KILICO VARIABLE ANNUITY SEPARATE ACCOUNT, 485BPOS, 2000-10-16

KILICO VARIABLE ANNUITY SEPARATE ACCOUNT
485BPOS, 2000-10-16

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 2000

COMMISSION FILE NOS. 2-72671
811-3199
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-4

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER [ ]
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 30 [X]
And
REGISTRATION STATEMENT UNDER [ ]
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 57 [X]
</TABLE>

KILICO VARIABLE ANNUITY SEPARATE ACCOUNT
(EXACT NAME OF REGISTRANT)

KEMPER INVESTORS LIFE INSURANCE COMPANY
(NAME OF INSURANCE COMPANY)

<TABLE>
<S> <C>
1 KEMPER DRIVE, LONG GROVE, ILLINOIS 60049
(Address of Insurance Company's Principal Executive (Zip Code)
Offices)
Insurance Company's Telephone Number, including Area Code: (847) 550-5500
</TABLE>

DEBRA P. REZABEK, ESQ.
1 KEMPER DRIVE
LONG GROVE, ILLINOIS 60049
(Name and Address of Agent for Service)

COPIES TO:

<TABLE>
<S> <C>
FRANK J. JULIAN, ESQ. JOAN E. BOROS, ESQ.
KEMPER INVESTORS LIFE INSURANCE COMPANY JORDEN BURT BOROS
1 KEMPER DRIVE LONG CICCHETTI BERENSON & JOHNSON
GROVE, ILLINOIS 60049 1025 THOMAS JEFFERSON STREET, N.W.
SUITE 400E WASHINGTON, D.C. 20007
</TABLE>

Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective (check appropriate
box)

[X] immediately upon filing pursuant to paragraph (b) of Rule 485

[ ] on (date) pursuant to paragraph (b) of Rule 485

[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485
[ ] on (date) pursuant to paragraph (a)(i) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485

If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

Title of Securities being Registered:

Units of interest in Separate Account under variable annuity contracts

No filing fee is due because an indefinite number of shares is deemed to
have been registered in reliance on Section 24(f) of the Investment Company Act
of 1940.
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<PAGE> 2

This Amendment to the Registration Statement on Form N-4 (the "Registration
Statement") is being filed pursuant to Rule 485(b) under the Securities Act of
1933, as amended. This Amendment is being filed to describe in supplements to
the Prospectus and to the Statement of Additional Information, each dated May 1,
2000, for the Kemper Advantage III variable annuity contract the availability of
three additional subaccounts of the Registrant and the corresponding underlying
funds and to make certain non-material changes to Part C of such Registration
Statement. Accordingly, this Amendment does not otherwise delete, amend or
supercede any prospectus, Statement of Additional Information, exhibit,
undertaking, or other information contained in the Registration Statement.

<PAGE> 3

SUPPLEMENT DATED OCTOBER 16, 2000
TO PROSPECTUS DATED MAY 1, 2000 FOR
KEMPER INVESTORS LIFE INSURANCE COMPANY

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

PERIODIC PAYMENT
VARIABLE ANNUITY CONTRACTS

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

KEMPER ADVANTAGE III
ISSUED BY
KILICO VARIABLE ANNUITY SEPARATE ACCOUNT
OF
KEMPER INVESTORS LIFE INSURANCE COMPANY

This Supplement amends your Prospectus and describes new Subaccount investment
options available under your Contract. Please read this Supplement carefully and
keep it with your Prospectus for future reference.

Effective October 16, 2000, three new Subaccounts are being added as investment
options under the Contracts. Pending regulatory approval, the new Subaccounts
may not be available in all states.

The new Subaccounts invest in the following:

- KEMPER TECHNOLOGY GROWTH PORTFOLIO OF KEMPER VARIABLE SERIES

- ALGER AMERICAN MIDCAP GROWTH PORTFOLIO OF THE ALGER AMERICAN FUND

- WARBURG PINCUS TRUST-EMERGING MARKETS PORTFOLIO OF WARBURG PINCUS TRUST

Prospectuses for the new Portfolios are attached to this Supplement.

The changes to the Prospectus follow with references to those parts of the
Prospectus that are modified by this Supplement.

The second paragraph on the cover page of the Prospectus is revised to read as
follows:

"You may allocate purchase payments to the General Account or to one or more
of the variable options. The Contract currently offers thirty-seven
investment options, each being a Subaccount of the KILICO Variable Annuity
Separate Account. Currently, you may choose among the following Portfolios:

KEMPER VARIABLE SERIES

<TABLE>
<S> <C>
- Kemper Money Market - Kemper Investment Grade Bond
- Kemper Technology Growth - Kemper Contrarian Value
- Kemper Total Return - Kemper Small Cap Value
- Kemper High Yield - Kemper Value + Growth
- Kemper Growth - Kemper Horizon 20+
- Kemper Government Securities - Kemper Horizon 10+
- Kemper International - Kemper Horizon 5
- Kemper Small Cap Growth
</TABLE>

JANUS ASPEN SERIES

<TABLE>
<S> <C>
- Janus Aspen Growth - Janus Aspen Worldwide Growth
- Janus Aspen Aggressive Growth - Janus Aspen Balanced
</TABLE>
<PAGE> 4

LEXINGTON NATURAL RESOURCES TRUST

LEXINGTON EMERGING MARKETS FUND, INC.

FIDELITY VARIABLE INSURANCE PRODUCTS FUND ("VIP") (INITIAL CLASS SHARES)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II ("VIP II") (INITIAL CLASS SHARES)

<TABLE>
<S> <C>
- Fidelity VIP Equity-Income - Fidelity VIP II Asset Manager
- Fidelity VIP Growth - Fidelity VIP II Index 500
- Fidelity VIP II Contrafund(R)
</TABLE>

SCUDDER VARIABLE LIFE INVESTMENT FUND ("SCUDDER VLIF") (CLASS A SHARES)

<TABLE>
<S> <C>
- Scudder VLIF Bond - Scudder VLIF International
- Scudder VLIF Capital Growth
</TABLE>

THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.

J.P. MORGAN SERIES TRUST II

- J.P. Morgan Small Company

THE ALGER AMERICAN FUND

<TABLE>
<S> <C>
- Alger American Growth - Alger American Small Capitalization
- Alger American MidCap Growth
</TABLE>

AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. ("VP")

<TABLE>
<S> <C>
- American Century VP Income & Growth - American Century VP Value
</TABLE>

WARBURG PINCUS TRUST

- Warburg Pincus Trust-Emerging Markets"

The definitions of "Fund or Funds" and "Subaccounts," appearing, respectively,
on pages 1 and 2 of the Prospectus under the section entitled "DEFINITIONS," are
revised to read as follows:

"Fund or Funds -- Kemper Variable Series, Janus Aspen Series, Lexington
Natural Resources Trust, Lexington Emerging Markets Fund, Inc., Fidelity
Variable Insurance Products Fund, Fidelity Variable Insurance Products Fund
II, Scudder Variable Life Investment Fund, The Dreyfus Socially Responsible
Growth Fund, Inc., J.P. Morgan Series Trust II, The Alger American Fund,
American Century Variable Portfolios, Inc. and Warburg Pincus Trust,
including any Portfolios thereunder."

"Subaccounts -- The thirty-seven subdivisions of the Separate Account, the
assets of which consist solely of shares of the corresponding Fund or
Portfolio of a Fund."

