SBL VARIABLE ANNUITY ACCOUNT IV
N-30D, 1996-07-10
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<PAGE>

VARIABLE
================================================================================
ANNUITY IV


1995
ANNUAL
REPORT




[SBLIC LOGO]

<PAGE>

A LETTER FROM THE PRESIDENT

     The key to Security Benefit's  record-setting year was our ability to focus
on building  value for our  policyholders  and customers by offering an array of
competitive  and  innovative  products  backed by  service  that we  believe  is
second-to-none.
     We have  grown into a diverse  financial  services  organization  with $5.7
billion in assets under management and statutory equity exceeding $200 million.
     Security Benefit is a leader in the variable annuity and 403(b) market, and
is ranked among the top 25 variable annuity providers in the country,  according
to Variable Annuity Research and Data Services (September 30, 1995).
     SERVICE,  STRENGTH  and  STABILITY  are  fundamental  to our  success,  and
distinguish us from our competitors in the financial field.
     SERVICE.  We use the power of advanced technology to provide our associates
with the necessary tools to deliver fast, accurate,  personalized service to our
customers.
     STRENGTH.  Security  Benefit's  financial  strength  is  reflected  in  the
consistently strong ratings we receive from the financial analysts who study our
industry.
     STABILITY.  Investment strategies have risen and fallen. Products have come
into vogue and gone out just as fast.  But we haven't  varied from our  original
purpose -- to care for and protect others.
     In the  coming  year  our  focus  will  continue  to be on  equity-oriented
products -- variable annuities,  mutual funds and variable life insurance. As we
go forward,  we will continue to build  financial  strength and provide  service
that exceeds the expectations of our customers.

HOWARD R. FRICKE

Howard R. Fricke
Chairman of the Board,
President and Chief Executive Officer

<PAGE>

                               BOARD OF DIRECTORS

HOWARD R. FRICKE                                      WILLIAM W. HANNA
Chairman of the Board,                                President & Chief
President & CEO                                       Operating Officer
The Security Benefit                                  Koch Industries
   Group of Companies                                 Wichita, Kansas
Topeka, Kansas
                                                      JOHN E. HAYES, JR.
THOMAS R. CLEVENGER                                   Chairman of the Board,
Wichita, Kansas                                       President & CEO
                                                      Western Resources, Inc.
SISTER LORETTO MARIE COLWELL                          Topeka, Kansas
President
St. Francis Hospital and                              LAIRD G. NOLLER
   Medical Center                                     President
Topeka, Kansas                                        Noller Enterprises
                                                      Topeka, Kansas
JOHN C. DICUS
Chairman of the Board                                 FRANK SABATINI
Capitol Federal Savings                               Chairman of the Board
   & Loan Association                                 and President
Topeka, Kansas                                        Capital City Bank
                                                      Topeka, Kansas
MELANIE S. FANNIN
President                                             ROBERT C. WHEELER
Kansas - Southwestern                                 President
   Bell Telephone                                     Hill's Pet Nutrition, Inc.
Topeka, Kansas                                        Topeka, Kansas


NOTICE OF POLICYOWNERS' MEETING

We  encourage  you to attend the annual  meeting of  policyowners  to be held on
Tuesday,  June 4, 1996 at Security  Benefit Life,  700 SW Harrison St.,  Topeka,
Kansas at 2:00 p.m. Each policyowner is entitled to vote, either in person or by
proxy, on all matters coming before the meeting.  Proxies are available from the
corporate  secretary  and must be  returned at least 30 days prior to the annual
meeting.

This report is submitted only for the general  information  of Security  Benefit
Life Variable Annuity  contractowners and participants and is not authorized for
distribution to the public.

                                                       For More Information Call
                                                       1-800-888-2461

                                  [SBLIC LOGO]
                                  700 SW Harrison St., Topeka, Kansas 66636-0001

<PAGE>

                         Report of Independent Auditors

The Contract Owners of SBL Variable
Annuity Account IV and The Board of Directors
Security Benefit Life Insurance Company

We have audited the  accompanying  balance sheet of SBL Variable Annuity Account
IV (the  Company)  as of  December  31,  1995,  and  the  related  statement  of
operations  and changes in net assets for the year then ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation  of  investments  owned as of December 31, 1995, by  correspondence
with the custodian.  An audit also includes assessing the accounting  principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of SBL Variable Annuity Account IV
at December 31, 1995,  and the results of its  operations and changes in its net
assets for the year then ended in conformity with generally accepted  accounting
principles.

