PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT/NJ
485BPOS, 1999-04-27
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     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 27, 1999
                                                      REGISTRATION NO. 2-81318
================================================================================
    

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM N-4

   
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933        [ ]
                           PRE-EFFECTIVE AMENDMENT NO.                     [ ]
                         POST-EFFECTIVE AMENDMENT NO. 26                   [X]
                                       AND
        REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940    [ ]
                                AMENDMENT NO. 31                           [X]
    

                        (Check appropriate box or boxes)

                                   ----------

                       THE PRUDENTIAL QUALIFIED INDIVIDUAL
                            VARIABLE CONTRACT ACCOUNT
                           (Exact Name of Registrant)

                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                               (Name of Depositor)

                                751 BROAD STREET
                          NEWARK, NEW JERSEY 07102-3777
                                 (888) PRU-2888
         (Address and telephone number of principal executive offices)

                                   ----------

                                THOMAS C. CASTANO
                               ASSISTANT SECRETARY
                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                751 BROAD STREET
                          NEWARK, NEW JERSEY 07102-3777
                     (Name and address of agent for service)

                                   COPIES TO:
  LEE D. AUGSBURGER                              CHRISTOPHER E. PALMER
  ASSISTANT GENERAL COUNSEL                      SHEA & GARDNER
  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA    1800 MASSACHUSETTS AVENUE, N.W.
  751 BROAD STREET                               WASHINGTON, D.C. 20036
  NEWARK, NEW JERSEY 07102-3777

                                   ----------

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

   
  [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 
  [X] on April 30, 1999 pursuant to paragraph (b) of Rule 485
          (date)
  [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
      on __________ pursuant to paragraph (a)(1) of Rule 485
           (date)
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: Interests in Individual Variable
   Annuity Contracts

================================================================================

<PAGE>
   
                                    VARIABLE
                                   INVESTMENT
                                      PLAN


THIS PROSPECTUS DESCRIBES A QUALIFIED INDIVIDUAL VARIABLE ANNUITY CONTRACT
OFFERED BY THE PRUDENTIAL INSURANCE COMPANY OF AMERICA.

The qualified Variable Investment Plan offers a wide variety of investment
choices, including a fixed interest-rate option and 13 variable investment
options that invest in the following portfolios managed by Prudential:


CONSERVATIVE BALANCED
    PORTFOLIO

DIVERSIFIED BOND PORTFOLIO

EQUITY INCOME PORTFOLIO 

EQUITY PORTFOLIO 

FLEXIBLE MANAGED PORTFOLIO 

GLOBAL PORTFOLIO 

GOVERNMENT INCOME PORTFOLIO 

HIGH YIELD BOND PORTFOLIO 

MONEY MARKET PORTFOLIO 

NATURAL RESOURCES PORTFOLIO 

PRUDENTIAL JENNISON PORTFOLIO 

SMALL CAPITALIZATION STOCK
    PORTFOLIO

STOCK INDEX PORTFOLIO

                                                                     MAY 1, 1999







Please read this prospectus before purchasing a qualified Variable Investment
Plan contract and keep it for future reference. A current prospectus for the
underlying mutual fund accompanies this prospectus. This prospectus contains
important information about the mutual fund. Please read this prospectus and
keep it for reference.

To learn more about the qualified Variable Investment Plan, you can request a
copy of the Statement of Additional Information (SAI) dated May 1, 1999. The SAI
has been filed with the Securities and Exchange Commission (SEC) and is legally
a part of this prospectus. The SEC maintains a Web site (http://www.sec.gov)
that contains the qualified Variable Investment Plan SAI, material incorporated
by reference, and other information regarding registrants that file
electronically with the SEC. The Table of Contents of the SAI is on Page 25 of
this prospectus. For a free copy of the SAI, call us at: (888) PRU-2888 or write
to us at:

The Prudential Insurance Company of America
751 Broad Street
Newark, New Jersey 07102-3777

Prudential Annuity Service Center
P.O. Box 14215
New Brunswick, New Jersey 08906


THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
OFFENSE TO STATE OTHERWISE.