The table entitled "SUMMARY OF EXPENSES," appearing on pages 4 and 5 of the
Prospectus, is revised to read as follows:
<PAGE> 5

"SUMMARY OF EXPENSES

<TABLE>
<S> <C> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases (as a percentage of purchase payments).................................. None
Contingent Deferred Sales Load (as a percentage
of amount surrendered)(1)
YEAR OF WITHDRAWAL AFTER PURCHASE
First year........................................... 6%
Second year.......................................... 5%
Third year........................................... 4%
Fourth year.......................................... 3%
Fifth year........................................... 2%
Sixth year........................................... 1%
Seventh year and following........................... 0%
Surrender Fees............................................................................................ None
Exchange Fee.............................................................................................. None
MAXIMUM ANNUAL CONTRACT FEE (Records Maintenance Charge)(2)............................................... $30
SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average daily account value)
Mortality and Expense Risk.............................................................................. 1.00%
Administration.......................................................................................... .30%
Account Fees and Expenses............................................................................... 0%
Total Separate Account Annual Expenses.................................................................. 1.30%
</TABLE>

FUND ANNUAL EXPENSES
(as percentage of each Portfolio's average net assets, in some cases after
expense waiver or reimbursement, for the period ended December 31, 1999. Future
Portfolio expenses may be greater or less than those shown.)

<TABLE>
<CAPTION>
KEMPER
KEMPER TECHNOLOGY KEMPER KEMPER KEMPER
MONEY GROWTH TOTAL HIGH KEMPER GOVERNMENT KEMPER
MARKET (3)(4) RETURN YIELD GROWTH SECURITIES INTERNATIONAL
------ ---------- ------ ------ ------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees............................. .50% .51% .55% .60% .60% .55% .75%
Other Expenses.............................. .04 .44 .06 .07 .06 .08 .19
--- --- --- --- --- --- ---
Total Portfolio Annual Expenses............. .54% .95% .61% .67% .66% .63% .94%
=== === === === === === ===
</TABLE>

<TABLE>
<CAPTION>
KEMPER KEMPER
KEMPER INVESTMENT KEMPER SMALL KEMPER KEMPER
SMALL CAP GRADE CONTRARIAN CAP VALUE+ HORIZON
GROWTH BOND(9) VALUE(9) VALUE(9) GROWTH(9) 20+(9)
--------- ---------- ---------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Management Fees..................................... .65% .60% .75% .75% .75% .60%
Other Expenses...................................... .06 .05 .05 .09 .08 .18
--- --- --- --- --- ---
Total Portfolio Annual Expenses..................... .71% .65% .80% .84% .83% .78%
=== === === === === ===
</TABLE>

<TABLE>
<CAPTION>
JANUS
KEMPER KEMPER JANUS JANUS ASPEN ASPEN
HORIZON HORIZON ASPEN AGGRESSIVE WORLDWIDE JANUS ASPEN
10+(9) 5(9) GROWTH(10) GROWTH(10) GROWTH(10) BALANCED(10)
------- ------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees................................. .60% .60% .65% .65% .65% .65%
Other Expenses.................................. .12 .16 .02 .02 .05 .02
--- --- --- --- --- ---
Total Portfolio Annual Expenses................. .72% .76% .67% .67% .70% .67%
=== === === === === ===
</TABLE>

<TABLE>
<CAPTION>
FIDELITY FIDELITY
VIP VIP II FIDELITY
LEXINGTON LEXINGTON EQUITY- FIDELITY ASSET VIP II
NATURAL EMERGING INCOME VIP MANAGER INDEX
RESOURCES MARKETS (5) GROWTH (5) (5) 500(6)
--------- --------- --------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Management Fees.................................... 1.00% .85% .48% .58% .53% .24%
Other Expenses..................................... .33 .85 .08 .07 .09 .04
---- ---- --- --- --- ---
Total Portfolio Annual Expenses.................... 1.33% 1.70% .56% .65% .62% .28%
==== ==== === === === ===
</TABLE>
<PAGE> 6

<TABLE>
<CAPTION>
FIDELITY SCUDDER DREYFUS
VIP II SCUDDER VLIF SCUDDER SOCIALLY J.P. MORGAN
CONTRA- VLIF CAPITAL VLIF RESPONSIBLE SMALL
FUND(5) BOND GROWTH INTERNATIONAL GROWTH COMPANY(7)
-------- ------- ------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Management Fees...................................... .58% .48% .46% .85% .75% .60%
Other expenses....................................... .07 .09 .03 .18 .04 .55
--- --- --- ---- --- ----
Total Portfolio Annual Expenses...................... .65% .57% .49% 1.03% .79% 1.15%
=== === === ==== === ====
</TABLE>

<TABLE>
<CAPTION>
AMERICAN
ALGER ALGER CENTURY WARBURG
ALGER AMERICAN AMERICAN VP AMERICAN PINCUS TRUST-
AMERICAN MIDCAP SMALL INCOME & CENTURY VP EMERGING
GROWTH GROWTH CAPITALIZATION GROWTH VALUE(8) MARKETS(11)
-------- -------- -------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Management Fees............................. .75% .80% .85% .70% 1.00% 0.00%
Other expenses.............................. .04 .05 .05 .00 .00 1.40
--- --- --- --- ---- ----
Total Portfolio Annual Expenses............. .79% .85% .90% .70% 1.00% 1.40%
=== === === === ==== ====
</TABLE>

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

(1) An Owner may withdraw up to 10% of the Contract Value less Debt in any
Contract Year without assessment of any charge. Under certain circumstances the
contingent deferred sales charge may be reduced or waived, including when
certain annuity options are selected.

(2) The Records Maintenance Charge will be reduced or waived for Contracts in
the situations detailed in the Prospectus. For Contracts with Contract Value of
between $25,000 and $50,000, the charge is $15.00. There is no charge for
Contract Value over $50,000.

(3) Portfolios commenced operations on May 1, 1999. "Other Expenses" have been
annualized.

(4) Pursuant to their respective agreements with Kemper Variable Series, the
investment manager and the accounting agent have agreed, for the one year period
commencing on May 1, 2000, to limit their respective fees and to reimburse other
expenses to the extent necessary to limit total operating expenses of the Kemper
Technology Growth Portfolio of Kemper Variable Series to the amount set forth in
the table above. Without taking into effect this expense cap for the Kemper
Technology Growth Portfolio of Kemper Variable Series: Management Fees would be
.75%; Other Expenses are .44%; and Total Portfolio Annual Expenses are 1.19%.

(5) A portion of the brokerage commissions that certain Portfolios pay was used
to reduce expenses. In addition, certain Portfolios have entered into
arrangements with their custodian whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of Portfolio expenses.
Without these reductions, Management Fees, Other Expenses and Total Portfolio
Annual Expenses would have been .48%, .09% and .57%, respectively, for the
Fidelity VIP Equity-Income Portfolio, .58%, .08% and .66%, respectively, for the
Fidelity VIP Growth Portfolio; .53%, .10% and .63%, respectively, for the
Fidelity VIP II Asset Manager Portfolio; and .58%, .09% and .67%, respectively,
for the Fidelity VIP II Contrafund Portfolio.

(6) FMR agreed to reimburse a portion of the Fidelity VIP II Index 500
Portfolio's expenses during this period. Without this reimbursement, Management
Fees, Other Expenses and Total Portfolio Annual Expenses would have been .24%,
.10% and .34%, respectively.

(7) Reflects an agreement by Morgan Guaranty Trust Company of New York to
reimburse the Portfolio to the extent expenses exceed 1.15%. Absent fee waiver
and expense reimbursement, total operating expenses would have been 2.57%.

(8) The American Century VP Value Portfolio has a stepped fee schedule. The
fees are 1.00% for the first $500 million of average net assets, 0.95% for the
next $500 million of average net assets and 0.90% thereafter.