                                                               Ernst & Young LLP
February 2, 1996

<PAGE>

SBL VARIABLE ANNUITY ACCOUNT IV
================================================================================
BALANCE SHEET                                                  DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS                                                    (DOLLARS IN THOUSANDS)
  Investments:
    SBL Fund:
      Series A (Growth Series) - 3,422,717 shares at net
        asset value of $21.03 per share (cost, $61,660)                 $ 71,980
      Series B (Growth-Income Series) - 1,295,000 shares at
        net asset value of $33.95 per share (cost, $35,522)               43,965
      Series C (Money Market Series) - 1,699,598 shares at
        net asset value of $12.34 per share (cost, $21,225)               20,973
      Series D (Worldwide Equity Series) - 1,490,129 shares
        at net asset value of $5.56 per share (cost, $7,379)               8,285
      Series E (High Grade Income Series) - 458,346 shares
        at net asset value of $12.86 per share (cost, $5,693)              5,894
      Series S (Social Awareness Series) - 44,510 shares at
        net asset value of $16.49 per share (cost, $617)                     734
      Series J (Emerging Growth Series) - 263,051 shares at
        net asset value of $16.06 per share (cost, $3,493)                 4,224
      Series K (Global Aggressive Bond Series) - 51,456 shares
        at net asset value of $10.22 per share (cost, $515)                  526
      Series M (Specialized Asset Allocation Series) - 69,524
        shares at net asset value of $10.71 per share (cost, $706)           745
      Series N (Managed Asset Allocation Series) - 119,382 shares
        at net asset value of $10.73 per share (cost, $1,196)              1,281
      Series O (Equity Income Series) - 32,216 shares at
        net asset value of $11.70 per share (cost, $330)                     377
                                                                        --------
Total assets                                                            $158,984
                                                                        ========

LIABILITIES AND NET ASSETS

Mortality guarantee payable                                             $     89
Net assets are represented by (NOTE 3):

                                   NUMBER         UNIT
                                   OF UNITS       VALUE     AMOUNT
                                   --------       -----     ------
  Series A4:
    Accumulation units             1,196,787     $59.87     $71,649
    Annuity reserves                   5,461      59.87         327       71,976
                                                            -------
  Series B4:
    Accumulation units               729,949      59.19      43,204
    Annuity reserves                  11,515      59.19         682       43,886
                                                            -------
  Series C4:
    Accumulation units               804,494      25.63      20,616
    Annuity reserves                  13,754      25.63         352       20,968
                                                            -------
  Series D4:
    Accumulation units               570,700      14.44       8,240
    Annuity reserves                   3,075      14.44          44        8,284
                                                            -------
  Series E4:
    Accumulation units               233,788      25.14       5,878
    Annuity reserves                     669      25.14          17        5,895
                                                            -------
  Series S4:
    Accumulation units                43,498      16.87                      734
  Series J4:
    Accumulation units               262,607      16.07       4,219
    Annuity reserves                     351      16.07           5        4,224
                                                            -------
  Series K4:
    Accumulation units                48,868      10.76                      526
  Series M4:
    Accumulation units                69,524      10.71                      744
  Series N4:
    Accumulation units               119,382      10.73                    1,281
  Series O4:
    Accumulation units                32,216      11.70                      377
                                                                        ========
Total liabilities and net assets                                        $158,984
                                                                        ========

                            SEE ACCOMPANYING NOTES.

<PAGE>

SBL VARIABLE ANNUITY ACCOUNT IV
================================================================================
STATEMENT OF OPERATIONS AND
CHANGES IN NET ASSETS                               YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
                                                    (IN THOUSANDS)

<TABLE>
<CAPTION>
                                    SERIES    SERIES    SERIES    SERIES   SERIES   SERIES  SERIES   SERIES  SERIES  SERIES   SERIES
                                      A4        B4        C4        D4       E4       S4      J4       K4      M4      N4       O4
                                    ------------------------------------------------------------------------------------------------
<S>                                 <C>       <C>       <C>       <C>      <C>      <C>     <C>       <C>     <C>    <C>       <C> 
Dividend distributions              $   537   $   706   $   924   $    1   $  341   $  3    $    -    $ 25    $  -   $    -    $  -
Expenses (NOTE 2):
  Mortality and expense risk fee       (387)     (508)     (336)     (10)    (122)     -        (1)      -      (1)      (1)     (1)
  Administrative fee                    (44)      (45)      (21)      (1)      (6)     -         -       -       -        -       -
                                    ------------------------------------------------------------------------------------------------
Net investment income (loss)            106       153       567      (10)     213      3        (1)     25      (1)      (1)     (1)