INVESTMENT IN A VARIABLE ANNUITY IS SUBJECT TO RISK, INCLUDING THE POSSIBLE LOSS
OF YOUR MONEY. AN INVESTMENT IN THE QUALIFIED VARIABLE INVESTMENT PLAN IS NOT A
BANK DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.



                                                               [PRUDENTIAL LOGO]

    

<PAGE>

   
                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY


                                TABLE OF CONTENTS


CAPTION                                                              PAGE
- -------                                                              ----
GLOSSARY ............................................................ ii

SUMMARY .............................................................  1

SUMMARY OF CONTRACT EXPENSES ........................................  4

EXPENSE EXAMPLES ....................................................  6

1.    WHAT IS THE QUALIFIED VARIABLE INVESTMENT PLAN VARIABLE
      ANNUITY? ......................................................  8
      Death Benefit..................................................  8
      Beneficiary....................................................  8
      Short Term Cancellation Right or "Free Look" ..................  9
      Other Contracts................................................  9

2.    WHAT INVESTMENT OPTIONS
      CAN I CHOOSE?..................................................  9
      Variable Investment Options ...................................  9
      Fixed Interest-Rate Option..................................... 10
      Transfers Among Options ....................................... 10
      Dollar Cost Averaging ......................................... 10
      Voting Rights ................................................. 11
      Substitution................................................... 11
      Other Changes.................................................. 11

3.    WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE?
      (ANNUITIZATION) ............................................... 11
      Payment Provisions ............................................ 11
      Option 1: Life Annuity with 120 Payments
        (10 Years) Certain............................................12
      Option 2: Interest Payment Option ............................. 12
      Option 3: Other Annuity Options ............................... 12

4.    WHAT IS THE 1% BONUS?...........................................12

5.    HOW CAN I PURCHASE A VARIABLE INVESTMENT PLAN VARIABLE
      ANNUITY CONTRACT? ............................................. 12
      Purchase Payments ............................................. 12
      Allocation of Purchase Payments ............................... 12
      Calculating Contract Value .................................... 13


CAPTION                                                              PAGE
- -------                                                              ----
6.    WHAT ARE THE EXPENSES ASSOCIATED WITH THE QUALIFIED VARIABLE
      INVESTMENT PLAN VARIABLE ANNUITY CONTRACT? .................... 13
      Insurance Charges ............................................. 13
      Annual Contract Fee............................................ 13
      Withdrawal Charge ............................................. 14
      Bonus Recapture................................................ 14
      Critical Care Access .......................................... 14
      Premium Taxes ................................................. 15

7.    HOW CAN I ACCESS MY MONEY? .................................... 15
      Suspension of Payments or Transfers ........................... 15

8.    WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE VARIABLE
      INVESTMENT PLAN VARIABLE ANNUITY CONTRACT? .................... 15
      Annuity Qualification.......................................... 15
      Taxes on Prudential............................................ 16
      Retirement Arrangements Using the Contract..................... 16
      Plans for Self-Employed Individuals.............................16
      IRAs........................................................... 17
      Simplified Employee Pension Plans ("SEPs")..................... 17
      Disclosure and "Free Look"......................................17
      TDAs............................................................17
      Eligible Deferred Compensation Plans of States or
      Local Governments and Tax Exempt Organizations................. 18
      Qualified Pension and Profit Sharing Plans..................... 18
      Minimum Distribution Option.................................... 19
      Penalty for Early Withdrawal................................... 19
      Withholding.................................................... 19
      Interested Party Disclosure.................................... 19

9.    OTHER INFORMATION ............................................. 20
      The Prudential Insurance Company of America.................... 20
      The Separate Account .......................................... 20
      Sale of the Contract; Distributor ............................. 21
      Assignment .................................................... 21
      Exchange Offer for Certain Contractowners...................... 21
      Litigation..................................................... 22
      Year 2000 Compliance........................................... 23
      Financial Statements .......................................... 24
      Statement of Additional Information............................ 24
      Accumulation Unit Values ...................................... 25


                                        i

    

<PAGE>

   
                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY


                                    GLOSSARY

We have tried to make this prospectus as easy to read and understand as
possible. By the nature of the contract, however, certain technical words or
terms are unavoidable. We have identified the following as some of these words
or terms.

