the procedures described herein. In that connection,  the Fund's
Board of  Directors  has  determined  that the Fund may use an  outside  pricing
service.  This service is provided by Interactive Data Corporation.  The pricing
service uses quotations  obtained from  investment  dealers or brokers and other
available  information in determining  value.  Short-term  debt  securities that
mature in 60 days or less are valued at amortized cost if their original term to
maturity from the date of purchase was 60 days or less,  or by amortizing  their
value on the 61st day prior to maturity if their term to maturity  from the date
of purchase  exceeded 60 days,  unless the Fund's Board of Directors  determines
that such valuation  does not represent fair value.  Securities for which market
quotations  are not readily  available are valued on a consistent  basis at fair
value as  determined  in good  faith by or under the  supervision  of the Fund's
officers in a manner specifically authorized by the Fund's Board of Directors.


         "When-issued  securities" are reflected in the assets of the Fund as of
the date the securities are purchased. Such investments are valued thereafter at
the mean between the last bid and asked prices obtained from recognized  dealers
in such securities. For valuation purposes,  quotations of foreign securities in
foreign  currencies are converted into U.S. dollar equivalents using the foreign
exchange equivalents in effect.


                                       10
<PAGE>

         The Fund's  Board of  Directors  may suspend the  determination  of the
Fund's net asset value for the whole or any part of any period (1) during  which
trading on the New York Stock  Exchange  ("NYSE") is restricted as determined by
the SEC or the NYSE is closed for other than weekend and holiday  closings,  (2)
when an emergency  exists,  as defined by the SEC, that makes it not  reasonably
practicable  for the Fund to  dispose  of  securities  owned by it or  fairly to
determine  the value of its net assets,  or (3) for such other period as the SEC
has by order permitted.


                        ALLOCATION OF PORTFOLIO BROKERAGE

         Purchases  and  sales  of  portfolio  securities  by  the  Fund  may be
principal  transactions.  In principal  transactions,  portfolio  securities are
normally  purchased  directly from the issuer or from an  underwriter  or market
maker for the securities.  There will usually be no brokerage commission paid by
the Fund for such  purchases.  Purchases  from  underwriters  will  include  the
underwriter's  commission or concession  and purchases  from dealers  serving as
market makers will include the spread  between the bid and asked price.  Certain
money market  instruments  may be purchased by the Fund directly from an issuer,
in which no commission or discounts are paid. The Fund may purchase fixed income
securities on a "net" basis with dealers acting as principal for its own account
without a stated commission, although the price of the security usually includes
a profit to the dealer.

         The Fund may deal in  securities  which are not  listed  on a  national
securities  exchange or the Nasdaq  national market system but are traded in the
OTC market.  The Fund also may  purchase  listed  securities  through the "third
market."  When  transactions  are executed in the OTC market,  the Fund seeks to
deal with the primary  market  makers,  but when  advantageous  they utilize the
services of brokers.

         In effecting  portfolio  transactions  for the Fund,  the Adviser seeks
best execution of trades either (1) at the most favorable and  competitive  rate
of  commission  charged  by any  broker or member  of an  exchange,  or (2) with
respect to agency transactions,  at a higher rate of commission if reasonable in
relation to brokerage and research services provided to the Fund or the Adviser,
by such member or broker.  In  addition,  upon the  instruction  of the Board of
Directors,  the  Adviser may use dealer  concessions  available  in  fixed-price
underwritings to pay for research services.  Such services may include,  but are
not  limited  to,  any  one or  more  of the  following:  information  as to the
availability  of  securities  for  purchase or sale and  statistical  or factual
information or opinions pertaining to investments.  The Adviser may use research
and  services  provided  to it by  brokers in  servicing  all the funds in First
Investors  Group of Funds;  however,  not all such  services  may be used by the
Adviser in  connection  with the Fund.  No  portfolio  orders are placed with an
affiliated   broker,  nor  does  any  affiliated  broker  participate  in  these
commissions.

         The Adviser may combine transaction orders placed on behalf of the Fund
and any  other  fund in the  First  Investors  Group of  Funds,  any  series  of
Executive   Investors  Trust  and  First  Investors  Life  for  the  purpose  of
negotiating  brokerage  commissions  or obtaining a more  favorable  transaction
price; and where appropriate,  securities  purchased or sold may be allocated in
accordance with written procedures approved by the Board of Directors.