(9) Pursuant to their respective agreements with Kemper Variable Series, the
investment manager and the accounting agent have agreed, for the one year period
commencing on May 1, 2000, to limit their respective fees and to reimburse other
expenses, to the extent necessary to limit total operating expenses of the
following described Portfolios to the amounts set forth after the Portfolio
names: Kemper Value + Growth Portfolio (.84%), Kemper Contrarian Value Portfolio
(.80%), Kemper Small Cap Value Portfolio (.84%), Kemper Horizon 5 Portfolio
(.97%), Kemper Horizon 10+ Portfolio (.83%), Kemper Horizon 20+ Portfolio
(.93%), and Kemper Investment Grade Bond Portfolio (.80%). The amounts set forth
in the table above reflect actual expenses for the past fiscal year, which were
at or lower than these expense limits, except for Kemper Contrarian Value
Portfolio, which reflects the benefit of custodial credits. Without these
credits, Management Fees, Other Expenses and Total Portfolio Annual Expenses for
Kemper Contrarian Value Portfolio would have been .75%, .06% and .81%,
respectively.

(10) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for Janus Aspen
Growth, Janus Aspen Aggressive Growth, Janus Aspen Worldwide Growth and Janus
Aspen Balanced Portfolios. All expenses are shown without the effect of any
expenses offset arrangements.

(11) The expense figures shown are net of certain fee waivers or reductions from
the Portfolio's investment adviser and/or its affiliates based on actual
expenses for fiscal year ended December 31, 1999. Without such waivers,
Management Fees, Other Expenses and Total Portfolio Annual Expenses for the
Warburg Pincus Trust-Emerging Markets Portfolio would have been 1.25%, 1.88% and
3.13%, respectively. Fee waivers and expense reimbursements may be discontinued
at any time."

<PAGE> 7

The table entitled "EXAMPLE," appearing on page 6 of the Prospectus, is revised
to read as follows:

"EXAMPLE

<TABLE>
<CAPTION>
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
If you surrender your Contract at Kemper Money Market #1 $81 $104 $127 $223
the end of the period shown, you Kemper Technology Growth 85 116 -- --
would pay the following expenses Kemper Total Return 82 106 130 231
on a $1,000 investment, assuming Kemper High Yield 83 108 133 237
a 5% annual return on assets: Kemper Growth 82 107 133 236
Kemper Government Securities 82 107 131 233
Kemper International 85 116 147 265
Kemper Small Cap Growth 83 109 135 241
Kemper Investment Grade Bond 82 107 132 235
Kemper Contrarian Value 84 112 140 251
Kemper Small Cap Value 84 113 142 255
Kemper Value+Growth 84 112 141 254
Kemper Horizon 20+ 84 111 139 249
Kemper Horizon 10+ 83 109 136 242
Kemper Horizon 5 83 110 138 247
Janus Aspen Growth 83 108 133 237
Janus Aspen Aggressive Growth 83 108 133 237
Janus Aspen Worldwide Growth 83 109 135 240
Janus Aspen Balanced 83 108 133 237
Lexington Natural Resources 89 127 166 305
Lexington Emerging Markets 92 138 185 341
Fidelity VIP Equity-Income 81 104 128 225
Fidelity VIP Growth 82 107 132 235
Fidelity VIP II Asset Manager 82 106 131 232
Fidelity VIP II Index 500 79 96 113 195
Fidelity VIP II Contrafund 82 107 132 235
Scudder VLIF Bond 82 105 -- --
Scudder VLIF Capital Growth 81 102 -- --
Scudder VLIF International 86 118 -- --
Dreyfus Socially Responsible Growth 84 111 -- --
J.P. Morgan Small Company 87 122 -- --
Alger American Growth 84 111 -- --
Alger American MidCap Growth 84 113 -- --
Alger American Small Capitalization 85 115 -- --
American Century VP Income & Growth 83 109 -- --
American Century VP Value 86 118 -- --
Warburg Pincus Trust-Emerging Markets 90 129 -- --

If you do not surrender your Kemper Money Market #1 $19 $ 60 $103 $223
Contract, you would pay the Kemper Technology Growth 24 73 -- --
following expenses on a $1,000 Kemper Total Return 20 62 107 231
investment, assuming 5% annual Kemper High Yield 21 64 110 237
return on assets: Kemper Growth 21 64 110 236
Kemper Government Securities 20 63 108 233
Kemper International 24 72 124 265
Kemper Small Cap Growth 21 65 112 241
Kemper Investment Grade Bond 21 64 109 235
Kemper Contrarian Value 22 68 117 251
Kemper Small Cap Value 23 69 119 255
Kemper Value+Growth 22 69 118 254
Kemper Horizon 20+ 22 68 116 249
Kemper Horizon 10+ 21 66 113 242
</TABLE>

<PAGE> 8

<TABLE>
<CAPTION>
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
Kemper Horizon 5 $22 $ 67 $115 $247
Janus Aspen Growth 21 64 110 237
Janus Aspen Aggressive Growth 21 64 110 237
Janus Aspen Worldwide Growth 21 65 112 240
Janus Aspen Balanced 21 64 110 237
Lexington Natural Resources 28 84 144 305
Lexington Emerging Markets 31 96 163 341
Fidelity VIP Equity-Income 20 61 104 225
Fidelity VIP Growth 21 64 109 235
Fidelity VIP II Asset Manager 20 63 107 232
Fidelity VIP II Index 500 17 52 90 195
Fidelity VIP II Contrafund 21 64 109 235
Scudder VLIF Bond 20 61 -- --
Scudder VLIF Capital Growth 19 59 -- --
Scudder VLIF International 24 75 -- --
Dreyfus Socially Responsible Growth 22 68 -- --
J.P. Morgan Small Company 26 79 -- --
Alger American Growth 22 68 -- --
Alger American MidCap Growth 23 70 -- --
Alger American Small Capitalization 23 71 -- --
American Century VP Income & Growth 21 65 -- --
American Century VP Value 24 74 -- --
Warburg Pincus Trust-Emerging Markets 28 87 -- --
</TABLE>

The purpose of the preceding table, which includes the "SUMMARY OF
EXPENSES" is to assist you in understanding the various costs and
expenses that an Owner in a Subaccount will bear directly or indirectly.
The table reflects expenses of both the Separate Account and the Funds.
The Example should not be considered to be a representation of past or
future expenses and does not include the deduction of state premium
taxes, which may be assessed before or upon annuitization. Actual
expenses may be greater or less than those shown. Management Fees and
Other Expenses in the "SUMMARY OF EXPENSES" for the Funds have been
provided by the Funds' investment managers or advisers and have not been
independently verified. The Example assumes a 5% annual rate of return
pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past
or future performance of any Subaccount. The Records Maintenance Charge
is a single charge; it is not a separate charge for each Subaccount. In
addition, the effect of the Records Maintenance Charge has been
reflected in the Example by applying the percentage derived by dividing
the total amounts of annual Records Maintenance Charge collected by the
total net assets of all the Subaccounts in the Separate Account. See
"Contract Charges and Expenses" for more information regarding the
various costs and expenses."

The first sentence of the third paragraph under the section entitled "THE
SEPARATE ACCOUNT," appearing on page 13 of the Prospectus, is revised to read as
follows:

"Thirty-seven Subaccounts of the Separate Account are currently available."

The first paragraph under the section entitled "THE FUNDS," appearing on page 13
of the Prospectus, is revised to read in its entirety as follows:

"The Separate Account invests in shares of the following registered,
open-end management investment companies:

- Kemper Variable Series

- Janus Aspen Series
<PAGE> 9

- Lexington Natural Resources Trust

- Lexington Emerging Markets Fund, Inc.