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

ACCUMULATION PHASE. The period that begins with the contract date (see below
definition) and ends when you start receiving income payments or earlier if the
contract is terminated through a full withdrawal or payment of a death benefit.

ANNUITANT. The person whose life determines how long the contract lasts and the
amount of income payments that will be paid.

ANNUITY DATE. The date when income payments are scheduled to begin.

BONUS. The additional 1% of your purchase payments that we add to the value of
your contract. This amount is based on the purchase payments you make during the
first three years you own the contract. Payment of the bonus amount may be
limited to $1,000 each contract year. This amount is referred to in your
contract as an "additional amount."

BENEFICIARY. The person(s) or entity you have chosen to receive a death benefit.

CASH VALUE. The total value of your contract amount minus any applicable charges
or fees. This amount is referred to in your contract as the "contract fund."

CONTRACT DATE. The date we receive your initial purchase payment and all
necessary paperwork in good order in the Prudential Annuity Service Center.
Contract anniversaries are measured from the contract date. A contract year
begins on the contract date or on a contract anniversary.

CONTRACTOWNER, OWNER, OR YOU. The person entitled to the ownership rights under
the contract.

CONTRACT VALUE. The total value of the amounts in a contract allocated to the
variable investment options and the fixed interest-rate option as of a
particular date.

DEATH BENEFIT. If the annuitant dies, the designated person(s), that is, the
beneficiary, will receive the total value of the contract or, depending on the
age of the annuitant, the total amount invested in the contract, reduced
proportionately by withdrawals, whichever is greater.

FIXED INTEREST-RATE OPTION. An investment option that offers a fixed rate of
interest for a one-year period.

INCOME OPTIONS. Options under the contract that define the frequency and
duration of income payments. In your contract, they are referred to as payout or
annuity options.

PURCHASE PAYMENTS. The amount of money you pay us to purchase the contract.
Generally, you may make additional purchase payments at any time during the
accumulation phase.

PRUDENTIAL ANNUITY SERVICE CENTER. P.O. Box 14215, New Brunswick, New Jersey,
08906. The phone number is 1-888-PRU-2888.

SEPARATE ACCOUNT. Purchase payments allocated to the variable investment options
are held by Prudential in a separate account called the Prudential Qualified
Individual Variable Contract Account. The separate account is set apart from all
of the general assets of Prudential.

TAX DEFERRAL. This is a way to generally increase your assets without currently
being taxed. You do not pay taxes on your contract earnings until you take money
out of your contract.

VARIABLE INVESTMENT OPTION. When you choose a variable investment option, we
purchase shares of the mutual fund portfolio associated with that option. We
hold these shares in the separate account. The division of the separate account
is referred to in your contract as a subaccount.

                                       ii
    

<PAGE>
   
                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

SUMMARY

FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN THE PROSPECTUS.

1.    WHAT IS THE QUALIFIED VARIABLE INVESTMENT PLAN VARIABLE ANNUITY?

      This variable annuity contract, offered by Prudential, is designed for use
in connection with various retirement arrangements. These retirement
arrangements receive favorable federal income tax benefits which are fully
explained in Section 8 entitled, "WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED
WITH THE QUALIFIED VARIABLE INVESTMENT PLAN. The contract is between your
employer (the owner) and us (the insurance company). Under certain circumstances
the contract is directly between you and the insurance company. The contract
provides a way of accumulating your savings by investing on a tax-deferred basis
in one or more of 13 variable investment options which are associated with
portfolios of the Prudential Series Fund, Inc., ("Series Fund"). There is also a
fixed interest-rate option. The contract is intended for retirement savings or
other long-term investment purposes and provides for a death benefit and
guaranteed income options.