Capital gains distributions           2,262         -         -       92        -      -         -       2       -        -       -

Realized gain (loss) on investments   1,373     2,299       178      543     (235)    29       574       -       1        -       -

Unrealized appreciation
  (depreciation) on investments      17,288     7,644      (318)     686      894    125       673      11      39       85      47
                                    ------------------------------------------------------------------------------------------------
Net realized and unrealized
  gain (loss) on investments         20,923     9,943      (140)   1,321      659    154     1,247      13      40       85      47
                                    ------------------------------------------------------------------------------------------------
Net increase in net assets
  resulting from operations          21,029    10,096       427    1,311      872    157     1,246      38      39       84      46

Net assets at beginning of year      67,102    37,841    10,275    7,396    6,291    610     8,968       -       -        -       -

Variable annuity deposits
  (NOTES 2 AND 3)                     7,128     3,277    18,728    6,007      970    236     1,080     500     705    1,198     331

Terminations and withdrawals
  (NOTES 2 AND 3)                   (23,116)   (7,198)   (8,426)  (6,415)  (2,230)  (269)   (7,050)    (12)      -       (1)      -

Annuity payments (NOTES 2 AND 3)       (160)      (64)      (43)     (15)      (8)     -       (20)      -       -        -       -

Net mortality guarantee transfer         (7)      (66)        7        -        -      -         -       -       -        -       -
                                    ================================================================================================
Net assets at end of year           $71,976   $43,886   $20,968   $8,284   $5,895   $734    $4,224    $526    $744   $1,281    $377
                                    ================================================================================================
</TABLE>

                             SEE ACCOMPANYING NOTES.

<PAGE>

SBL VARIABLE ANNUITY ACCOUNT IV
================================================================================
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION  - SBL  Variable  Annuity  Account IV (the  Account)  is a separate
account of  Security  Benefit  Life  Insurance  Company  (SBL).  The  Account is
registered as a unit investment trust under the Investment  Company Act of 1940,
as amended.  All deposits  received by the Account have been invested in the SBL
Fund, a mutual fund not  otherwise  available to the public.  As directed by the
owners, amounts deposited may be invested in shares of Series A (Growth Series -
emphasis on capital appreciation),  Series B (Growth-Income Series - emphasis on
capital appreciation with secondary emphasis on income),  Series C (Money Market
Series - emphasis on capital  preservation  while generating  interest  income),
Series D (Worldwide Equity Series - emphasis on long-term capital growth through
investment  in foreign and domestic  common  stocks and  equivalents),  Series E
(High  Grade  Income  Series -  emphasis  on current  income  with  security  of
principal),  Series S (Social Awareness Series - emphasis on high total return),
Series J (Emerging  Growth Series - emphasis on capital  appreciation),  and the
following new series introduced on June 1, 1995:

    Series K (Global  Aggressive  Bond  Series),  with  emphasis on high current
    income and  secondary  emphasis on capital  appreciation  by  investing in a
    combination of foreign and domestic high yield securities.

    Series M (Specialized Asset Allocation Series),  with emphasis on high total
    return  consisting  of  capital  appreciation  and  current  income  through
    investment in a wide range of investment categories and market sectors, both
    domestic and foreign.

    Series N (Managed Asset Allocation  Series),  with emphasis on high level of
    total return by investing  primarily in a diversified  portfolio of debt and
    equity securities.

    Series O (Equity  Income  Series),  with  emphasis on  substantial  dividend
    income and capital  appreciation by investing  primarily in  dividend-paying
    common stocks of established companies.

Under the terms of the investment advisory contracts,  portfolio  investments of
the  underlying  mutual fund are made by Security  Management  Company  (SMC), a
wholly-owned  subsidiary of Security  Benefit Group,  Inc. (SBG), a wholly-owned
subsidiary of SBL. SMC has engaged Lexington  Management  Corporation to provide
sub-advisory services for the Worldwide Equity Series and Global Aggressive Bond
Series and has engaged T. Rowe Price  Associates,  Inc. to provide  sub-advisory
services for the Managed Asset  Allocation  Series and the Equity Income Series.
SMC has also entered into agreements with Templeton Quantitative Advisors,  Inc.
and Meridian Investment  Management  Corporation to provide certain quantitative
research services with respect to the Specialized Asset Allocation Series.

<PAGE>

SBL VARIABLE ANNUITY ACCOUNT IV
================================================================================
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVESTMENT  VALUATION  -  Investments  in mutual  fund shares are carried in the
balance sheet at market value (net asset value of the  underlying  mutual fund).
The  first-in,  first-out  cost  method is used to  determine  gains and losses.
Security transactions are accounted for on the trade date.