- Fidelity Variable Insurance Products Fund

- Fidelity Variable Insurance Products Fund II

- Scudder Variable Life Investment Fund

- The Dreyfus Socially Responsible Growth Fund, Inc.

- J.P. Morgan Series Trust II

- The Alger American Fund

- American Century Variable Portfolios, Inc.

- Warburg Pincus Trust"

The first sentence of the second full paragraph appearing on page 14 of the
Prospectus is revised to read in its entirety as follows:

"The thirty-seven Portfolios are summarized below:"

The following is added between "Kemper Money Market Portfolio" and "Kemper Total
Return Portfolio" under the sub-section entitled "KEMPER VARIABLE SERIES,"
appearing on page 14 of the Prospectus:

"Kemper Technology Growth Portfolio seeks growth of capital."

The following is added between "Alger American Growth Portfolio" and "Alger
American Small Capitalization Portfolio" under the sub-section entitled "THE
ALGER AMERICAN FUND," appearing on page 15 of the Prospectus:

"Alger American MidCap Growth Portfolio seeks long-term capital
appreciation."

The following sub-section is added after the sub-section entitled "AMERICAN
CENTURY VARIABLE PORTFOLIOS, INC.," appearing on page 15 of the Prospectus:

"WARBURG PINCUS TRUST

Warburg Pincus Trust-Emerging Markets Portfolio seeks long-term growth of
capital by investing in equity securities of emerging markets."

The following is added between the ninth and tenth full paragraphs appearing on
page 16 of the Prospectus:

"Credit Suisse Asset Management, LLC is the investment adviser for the
Warburg Pincus Trust-Emerging Markets Portfolio."

<PAGE> 10

SUPPLEMENT DATED OCTOBER 16, 2000
TO STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 2000

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

PERIODIC PAYMENT
VARIABLE ANNUITY CONTRACTS

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

KEMPER ADVANTAGE III
ISSUED BY
KEMPER INVESTORS LIFE INSURANCE COMPANY
IN CONNECTION WITH
KILICO VARIABLE ANNUITY SEPARATE ACCOUNT

The Statement of Additional Information is modified effective October 16, 2000
as follows:

The section entitled "PERFORMANCE FIGURES (AS OF DECEMBER 31, 1999)" appearing
on pages B-4 through B-8 of the Statement of Additional Information, is revised
to read as follows:

"PERFORMANCE FIGURES
(AS OF DECEMBER 31, 1999)

The performance data quoted for the Subaccounts is based on past performance and
is not representative of future results. Investment return and principal value
will fluctuate so that units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 11
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
STANDARDIZED
AVERAGE
ANNUAL
NONSTANDARDIZED TOTAL
TOTAL RETURN(1) RETURN(2)
YEAR TO DATE ----------------------- ------------
(%) ENDING CUMULATIVE ANNUALIZED ANNUALIZED
RETURN(3) VALUE(4) (%) RETURN (%) RETURN (%) RETURN
------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
JANUS ASPEN GROWTH SUBACCOUNT........ 42.14%
Life of Subaccount (from
09/15/95)....................... $27,865 178.65% 26.90% 26.12%
Life of Portfolio (from
09/13/93)....................... 36,247 262.47 22.69 N/A
Five Years......................... 34,654 246.54 28.22 N/A
Three Years........................ 23,604 130.64 32.12 30.71
One Year........................... 14,214 42.14 42.14 34.87
FIDELITY VIP EQUITY-INCOME
SUBACCOUNT......................... 4.97
Life of Subaccount (from
05/01/96)....................... 15,647 56.47 12.98 11.84
Life of Portfolio (from
10/09/86)....................... 46,526 365.26 12.32 N/A
Ten Years.......................... 34,004 240.04 13.01 N/A
Five Years......................... 22,007 120.07 17.09 N/A
Three Years........................ 14,627 46.27 13.52 12.12
One Year........................... 10,497 4.97 4.97 -0.72
FIDELITY VIP GROWTH SUBACCOUNT....... 35.67
Life of Subaccount (from
05/01/96)....................... 23,584 135.84 26.35 25.27
Life of Portfolio (from
10/09/86)....................... 82,056 720.56 17.24 N/A
Ten Years.......................... 54,127 441.27 18.39 N/A
Five Years......................... 34,457 244.57 28.07 N/A
Three Years........................ 22,773 127.73 31.56 30.14
One Year........................... 13,567 35.67 35.67 28.40
FIDELITY VIP II INDEX 500
SUBACCOUNT......................... 18.96
Life of Subaccount (from
05/01/96)....................... 22,457 124.57 24.67 23.55
Life of Portfolio (from
08/27/92)....................... 37,072 270.72 19.52 N/A
Five Years......................... 32,416 224.16 26.49 N/A
Three Years........................ 19,742 97.42 25.45 23.91
One Year........................... 11,896 18.96 18.96 12.52
KEMPER MONEY MARKET SUBACCOUNT
#1(7).............................. 3.48
Life of Subaccount (from
04/06/82)....................... 24,551 145.51 5.20 5.19
Life of Portfolio (from
04/06/82)....................... 24,551 145.51 5.20 5.19
Ten Years.......................... 14,345 43.45 3.67 3.66
Five Years......................... 12,078 20.78 3.85 3.45
Three Years........................ 11,165 11.65 3.74 2.46
One Year........................... 10,350 3.48 3.48 -2.11
KEMPER HIGH YIELD SUBACCOUNT(6)...... 0.82
Life of Subaccount (from
04/06/82)....................... 61,121 511.21 10.75 10.75
Life of Portfolio (from
04/06/82)....................... 61,121 511.21 10.75 10.75
Ten Years.......................... 24,134 141.34 9.21 9.20
Five Years......................... 14,519 45.19 7.74 7.34
Three Years........................ 11,127 11.27 3.62 2.35
One Year........................... 10,084 .082 0.82 -4.62
</TABLE>

The performance data quoted for the Subaccounts is based on past performance and
is not representative
of future results. Investment return and principal value will fluctuate so that
units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 12
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
STANDARDIZED
AVERAGE
ANNUAL
NONSTANDARDIZED TOTAL
TOTAL RETURN(1) RETURN(2)
YEAR TO DATE ----------------------- ------------
(%) ENDING CUMULATIVE ANNUALIZED ANNUALIZED
RETURN(3) VALUE(4) (%) RETURN (%) RETURN (%) RETURN
------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
KEMPER GOVERNMENT SECURITIES
SUBACCOUNT......................... -0.63%
Life of Subaccount (from
11/03/89)....................... $17,685 76.85% 5.77% 5.76%
Life of Portfolio (from
09/03/87)....................... 20,135 101.35 5.84 N/A
Ten Years.......................... 17,471 74.71 5.73 5.72
Five Years......................... 13,431 34.31 6.08 5.68
Three Years........................ 11,295 12.95 4.14 2.86
One Year........................... 9,939 -0.63 -0.63 -6.00
KEMPER INVESTMENT GRADE BOND
SUBACCOUNT......................... -3.34
Life of Subaccount (from
05/01/96)....................... 11,386 13.86 3.60 2.55
Life of Portfolio (from
05/01/96)....................... 11,386 13.86 3.60 2.55
Three Years........................ 11,088 10.88 3.50 2.23
One Year........................... 9,668 -3.34 -3.34 -8.56
SCUDDER VLIF BOND SUBACCOUNT......... -2.22
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
07/16/85)....................... 24,326 143.26 6.34 N/A
Ten Years.......................... 17,902 79.02 6.00 N/A
Five Years......................... 13,120 31.20 5.58 N/A
Three Years........................ 11,080 10.80 3.48 N/A
One Year........................... 9,778 -2.22 -2.22 N/A
KEMPER GROWTH SUBACCOUNT............. 35.34
Life of Subaccount (from
12/09/83)....................... 94,008 839.76 14.97 14.97
Life of Portfolio (from
12/09/83)....................... 94,008 839.76 14.97 14.97
Ten Years.......................... 49,759 397.59 17.41 17.40
Five Years......................... 29,036 190.36 23.76 23.30
Three Years........................ 18,424 84.24 22.59 21.09
One Year........................... 13,536 35.34 35.34 28.09
FIDELITY VIP II CONTRAFUND
SUBACCOUNT......................... 22.66
Life of Subaccount (from
05/01/96)....................... 21,512 115.12 29.99 22.06
Life of Portfolio (from
01/03/95)....................... 31,838 218.38 31.33 N/A
Three Years........................ 19,288 92.88 24.48 22.95
One Year........................... 12,266 22.66 22.66 16.02
LEXINGTON NATURAL RESOURCES
SUBACCOUNT......................... 12.63
Life of Subaccount (from
09/15/95)....................... 11,882 18.82 4.09 3.41
Life of Portfolio (10/14/91)....... 14,526 45.26 4.65 N/A
Five Years......................... 13,654 36.54 6.43 N/A
Three Years........................ 9,452 -5.48 -1.86 -3.07
One Year........................... 11,263 12.63 12.63 6.53
</TABLE>