      The variable investment options are designed to offer the opportunity for
a better return than the fixed interest-rate option. However, this is NOT
guaranteed. It is possible, due to market changes, that your investments may
decrease in value.

      The fixed interest-rate option offers an interest rate that is guaranteed
to be not less than 3% per year. While your money is in the fixed account, both
the interest amount that your money will earn and your principal amount is
guaranteed by us.

      You can invest your money in any or all of the variable investment options
and the fixed interest-rate option. You are always allowed at least four
transfers each contract year among the variable investment options. There are
certain restrictions on transfers involving the fixed interest-rate option.

      The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
grow on a tax-deferred basis and are taxed as income when you make a withdrawal.
The income phase starts when you choose to begin receiving regular payments from
your contract. The amount of money you are able to accumulate in your contract
during the accumulation phase will help determine the amount of payments you
will receive during the income phase. Other factors will affect the amount of
your payments such as, age and the payout option you selected.

      FREE LOOK. If you change your mind about owning the qualified Variable
Investment Plan contract, YOU MAY CANCEL YOUR CONTRACT WITHIN 10 DAYS AFTER
RECEIVING IT (or whatever time period is required in the state where the
contract was issued).

      OTHER CONTRACTS. This prospectus describes the qualified Variable
Investment Plan contract which is currently offered for sale. There are earlier
versions of the contract which are no longer being offered. These earlier
versions have certain different features that are referred to throughout this
prospectus. Owners of previously offered contracts can find further information
in the Statement of Additional Information.

2. WHAT INVESTMENT OPTIONS CAN I CHOOSE?

      You can invest your money in any or all of the variable investment options
that are described in the Series Fund prospectus located at the end of this
prospectus:

                           THE PRUDENTIAL SERIES FUND

      The Prudential Series Fund, Inc. is a mutual fund made up of the following
portfolios. You may choose one or more of these portfolios as your variable
investment options.

                         Conservative Balanced Portfolio
                           Diversified Bond Portfolio
                             Equity Income Portfolio
                                Equity Portfolio
                           Flexible Managed Portfolio
                                Global Portfolio
                           Government Income Portfolio
                            High Yield Bond Portfolio
    

                                       1
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

                             Money Market Portfolio
                           Natural Resources Portfolio
                          Prudential Jennison Portfolio
                      Small Capitalization Stock Portfolio
                              Stock Index Portfolio

      Depending upon market conditions, you may earn or lose money in any of
these options. The value of your contract will fluctuate depending upon the
investment performance of the Series Fund portfolios you have chosen as your
variable investment options. Performance information for the variable investment
options is provided in the Accumulation Unit Values chart on page 22 and in the
Statement of Additional Information. Past performance is not a guarantee of
future results.

      You may also put your money into the fixed interest-rate option.

3.    WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE?
      (ANNUITIZATION)

      If you want to receive regular income from your annuity, you can choose
one of several options, including guaranteed payments for the annuitant's
lifetime. Once you begin receiving regular payments, you may not be able to
change your payment plan.

4.    WHAT IS THE 1% BONUS?

      We will add to your account an additional 1% of your purchase payments
during the first three years of your contract. Payment of the bonus amount may
be limited to $1,000 each contract year. After three contract years the
additional 1% may be added at our discretion. Also, the 1% will be recaptured if
you make a withdrawal within eight contract years after the purchase payment is
made.

5.    HOW CAN I PURCHASE A QUALIFIED VARIABLE INVESTMENT PLAN ANNUITY CONTRACT?

      If you purchase this contract under a retirement plan, your purchase
payment would be made through payroll deduction or a similar arrangement with
your employer. You must make at least $300 in purchase payments during any 12
month period. If you purchase this contract outside of an employer sponsored
retirement plan, your purchase payments must be a minimum of $100.