         For the fiscal  year ended  December  31,  1994,  the Fund paid $781 in
brokerage  commissions,  all of which was paid to brokers who furnished research
services on portfolio transactions in the amount of 



                                       11
<PAGE>

$17,968.  For the fiscal  year ended  December  31,  1995,  the Fund did not pay
brokerage  commissions.  For the fiscal year ended  December 31, 1996,  the Fund
paid  $1,408  in  brokerage  commissions.  Of that  amount  $1,149  was  paid in
brokerage  commissions to brokers who furnished  research  services on portfolio
transactions in the amount of $209,005.


                          EMERGENCY PRICING PROCEDURES

         In the event that the Fund must halt operations  during any day that it
would  normally  be  required  to price  under Rule 22c-1  under the  Investment
Company of 1940 due to an  emergency  ("Emergency  Closed  Day"),  the Fund will
apply the following procedures:

         1. The Fund will make  every  reasonable  effort  to  segregate  orders
received  on the  Emergency  Closed  Day and give them the price that they would
have  received  but for the  closing.  The  Emergency  Closed  Day price will be
calculated  as soon as  practicable  after  operations  have resumed and will be
applied equally to sales, redemptions and repurchases that were in fact received
in the mail or otherwise on the Emergency Closed Day.

         2. For  purposes of  paragraph  1, an order will be deemed to have been
received by the Fund on an  Emergency  Closed Day,  even if neither the Fund nor
the Transfer  Agent is able to perform the  mechanical  processing of pricing on
that day, under the following circumstances:

                  (a) In the case of a mail order,  the order will be considered
         received by the Fund when the postal  service has delivered it to FIC's
         Woodbridge  offices prior to the close of regular  trading on the NYSE,
         or such other time as may be prescribed in the Fund's Prospectus; and

                  (b) In the case of a wire order,  including a Fund/SERV order,
         the order will be considered  received when it is received in good form
         by a FIC branch  office or an  authorized  dealer prior to the close of
         regular trading on the NYSE, or such other time as may be prescribed in
         the Fund's Prospectus.

         3. If the Fund is unable to segregate  orders received on the Emergency
Closed Day from those  received  on the next day the Fund is open for  business,
the Fund may give all orders the next price calculated after operations resume.

         4. Notwithstanding the foregoing, on business days in which the NYSE is
not open for regular trading,  the Fund may determine not to price its portfolio
securities  if such prices would lead to a distortion of the net asset value for
the Fund and its shareholders.


                                      TAXES

         In order to continue to qualify for treatment as a regulated investment
company ("RIC") under the Code, the Fund must distribute to its shareholders for
each  taxable  year  at  least  90% of its  investment  company  taxable  income
(consisting  generally of net investment income and net short-term  capital gain
and net gains from certain foreign currency  transactions) and must meet several
additional requirements.  These requirements include the following: (1) the Fund
must derive at least 90% of its gross income each  taxable year from  dividends,
interest,  payments with respect to securities  loans and gains from the sale or
other disposition of securities or foreign  currencies,  or other income derived
with respect to its business of investing in securities or those currencies; (2)
the Fund must derive less than 


                                       12
<PAGE>

30% of its gross income each taxable year from the sale or other  disposition of
securities,  or foreign  currencies that are not directly  related to the Fund's
principal  business of  investing  in  securities,  that were held for less than
three months ("Short-Short Limitation"); (3) at the close of each quarter of the
Fund's  taxable  year,  at least 50% of the value of its  total  assets  must be
represented by cash and cash items, U.S.  Government  securities,  securities of
other RICs and other securities, with those other securities limited, in respect
of any one  issuer,  to an amount  that  does not  exceed 5% of the value of the
Fund's  total assets and that does not  represent  more than 10% of the issuer's
outstanding  voting  securities;  and (4) at the  close of each  quarter  of the
Fund's  taxable year,  not more than 25% of the value of its total assets may be
invested in securities (other than U.S. Government  securities or the securities
of other RICs) of any one issuer.