The performance data quoted for the Subaccounts is based on past performance and
is not representative
of future results. Investment return and principal value will fluctuate so that
units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 13
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
STANDARDIZED
AVERAGE
ANNUAL
NONSTANDARDIZED TOTAL
TOTAL RETURN(1) RETURN(2)
YEAR TO DATE ----------------------- ------------
(%) ENDING CUMULATIVE ANNUALIZED ANNUALIZED
RETURN(3) VALUE(4) (%) RETURN (%) RETURN (%) RETURN
------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
DREYFUS SOCIALLY RESPONSIBLE GROWTH
SUBACCOUNT......................... 28.42%
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
10/07/93)....................... $35,482 254.82% 22.52% N/A
Five Years......................... 33,086 230.86 27.04 N/A
Three Years........................ 20,084 108.04 27.66 N/A
One Year........................... 12,842 28.42 28.42 N/A
SCUDDER VLIF CAPITAL GROWTH
SUBACCOUNT......................... 33.50
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
07/16/85)....................... 86,398 763.98 16.70 N/A
Ten Years.......................... 46,109 361.09 16.51 N/A
Five Years......................... 32,776 227.76 26.80 N/A
Three Years........................ 21,764 117.64 29.59 N/A
One Year........................... 13,350 33.50 33.50 N/A
ALGER AMERICAN GROWTH SUBACCOUNT..... 32.03
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
01/06/89)....................... 84,605 746.05 21.45 N/A
Ten Years.......................... 69,046 590.46 21.31 N/A
Five Years......................... 36,085 260.85 29.26 N/A
Three Years........................ 23,957 139.57 33.81 N/A
One Year........................... 13,203 32.03 32.03 N/A
ALGER AMERICAN MIDCAP GROWTH
SUBACCOUNT......................... 30.16
Life of Portfolio (from
05/03/93)....................... 40,006 300.06 23.12 N/A
Five Years......................... 29,938 199.38 24.52 N/A
Three Years........................ 19,007 90.07 23.87 N/A
One Year........................... 13,015 30.16 30.16 N/A
AMERICAN CENTURY VP INCOME & GROWTH
SUBACCOUNT......................... 16.51
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
10/30/97)....................... 15,695 56.95 23.09 N/A
One Year........................... 11,651 16.51 16.51 N/A
AMERICAN CENTURY VP VALUE
SUBACCOUNT......................... -2.12
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
05/01/96)....................... 14,031 40.31 9.67 N/A
Three Years........................ 12,605 26.05 8.02 N/A
One Year........................... 9,788 -2.12 -2.12 N/A
</TABLE>

The performance data quoted for the Subaccounts is based on past performance and
is not representative
of future results. Investment return and principal value will fluctuate so that
units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 14
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
STANDARDIZED
AVERAGE
ANNUAL
NONSTANDARDIZED TOTAL
TOTAL RETURN(1) RETURN(2)
YEAR TO DATE ----------------------- ------------
(%) ENDING CUMULATIVE ANNUALIZED ANNUALIZED
RETURN(3) VALUE(4) (%) RETURN (%) RETURN (%) RETURN
------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
KEMPER SMALL CAP GROWTH SUBACCOUNT... 32.82%
Life of Subaccount (from
05/01/94)....................... $34,396 243.96% 24.35% 23.95%
Life of Portfolio (from
05/01/94)....................... 34,396 243.96 24.35 23.95
Five Years......................... 33,375 233.75 27.26 26.79
Three Years........................ 20,565 105.65 27.17 25.64
One Year........................... 13,284 32.82 32.82 25.65
KEMPER SMALL CAP VALUE SUBACCOUNT.... 1.46
Life of Subaccount (from
05/01/96)....................... 10,789 7.89 2.09 1.06
Life of Portfolio (from
05/01/96)....................... 10,789 7.89 2.09 1.06
Three Years........................ 10,684 6.84 2.23 0.97
One Year........................... 10,148 1.46 1.46 -4.02
JANUS ASPEN AGGRESSIVE GROWTH
SUBACCOUNT......................... 122.52
Life of Subaccount (from
09/15/95)....................... 36,904 269.04 35.47 34.84
Life of Portfolio (from
09/13/93)....................... 59,403 494.03 32.69 N/A
Five Years......................... 43,985 339.85 34.48 N/A
Three Years........................ 32,799 227.99 48.58 47.47
One Year........................... 22,252 122.52 122.52 115.25
J.P. MORGAN SMALL COMPANY
SUBACCOUNT......................... 42.54
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
12/31/94)....................... 24,027 140.27 19.15 N/A
Five Years......................... 24,027 140.27 33.94 N/A
Three Years........................ 16,013 60.13 16.99 N/A
One Year........................... 14,254 42.54 42.54 N/A
ALGER AMERICAN SMALL CAPITALIZATION
SUBACCOUNT......................... 44.73
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
09/21/88)....................... 73,215 632.15 19.29 N/A
Ten Years.......................... 46,823 368.23 16.69 N/A
Five Years......................... 26,004 160.04 21.06 N/A
Three Years........................ 17,755 77.55 21.09 N/A
One Year........................... 14,473 44.73 44.73 N/A
KEMPER INTERNATIONAL SUBACCOUNT(5)... 43.82
Life of Subaccount (from
01/06/92)....................... 26,451 164.51 12.95 12.94
Life of Portfolio (from
01/06/92)....................... 26,451 164.51 12.95 12.94
Five Years......................... 21,622 116.22 16.66 16.22
Three Years........................ 16,882 68.82 19.07 17.61
One Year........................... 14,384 43.82 43.82 36.57
</TABLE>