6.    WHAT ARE THE EXPENSES ASSOCIATED WITH THE QUALIFIED VARIABLE INVESTMENT
      PLAN CONTRACT?

      The contract has insurance features and investment features, and there are
costs related to each. Each year we deduct a $30 contract maintenance charge if
your contract value is less than $10,000 on the contract anniversary. For
insurance and administrative costs, we also deduct an annual charge of 1.20% of
the average daily value of all assets allocated to the variable investment
options. This charge is not assessed against amounts allocated to the fixed
interest-rate option.

      There are a few states/jurisdictions that assess a premium tax when you
begin receiving regular income payments from your annuity. In those states, we
will assess the required premium tax charge which currently can range up to 5%.

      The mutual fund portfolios also have their own expenses that apply to your
investment. These annual expenses currently range from 0.37% to 0.86% of the
average daily value of the portfolio.

7.    HOW CAN I ACCESS MY MONEY?

      You may take money out at any time during the accumulation phase. Each
contract year you may withdraw your contract earnings plus up to 10% of your
contract value (calculated as of the date of the first withdrawal made in that
contract year), without charge. Withdrawals in excess of earnings plus 10% of
your purchase payments may be subject to a withdrawal charge. This charge
initially is 8% but decreases 1% each contract year from the date that each
purchase payment was made. After the eighth contract year, there is no charge
for a withdrawal of that purchase payment. You may, however, be subject to
income tax and a tax penalty if you make an early withdrawal.
    

                                       2
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

8.    WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE QUALIFIED VARIABLE
      INVESTMENT PLAN CONTRACT?

      Your earnings are generally not taxed until withdrawn. If you take money
out during the accumulation phase, earnings are withdrawn first and are taxed as
income. If you are younger than 59 1/2 when you take money out, you may be
charged a 10% federal tax penalty on the earnings in addition to ordinary
taxation. A portion of the payments you receive during the income phase may be
considered partly a return of your original investment. As a result, that
portion of each payment is not taxable as income. Generally, all amounts
withdrawn from IRA contracts are taxable and subject to the 10% penalty if
withdrawn prior to age 59 1/2.

9.    OTHER INFORMATION

      This contract is issued by The Prudential Insurance Company of America,
and sold by licensed representatives.
    

                                       3
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY


                          SUMMARY OF CONTRACT EXPENSES


           The purpose of this summary is to help you to understand the costs
you will pay for the qualified Variable Investment Plan variable annuity
contract. This summary includes the expenses of the mutual fund associated with
the variable investment options but does not include any charge for premium
taxes that might be applicable in your state. More detailed information can be
found on page 13 in the section called, "WHAT ARE THE EXPENSES ASSOCIATED WITH
THE QUALIFIED VARIABLE INVESTMENT PLAN VARIABLE ANNUITY?" For more detailed
expense information about the Series Fund, please refer to the prospectus
located at the back of this prospectus.

<TABLE>
<CAPTION>

      TRANSACTION EXPENSES                  CONTRACT YEARS AFTER PURCHASE PAYMENT
      ----------------------------------------------------------------------------------
          <S>                      <C>                        <C>
          WITHDRAWAL CHARGE:       Year 0 ................... 8% plus return of 1% bonus
          (SEE NOTE 1 BELOW)       Year 1 ................... 7% plus return of 1% bonus
                                   Year 2 ................... 6% plus return of 1% bonus
                                   Year 3 ................... 5% plus return of 1% bonus
                                   Year 4 ................... 4% plus return of 1% bonus
                                   Year 5 ................... 3% plus return of 1% bonus
                                   Year 6 ................... 2% plus return of 1% bonus
                                   Year 7.................... 1% plus return of 1% bonus
                                   After that ............... 0%

                                   Contract years 1-8 after
                                   purchase payment:
                                   Return of bonus...........1%

          ANNUAL CONTRACT FEE
          AND FULL WITHDRAWAL FEE: ............................. $30.00
          (SEE NOTE 2 BELOW)

      ANNUAL ACCOUNT EXPENSES
      ----------------------------------------------------------------------------------
      As a percentage of the average account value in the variable investment options.