         Dividends  and interest  received by the Fund may be subject to income,
withholding  or other taxes imposed by foreign  countries  that would reduce the
yield on its  securities.  Tax  conventions  between  certain  countries and the
United States may reduce or eliminate  these foreign  taxes,  however,  and many
foreign countries do not impose taxes on capital gains in respect of investments
by foreign investors.

         The Fund may acquire zero coupon  securities issued with original issue
discount.  As a holder of those securities,  the Fund must include in its income
the portion of the original issue discount that accrues on the securities during
the taxable year,  even if it receives no  corresponding  payment on them during
the year.  Similarly,  the Fund must include in its gross income  securities  it
receives as "interest" on pay-in-kind securities. Because the Fund annually must
distribute substantially all of its investment company taxable income, including
any  original  issue  discount  and  other  non-cash  income,   to  satisfy  the
Distribution  Requirement,  the Fund may be  required  in a  particular  year to
distribute as a dividend an amount that is greater than the total amount of cash
it  actually  receives.  Those  distributions  will be made from the Fund's cash
assets or from the proceeds of sales of portfolio securities,  if necessary. The
Fund may realize capital gains or losses from those sales,  which would increase
or decrease its  investment  company  taxable income and/or net capital gain. In
addition,  any such gains may be realized on the  disposition of securities held
for less than three  months.  Because of the  Short-Short  Limitation,  any such
gains  would  reduce the Fund's  ability  to sell  other  securities  or foreign
currency  positions,  held for less than three months that it might wish to sell
in the ordinary course of its portfolio management.


                               GENERAL INFORMATION

         AUDITS AND REPORTS.  The accounts of the Fund are audited  twice a year
by Tait,  Weller & Baker,  independent  certified public  accountants,  Two Penn
Center Plaza,  Philadelphia,  PA,  19102-1707.  Shareholders of the Fund receive
semi-annual and annual reports,  including audited financial  statements,  and a
list of securities owned.

         TRADING BY PORTFOLIO  MANAGERS AND OTHER  ACCESS  PERSONS.  Pursuant to
Section  17(j)  of the  1940 Act and  Rule  17j-1  thereunder,  the Fund and the
Adviser have adopted Codes of Ethics restricting  personal securities trading by
portfolio  managers and other access  persons of the Fund.  Among other  things,
such  persons,  except  the  Directors:  (a)  must  have all  non-exempt  trades
pre-cleared; (b) are restricted from short-term trading; (c) must have duplicate
statements and transactions  confirmations reviewed by a compliance officer; and
(d) are prohibited from purchasing securities of initial public offerings.


                                       13
<PAGE>

                                   APPENDIX A
                     DESCRIPTION OF COMMERCIAL PAPER RATINGS


STANDARD & POOR'S RATINGS GROUP

         S&P's commercial paper rating is a current assessment of the likelihood
of timely payment of debt considered short-term in the relevant market.  Ratings
are graded into several  categories,  ranging from "A-1" for the highest quality
obligations to "D" for the lowest.

         A-1 This highest category indicates that the degree of safety regarding
timely payment is strong.  Those issues  determined to possess  extremely strong
safety characteristics are denoted with a plus (+) designation.


MOODY'S INVESTORS SERVICE, INC.

         Moody's  short-term debt ratings are opinions of the ability of issuers
to repay punctually  senior debt obligations which have an original maturity not
exceeding  one  year.  Obligations  relying  upon  support  mechanisms  such  as
letters-of-credit and bonds of indemnity are excluded unless explicitly rated.

         PRIME-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior  ability for  repayment  of senior  short-term  debt  obligations.  P-1
repayment   ability  will  often  be   evidenced   by  many  of  the   following
characteristics:

         -        Leading market positions in well-established industries.
         -        High rates of return on funds employed.
         -        Conservative  capitalization  structure with moderate reliance
                  on debt and ample asset protection.
         -        Broad margins in earnings  coverage of fixed financial charges
                  and high internal cash generation.
         -        Well-established  access to a range of  financial  markets and
                  assured sources of alternate liquidity.


                                       14
<PAGE>



                           Financial Statements as of
                                December 31, 1996


Registrant  incorporates  by reference  the financial  statements  and report of
independent  auditors  contained in the Annual  Report to  shareholders  for the
fiscal year ended December 31, 1996 electronically  filed with the Commission on
March 5, 1997 (Accession Number: 0000928816-97-000069.


                                       15



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