The performance data quoted for the Subaccounts is based on past performance and
is not representative
of future results. Investment return and principal value will fluctuate so that
units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 15
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
STANDARDIZED
AVERAGE
ANNUAL
NONSTANDARDIZED TOTAL
TOTAL RETURN(1) RETURN(2)
YEAR TO DATE ----------------------- ------------
(%) ENDING CUMULATIVE ANNUALIZED ANNUALIZED
RETURN(3) VALUE(4) (%) RETURN (%) RETURN (%) RETURN
------------ -------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
JANUS ASPEN WORLDWIDE GROWTH
SUBACCOUNT(5)...................... 62.34%
Life of Subaccount (from
09/15/95)....................... $33,100 231.00% 32.08% 31.40%
Life of Portfolio (from
09/13/93)....................... 47,451 374.51 28.05 N/A
Five Years......................... 39,900 299.00 31.89 N/A
Three Years........................ 24,914 149.14 35.56 34.23
One Year........................... 16,234 62.34 62.34 55.07
LEXINGTON EMERGING MARKETS
SUBACCOUNT(5)...................... 163.18
Life of Subaccount (from
09/15/95)....................... 16,499 65.00 12.35 11.62
Life of Portfolio (from
03/30/94)....................... 15,997 59.97 8.50 N/A
Five Years......................... 16,383 63.83 10.38 N/A
Three Years........................ 16,286 62.86 17.65 16.21
One Year........................... 26,318 163.18 163.18 155.91
SCUDDER VLIF INTERNATIONAL
SUBACCOUNT(5)...................... 52.53
Life of Subaccount (from
05/01/99)....................... N/A N/A N/A N/A
Life of Portfolio (from
05/01/87)....................... 42,369 323.69 12.06 N/A
Ten Years.......................... 30,501 205.01 11.80 N/A
Five Years......................... 23,873 138.73 19.01 N/A
Three Years........................ 19,209 92.09 24.31 N/A
One Year........................... 15,253 52.53 52.53 N/A
KEMPER TOTAL RETURN SUBACCOUNT(6).... 13.32
Life of Subaccount (from
04/06/82)....................... 79,931 699.31 12.44 12.44
Life of Portfolio (from
04/06/82)....................... 79,931 699.31 12.44 12.44
Ten Years.......................... 30,640 206.40 11.85 11.84
Five Years......................... 21,865 118.65 16.94 16.50
Three Years........................ 15,256 52.56 15.12 13.70
One Year........................... 11,334 13.34 13.32 7.20
KEMPER HORIZON 10+ SUBACCOUNT........ 6.97
Life of Subaccount (from
05/01/96)....................... 14,966 49.66 11.62 10.49
Life of Portfolio (from
05/01/96)....................... 14,966 49.66 11.62 10.49
Three Years........................ 13,555 35.55 10.67 9.31
One Year........................... 10,699 6.97 6.97 1.20
KEMPER HORIZON 5 SUBACCOUNT.......... 3.49
Life of Subaccount (from
05/01/96)....................... 13,556 35.56 8.65 7.55
Life of Portfolio (from
05/01/96)....................... 13,556 35.56 8.65 7.55
Three Years........................ 12,477 24.77 7.66 6.33
One Year........................... 10,351 3.49 3.49 -2.10
</TABLE>

The performance data quoted for the Subaccounts is based on past performance and
is not representative of future results. Investment return and principal value
will fluctuate so that units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.
<PAGE> 16
PERFORMANCE FIGURES -- (CONTINUED)
(AS OF DECEMBER 31, 1999)

The performance data quoted for the Subaccounts is based on past performance and
is not representative
of future results. Investment return and principal value will fluctuate so that
units, when redeemed, may be
worth more or less than their original cost. See page B-9 for additional
information.

<PAGE> 17

The following is added immediately prior to the section entitled "TAX-DEFERRED
ACCUMULATION," appearing on page B-13 of the Statement of Additional
Information:

KEMPER TECHNOLOGY GROWTH SUBACCOUNT

<TABLE>
<CAPTION>
QUALIFIED
AND NON-
YEAR ENDED QUALIFIED
12/31 TOTAL VALUE
---------- -----------
<S> <C>
1999...................... $17,619
</TABLE>

ALGER AMERICAN MIDCAP GROWTH SUBACCOUNT

<TABLE>
<CAPTION>
QUALIFIED
AND NON-
YEAR ENDED QUALIFIED
12/31 TOTAL VALUE
---------- -----------
<S> <C>
N/A....................... N/A
</TABLE>

WARBURG PINCUS TRUST-EMERGING MARKETS SUBACCOUNT

<TABLE>
<CAPTION>
QUALIFIED
AND NON-
YEAR ENDED QUALIFIED
12/31 TOTAL VALUE
---------- -----------
<S> <C>
1998...................... $ 6,844
1999...................... 12,243
</TABLE>

<PAGE> 18

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) FINANCIAL STATEMENTS:

(1) Financial Statements included in Part A of the Registration Statement:
Condensed Financial Information

(2) Financial Statements included in Part B of the Registration Statement:

(i) KILICO Variable Annuity Separate Account

Report of Independent Accountants

Statements of Assets and Liabilities and Contract Owners' Equity as
of December 31, 1999

Statements of Operations for the Year Ended December 31, 1999

Statements of Changes in Contract Owners' Equity for the Years
Ended December 31, 1999 and 1998

Notes to Financial Statements

(ii) Kemper Investors Life Insurance Company

Report of Independent Accountants

Kemper Investors Life Insurance Company and Subsidiaries
Consolidated Balance Sheets as of December 31, 1999 and 1998

Kemper Investors Life Insurance Company and Subsidiaries
Consolidated Statements of Operations, years ended December 31, 1999,
1998 and 1997

Kemper Investors Life Insurance Company and Subsidiaries
Consolidated Statements of Comprehensive Income, years ended December
31, 1999, 1998 and 1997

Kemper Investors Life Insurance Company and Subsidiaries
Consolidated Statements of Stockholder's Equity, years ended December
31, 1999, 1998 and 1997

Kemper Investors Life Insurance Company and Subsidiaries
Consolidated Statements of Cash Flows, years ended December 31, 1999,
1998 and 1997

Notes to Consolidated Financial Statements

(b) EXHIBITS:

<TABLE>
<C> <S>
(5)1.1 A copy of resolution of the Board of Directors of Kemper
Investors Life Insurance Company dated September 13, 1977.
(5)1.2 A copy of Record of Action of Kemper Investors Life
Insurance Company dated April 15, 1983.
2. Not Applicable.
(3)3.1 Distribution Agreement between Investors Brokerage Services,
Inc. and KILICO.
(1)3.2 Addendum to Selling Group Agreement of Kemper Financial
Services, Inc.
(6)3.3 Selling Group Agreement of Investors Brokerage Services,
Inc.
(6)3.4 General Agent Agreement.
(7)4. Form of Variable Annuity Contract.
(7)5. Form of application.
</TABLE>