          MORTALITY AND EXPENSE RISK: ............................ 1.20%
</TABLE>

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


Note 1: Withdrawal charges are imposed only on purchase payments. You may
        withdraw earnings without a charge. In addition, during any contract
        year you may withdraw up to 10% of the total contract value (calculated
        as of the date of the first withdrawal made in that contract year),
        without charge. There is no withdrawal charge on any withdrawals made
        under the CRITICAL CARE OPTION (see page 14).

Surrender charges are also waived when a death benefit is paid.

Note 2: This fee is only imposed if your contract value is less than $10,000 at
        the time this fee is calculated.
    

                                       4
<PAGE>
   
<TABLE>
<CAPTION>

                                              VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

                                                    SUMMARY OF CONTRACT EXPENSES

ANNUAL MUTUAL FUND EXPENSES

- ------------------------------------------------------------------------------------------------------------------------------------
      As a percentage of each fund's average daily net assets:

                                                             INVESTMENT                   OTHER                    TOTAL
                                                           MANAGEMENT FEE               EXPENSES                 EXPENSES
- -------------------------------------------------------------------------------------------------------------------------
        <S>                                                     <C>                     <C>                      <C>
        THE PRUDENTIAL SERIES FUND
              Conservative Balanced Portfolio                   0.55%                    0.02%                    0.57%
              Diversified Bond Portfolio                        0.40%                    0.02%                    0.42%
              Equity Income Portfolio                           0.40%                    0.02%                    0.42%
              Equity Portfolio                                  0.45%                    0.02%                    0.47%
              Flexible Managed Portfolio                        0.60%                    0.01%                    0.61%
              Global Portfolio                                  0.75%                    0.11%                    0.86%
              Government Income Portfolio                       0.40%                    0.03%                    0.43%
              High Yield Bond Portfolio                         0.55%                    0.03%                    0.58%
              Money Market Portfolio                            0.40%                    0.01%                    0.41%
              Natural Resources Portfolio                       0.45%                    0.04%                    0.49%
              Prudential Jennison Portfolio                     0.60%                    0.03%                    0.63%
              Small Capitalization Stock Portfolio              0.40%                    0.07%                    0.47%
              Stock Index Portfolio                             0.35%                    0.02%                    0.37%

- ------------------------------------------------------------------------------------------------------------------------------------
    
</TABLE>
                                                                 5
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

                                EXPENSE EXAMPLES

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

These examples will help you compare the fees and expenses of the different
variable investment options offered by the qualified Variable Investment Plan.
You can also use the examples to compare the cost of the qualified Variable
Investment Plan with other qualified variable annuity contracts.