The cost of  investments  purchased and proceeds from  investments  sold were as
follows:

              COST OF       PROCEEDS                     COST OF       PROCEEDS 
             PURCHASES     FROM SALES                   PURCHASES     FROM SALES
             ---------     ----------                   ---------     ----------
                  (IN THOUSANDS)                             (IN THOUSANDS)     

Series A      $10,467       $24,253        Series J        1,164         7,156
Series B        4,355         8,173        Series K        1,027           512
Series C       19,843         9,005        Series M        1,207           501
Series D        6,212         6,551        Series N        1,197             1
Series E        1,419         2,475        Series O          331             1
Series S          241           271

SBG's  investment in the subaccounts  represented the following  number of units
and  contract  value of SBL  Variable  Annuity  Account  IV  contracts  owned at
December 31, 1995 (DOLLARS IN THOUSANDS):

                                                            NUMBER      CONTRACT
                                                           OF UNITS      VALUE
                                                           --------     --------
Series K4 (Global Aggressive Bond Series)                   48,847       $  526
Series M4 (Specialized Asset Allocation Series)             50,000          536
Series N4 (Managed Asset Allocation Series)                115,000        1,234
Series O4 (Equity Income Series)                            25,000          292

ANNUITY  RESERVES - Annuity  reserves relate to contracts which have matured and
are in the payout  stage.  Such  reserves are computed on the basis of published
mortality  tables,  using assumed  interest rates that will provide  reserves as
prescribed by law. In cases where the payout option selected is life contingent,
SBL periodically  recalculates the required annuity reserves,  and any resulting
adjustment is either charged or credited to SBL and not to the Account.

REINVESTMENT OF DIVIDENDS - Dividend and capital gains distributions paid by the
mutual  fund  to the  Account  are  reinvested  in  additional  shares  of  each
respective Series.  Dividend income and capital gains distributions are recorded
as income on the ex-dividend date.

FEDERAL  INCOME TAXES - Under  current law, no federal  income taxes are payable
with respect to the Account.

USE OF ESTIMATES - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

<PAGE>

SBL VARIABLE ANNUITY ACCOUNT IV
================================================================================
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

2.  VARIABLE ANNUITY CONTRACT CHARGES

SBL deducts an administrative  fee of $30 per year for each contract.  Mortality
and expense risks assumed by SBL are  compensated  for by a fee equivalent to an
annual rate ranging from 0.85% to 1.1% of the asset value of each  contract,  of
which 0.7% is for  assuming  mortality  risks and the  remainder is for assuming
expense risks.

When  applicable,  an amount for state  premium taxes is deducted as provided by
pertinent  state  law,  either  from the  purchase  payments  or from the amount
applied to effect an annuity at the time annuity payments commence.

A contingent  deferred  sales  charge is assessed  against  certain  withdrawals
during the first 10 years of the contract,  declining  from 9% in the first year
to 1% in the tenth year. Such surrender  charges and other contract charges were
insignificant during 1995.

3.  SUMMARY OF UNIT TRANSACTIONS

                              UNITS                                   UNITS     
                          (IN THOUSANDS)                          (IN THOUSANDS)

Series A4:                              Series J4:                        
  Variable annuity deposits    140        Variable annuity deposits     72
  Terminations, withdrawals               Terminations, withdrawals       
    and annuity payments       471          and annuity payments       476
Series B4:                              Series K4:                        
  Variable annuity deposits     64        Variable annuity deposits     50
  Terminations, withdrawals               Terminations, withdrawals       
    and annuity payments       153          and annuity payments         1
Series C4:                              Series M4:                        
  Variable annuity deposits    749        Variable annuity deposits     70
  Terminations, withdrawals             Series N4:                        
    and annuity payments       353        Variable annuity deposits    119
Series D4:                              Series O4:                        
  Variable annuity deposits    478        Variable annuity deposits     32
  Terminations, withdrawals
    and annuity payments       472
Series E4:
  Variable annuity deposits     42
  Terminations, withdrawals
    and annuity payments       104
Series S4:
  Variable annuity deposits     16
  Terminations, withdrawals
    and annuity payments        19

<PAGE>

[THE SECURITY BENEFIT GROUP OF COMPANIES LOGO]                     BULK RATE
700 SW Harrison St., Topeka, Kansas 66636-0001                 U.S. POSTAGE PAID
                                                                   TOPEKA, KS
                                                                 PERMIT NO. 428


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