C-1
<PAGE> 19

<TABLE>
<C> <S>
(3)6.1 Kemper Investors Life Insurance Company articles of
incorporation.
(6)6.2 Kemper Investors Life Insurance Company bylaws.
7. Inapplicable.
(2)8.1 Fund Participation Agreement among KILICO, Lexington Natural
Resources Trust and Lexington Management Corporation.
(2)8.2 Fund Participation Agreement among KILICO, Lexington
Emerging Markets Fund and Lexington Management Corporation.
(2)8.3 Fund Participation Agreement among KILICO, Janus Aspen
Series and Janus Capital Corporation.
(7)8.3(a) Service Agreement between KILICO and Janus Capital
Corporation.
(4)8.4(a) Fund Participation Agreement among KILICO, Fidelity Variable
Insurance Products Fund and Fidelity Distributors
Corporation.
(13)8.4(b) Amendment to Fund Participation Agreement among KILICO,
Fidelity Variable Insurance Products Fund and Fidelity
Distributors Corporation.
(4)8.5(a) Fund Participation Agreement among KILICO, Fidelity Variable
Insurance Products Fund II and Fidelity Distributors
Corporation.
(13)8.5(b) Amendment to Fund Participation Agreement among KILICO,
Fidelity Variable Insurance Products Fund II and Fidelity
Distributors Corporation.
(10)8.6(a) Participation Agreement between KILICO and Scudder Variable
Life Investment Fund.
(10)8.6(b) Participating Contract and Policy Agreement between KILICO
and Scudder Kemper Investments, Inc.
(10)8.6(c) Indemnification Agreement between KILICO and Scudder Kemper
Investments, Inc.
(15)8.7(a) Fund Participation Agreement between KILICO and The Dreyfus
Socially Responsible Growth Fund, Inc.
(16)8.7(b) Administrative Services Agreement by and between The Dreyfus
Corporation and KILICO (redacted).
(16)8.7(c) November 1, 1999 Amendment to Fund Participation Agreement
between KILICO and The Dreyfus Socially Responsible Growth
Fund, Inc.
(16)8.7(d) November 1, 1999 Amendment to Administrative Services
Agreement by and between The Dreyfus Corporation and KILICO
(redacted).
(20)8.8 Fund Participation Agreement between KILICO and J.P. Morgan
Series Trust II.
(16)8.9(a) Fund Participation Agreement by and among The Alger American
Fund, KILICO and Fred Alger & Company, Incorporated.
(16)8.9(b) Service Agreement between Fred Alger Management, Inc. and
KILICO (redacted).
(14)8.10 Fund Participation Agreement by and between KILICO and
American Century Investment Management, Inc.
(17)8.11 Fund Participation Agreement among KILICO, Kemper Investors
Fund (now known as Kemper Variable Series), Zurich Kemper
Investments, Inc. and Kemper Distributors, Inc.
(17)8.12 Participation Agreement By and Among KILICO and Warburg,
Pincus Trust and Credit Suisse Asset Management, LLC
(successor to Warburg Pincus Asset Management, Inc.) and
Credit Suisse Asset Management Securities, Inc. (f/k/a
Counsellors Securities Inc.).
</TABLE>

C-2
<PAGE> 20

<TABLE>
<C> <S>
(18)8.13 Service Agreement between Credit Suisse Asset Management,
LLC (successor to Warburg Pincus Asset Management, Inc.) and
Federal Kemper Life Assurance Company and KILICO.
(19)8.14 Restatement of Participation Agreement among Counsellors
Securities Inc., Warburg Pincus Asset Management, Inc.
and/or the Warburg Pincus Funds and KILICO.
(7)9. Opinion and Consent of Counsel.
(20)10. Consents of PricewaterhouseCoopers LLP, Independent
Accountants.
11. Inapplicable.
12. Inapplicable.
(8)13. Schedules for Computation of Performance Information.
(20)14. Organizational Chart.
(11)17.1 Schedule III: Supplementary Insurance Information (years
ended December 31, 1999 and 1998).
(11)17.2 Schedule IV: Reinsurance (year ended December 31, 1999).
(12)17.3 Schedule IV: Reinsurance (year ended December 31, 1998).
(9)17.4 Schedule IV: Reinsurance (year ended December 31, 1997).
(11)17.5 Schedule V: Valuation and qualifying accounts (year ended
December 31, 1999).
(12)17.6 Schedule V: Valuation and qualifying accounts (year ended
December 31, 1998).
(9)17.7 Schedule V: Valuation and qualifying accounts (year ended
December 31, 1997).
</TABLE>

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

(1) Incorporated by reference to Post-Effective Amendment No. 22 to the
Registration Statement on Form N-4 filed on or about April 27, 1995.

(2) Incorporated by reference to Post-Effective Amendment No. 23 to the
Registration Statement on Form N-4 filed on or about September 14, 1995.

(3) Incorporated by reference to Exhibits filed with the Registration Statement
on Form S-1 for KILICO (File No. 333-02491) filed on or about April 12,
1996.

(4) Incorporated by reference to Post-Effective Amendment No. 24 to the
Registration Statement on Form N-4 filed on or about April 26, 1996.

(5) Incorporated by reference to the Registration Statement on Form N-4 (File
No. 333-22375) filed on or about February 26, 1997.

(6) Incorporated by reference to Amendment No. 2 to the Registration Statement
on Form S-1 (File No. 333-02491) filed on or about April 23, 1997.

(7) Incorporated by reference to Amendment No. 25 to the Registration Statement
on Form N-4 (File No. 2-72671) filed on or about April 28, 1997.

(8) Incorporated by reference to Amendment No. 26 to the Registration Statement
on Form N-4 (File No. 2-72671) filed on or about November 3, 1997.

(9) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-4 for KILICO Variable Annuity Separate
Account (File No. 33-43501) filed on or about April 16, 1998.

(10) Incorporated by reference to Amendment No. 5 to the Registration Statement
on Form S-1 (File No. 333-22389) filed on or about April 20, 1999.

(11) Incorporated by reference to Form 10-K for Kemper Investors Life Insurance
Company for fiscal year ended December 31, 1999 filed on or about March 29,
2000.

(12) Incorporated by reference to Amendment No. 4 to the Registration Statement
on Form S-1 (File No. 333-02491) filed on or about April 20, 1999.

C-3
<PAGE> 21

(13) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form S-6 (File No. 33-65399) filed on or about
April 23, 1999.

(14) Incorporated by reference to the Registration Statement on Form S-1 (File
No. 333-32840) filed on or about March 20, 2000.

(15) Incorporated by reference to Post-Effective Amendment No. 28 to the
Registration Statement on Form N-4 (File No. 2-72671) filed on or about
April 28, 1999.

(16) Incorporated by reference to Amendment No. 6 to the Registration Statement
on Form S-1 (File No. 333-22389) filed on or about April 17, 2000.

(17) Incorporated by reference to Amendment No. 3 to the Registration Statement
of KILICO on Form S-1 (File No. 333-22389) filed on or about April 8, 1998.

(18) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement of FKLA Variable Separate Account on Form S-6 (File
No. 33-79808) filed on or about April 30, 1997.

(19) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-4 (File No. 333-22375) filed on or about
September 14, 1999.

(20) Incorporated by reference to Post-Effective Amendment No. 29 to the
Registration Statement on Form N-4 (File No. 2-72671) filed on or about
April 26, 2000.

ITEM 25. DIRECTORS AND OFFICERS OF KEMPER INVESTORS LIFE INSURANCE COMPANY

The directors and principal officers of KILICO are listed below together
with their current positions. The address of each officer and director is 1
Kemper Drive, Long Grove, Illinois 60049.

<TABLE>
<CAPTION>
NAME OFFICE WITH KILICO
---- ------------------
<S> <C>
Gale K. Caruso............................... President, Chief Executive Officer and
Director
Frederick L. Blackmon........................ Executive Vice President and Chief Financial
Officer
Edward L. Robbins............................ Executive Vice President and Chief Actuary
James E. Hohmann............................. Executive Vice President and Director
William H. Bolinder.......................... Chairman of the Board and Director
David A. Bowers.............................. Director
Gunther Gose................................. Director
Eliane C. Frye............................... Executive Vice President and Director
Debra P. Rezabek............................. Executive Vice President, General Counsel,
and Corporate Secretary
James C. Harkensee........................... Executive Vice President
Edward K. Loughridge......................... Executive Vice President and Corporate
Development Officer
Kenneth M. Sapp.............................. Executive Vice President
George Vlaisavljevich........................ Executive Vice President
Russell M. Bostick........................... Executive Vice President and Chief
Information Officer
Ivor K. H. Tham.............................. Executive Vice President
</TABLE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE INSURANCE
COMPANY OR REGISTRANT

See Exhibit 14 for organizational charts of persons controlled or under
common control with Kemper Investors Life Insurance Company.

Investors Brokerage Services, Inc. and Investors Brokerage Services
Insurance Agency, Inc. are wholly owned subsidiaries of KILICO.

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<PAGE> 22

ITEM 27. NUMBER OF CONTRACT OWNERS

At October 1, 2000, the Registrant had approximately 129,736 qualified and
non-qualified Advantage III Contract Owners.

ITEM 28. INDEMNIFICATION

To the extent permitted by law of the State of Illinois and subject to all
applicable requirements thereof, Article VI of the By-Laws of Kemper Investors
Life Insurance Company ("KILICO") provides for the indemnification of any person
against all expenses (including attorneys fees), judgments, fines, amounts paid
in settlement and other costs actually and reasonably incurred by him in
connection with any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in which he is a party
or is threatened to be made a party by reason of his being or having been a
director, officer, employee or agent of KILICO, or serving or having served, at
the request of KILICO, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of his holding a fiduciary position in connection with the management or
administration of retirement, pension, profit sharing or other benefit plans
including, but not limited to, any fiduciary liability under the Employee
Retirement Income Security Act of 1974 and any amendment thereof, if he acted in
good faith and in a manner he reasonably believed to be in and not opposed to
the best interests of KILICO, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that he did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
KILICO, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful. No indemnification shall be made
in respect of any claim, issue or matter as to which a director or officer shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the company, unless and only to the extent that the court in
which such action or suit was brought or other court of competent jurisdiction
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, he is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.

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

ITEM 29.(a) PRINCIPAL UNDERWRITER

Investors Brokerage Services, Inc., a wholly owned subsidiary of Kemper
Investors Life Insurance Company, acts as principal underwriter for KILICO
Variable Annuity Separate Account, KILICO Variable Separate Account, Kemper
Investors Life Insurance Company Variable Annuity Account C and FKLA Variable
Separate Account.

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<PAGE> 23

ITEM 29.(b) INFORMATION REGARDING PRINCIPAL UNDERWRITER, INVESTORS BROKERAGE
SERVICES, INC.

The address of each officer is 1 Kemper Drive, Long Grove, IL 60049.

<TABLE>
<CAPTION>
POSITION AND OFFICES
NAME WITH UNDERWRITER
---- --------------------
<S> <C>
Gale K. Caruso.......................................... Chairman and Director
Michael E. Scherrman.................................... President and Director
Debra P. Rezabek........................................ Secretary
Kenneth M. Sapp......................................... Director
Eliane C. Frye.......................................... Director
Thomas K. Walsh......................................... Assistant Vice President
David S. Jorgensen...................................... Vice President and Treasurer
Frank J. Julian......................................... Assistant Secretary
George Vlaisavljevich................................... Director
Allen R. Reed........................................... Assistant Secretary
</TABLE>

ITEM 29.(c)

Inapplicable.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

Accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder
are maintained by Kemper Investors Life Insurance Company at its home office at
1 Kemper Drive, Long Grove, Illinois 60049 and at 222 South Riverside Plaza,
Chicago, Illinois 60606-5808.

ITEM 31. MANAGEMENT SERVICES

Inapplicable.

ITEM 32. UNDERTAKINGS AND REPRESENTATIONS

Representation Regarding Fees and Charges Pursuant to Section 26 of the
Investment Company Act of 1940

Kemper Investors Life Insurance Company ("KILICO") represents that the fees
and charges deducted under the Contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by KILICO.

Representation Regarding Contracts Issued to Participants of Tax-Sheltered
Annuity Programs

KILICO, depositor and sponsor of the registrant KILICO Variable Annuity
Separate Account (the "Separate Account"), and Investors Brokerage Services,
Inc. ("IBS"), the principal underwriter of the periodic payment variable annuity
contracts (the "Contracts") issued by the registrant, will issue the Contracts
to participants in IRC 403(b) Tax-Sheltered Annuity Programs in reliance upon,
and in compliance with, the no-action letter dated November 28, 1988 to American
Counsel of Life Insurance. In connection therewith, KILICO, the Separate Account
and IBS represent that they will:

1. Include appropriate disclosure regarding the restrictions on redemptions
imposed by IRC Section 403(b)(11) in each registration statement,
including the prospectus, used in connection with the Program;

2. Include appropriate disclosure regarding the restrictions on redemption
imposed by IRC Section 403(b)(11) in any sales literature used in
connection with the offer of annuity contracts to 403(b) participants;

C-6
<PAGE> 24

3. Instruct salespeople who solicit participants to purchase annuity
contracts specifically to bring the restrictions on redemption imposed
by IRC Section 403(b)11 to the attention of potential participants; and

4. Obtain from each participant who purchases an IRC Section 403(b) annuity
contract, prior to or at the time of such purchase, a signed statement
acknowledging the restrictions on redemption imposed by IRC Section
403(b) and the investment alternatives available under the employer's
IRC Section 403(b) arrangement, to which the participant may elect to
transfer his or her contract value.

Representation Regarding Contracts Issued to Participants in the Texas
Optional Retirement Program.

KILICO, depositor and sponsor of the registrant KILICO Variable Annuity
Separate Account, and Investors Brokerage Services, Inc., the principal
underwriter of the periodic payment variable annuity contracts (the "Contracts")
issued by the registrant, will issue the Contracts to participants in the Texas
Optional Retirement Program ("Program") in reliance upon, and in compliance
with, Rule 6c-7 of the Investment Company Act of 1940, and represent that they
will:

1. Include appropriate disclosure regarding the restrictions on redemptions
imposed by the Program in each registration statement, including the
prospectus, used in connection with the Program;

2. Include appropriate disclosure regarding the restrictions on redemption
imposed by the Program in any sales literature used in connection with
the offer of annuity contracts to Program participants;

3. Instruct salespeople who solicit Program participants to purchase
annuity contracts specifically to bring the restrictions on redemption
imposed by the Program to the attention of potential Program
participants; and

4. Obtain from each Program participant who purchases an annuity contract
in connection with the Program, prior to or at the time of such
purchase, a signed statement acknowledging the restrictions on
redemption imposed by the Program.

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<PAGE> 25

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, KILICO Variable Annuity Separate Account, certifies that
it meets the requirements of Securities Act Rule 485 for effectiveness of this
Registration Statement and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Long Grove and State of Illinois on the 12th day of October, 2000.

KILICO VARIABLE ANNUITY SEPARATE ACCOUNT
(Registrant)
By: Kemper Investors Life Insurance
Company

By: /s/ GALE K. CARUSO
-------------------------------------
Gale K. Caruso, President and Chief
Executive Officer

KEMPER INVESTORS LIFE INSURANCE COMPANY
(Depositor)

By: /s/ GALE K. CARUSO
-------------------------------------
Gale K. Caruso, President and Chief
Executive Officer

As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following directors and principal officers of Kemper
Investors Life Insurance Company in the capacities indicated on the 12th day of
October, 2000.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>

/s/ GALE K. CARUSO President, Chief Executive Officer and Director
----------------------------------------------------- (Principal Executive Officer)
Gale K. Caruso

/s/ W. H. BOLINDER Chairman of the Board and Director
-----------------------------------------------------
William H. Bolinder

/s/ FREDERICK L. BLACKMON Executive Vice President and Chief Financial Officer
----------------------------------------------------- (Principal Financial Officer and Principal Accounting
Frederick L. Blackmon Officer)

/s/ DAVID A. BOWERS Director
-----------------------------------------------------
David A. Bowers

/s/ ELIANE C. FRYE Director
-----------------------------------------------------
Eliane C. Frye

/s/ GUNTHER GOSE Director
-----------------------------------------------------
Gunther Gose

/s/ JAMES E. HOHMANN Director
-----------------------------------------------------
James E. Hohmann
</TABLE>

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