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

EXAMPLE 1-IF YOU WITHDRAW YOUR ASSETS OR ANNUITIZE

Example 1 assumes that you invest $1,000 in the qualified Variable Investment
Plan and that you allocate all of your assets to one of the variable investment
options and withdraw all your assets or annuitize at the end of the time period
indicated. (Certain annuity options will not be subject to withdrawal charges.
See "WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE?" on page 11.)
The example also assumes that your investment has a 5% return each year and that
the mutual fund's operating expenses remain the same. Your actual costs may be
higher or lower, but based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
                                                              1 YEAR            3 YEARS           5 YEARS          10 YEARS
           ----------------------------------------------------------------------------------------------------------------
           <S>                                                 <C>               <C>               <C>               <C>
           THE PRUDENTIAL SERIES FUND
                 Conservative Balanced Portfolio               $ 91              $ 101             $ 121             $ 220
                 Diversified Bond Portfolio                    $ 90              $  96             $ 114             $ 204
                 Equity Income Portfolio                       $ 90              $  96             $ 114             $ 204
                 Equity Portfolio                              $ 90              $  98             $ 116             $ 209
                 Flexible Managed Portfolio                    $ 91              $ 102             $ 124             $ 224
                 Global Portfolio                              $ 94              $ 110             $ 136             $ 250
                 Government Income Portfolio                   $ 90              $  97             $ 114             $ 205
                 High Yield Bond Portfolio                     $ 91              $ 101             $ 122             $ 221
                 Money Market Portfolio                        $ 89              $  96             $ 113             $ 203
                 Natural Resources Portfolio                   $ 90              $  98             $ 117             $ 211
                 Prudential Jennison Portfolio                 $ 92              $ 103             $ 125             $ 226
                 Small Capitalization Stock Portfolio          $ 90              $  98             $ 116             $ 209
                 Stock Index Portfolio                         $ 89              $  95             $ 111             $ 198

- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:


THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The charges shown in the 10 year column are the same for Example 1 and Example
2. This is because after 8 years we no longer deduct the withdrawal charges when
you make a withdrawal or when you begin the income phase of your contract.
    

                                        6
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

EXAMPLE 2 - IF YOU DO NOT WITHDRAW YOUR ASSETS

Example 2 assumes that you invest $1,000 in the qualified Variable Investment
Plan and allocate all of your assets to one of the variable investment options
and DO NOT WITHDRAW any of your assets at the end of the time period indicated.
The example also assumes that your investment has a 5% return each year and that
the mutual fund's operating expenses remain the same. Your actual costs may be
higher or lower, but based on these assumptions, your costs would be:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
                                                        1 YEAR            3 YEARS           5 YEARS          10 YEARS
           ----------------------------------------------------------------------------------------------------------
           <S>                                           <C>               <C>               <C>               <C>
           THE PRUDENTIAL SERIES FUND
                 Conservative Balanced Portfolio         $ 19              $ 59              $ 101             $ 220
                 Diversified Bond Portfolio              $ 18              $ 54              $  94             $ 204
                 Equity Income Portfolio                 $ 18              $ 54              $  94             $ 204
                 Equity Portfolio                        $ 18              $ 56              $  96             $ 209
                 Flexible Managed Portfolio              $ 19              $ 60              $ 104             $ 224
                 Global Portfolio                        $ 22              $ 68              $ 116             $ 250
                 Government Income Portfolio             $ 18              $ 55              $  94             $ 205
                 High Yield Bond Portfolio               $ 19              $ 59              $ 102             $ 221
                 Money Market Portfolio                  $ 17              $ 54              $  93             $ 203
                 Natural Resources Portfolio             $ 18              $ 56              $  97             $ 211
                 Prudential Jennison Portfolio           $ 20              $ 61              $ 105             $ 226
                 Small Capitalization Stock Portfolio    $ 18              $ 56              $  96             $ 209
                 Stock Index Portfolio                   $ 17              $ 53              $  91             $ 198
</TABLE>

These examples do not show past or future expenses. Actual expenses for a
particular year may be more or less than those shown in the examples.

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

Notes: (cont.) If your contract value is less than $10,000, on your contract
anniversary (and upon a surrender), we will deduct a $30 fee. The examples use
an average number as the amount of the annual contract fee. This amount was
calculated by taking the total annual contract fees collected in the preceding
calendar year and then dividing that number by the total assets allocated to the
variable investment options shown in the examples.

Based on this calculation the annual contract fee is included as an annual
charge of 0.02% of contract value. Your actual fees will vary based on the
amount of your contract and your specific allocation(s). A table of accumulation
unit values of interests in each variable investment option, appears under the
caption "OTHER INFORMATION" in this prospectus beginning on Page 20. Premium
taxes are not reflected in these examples. Premium taxes may apply depending on
the state where you live.
    

                                       7
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

1. WHAT IS THE QUALIFIED VARIABLE INVESTMENT PLAN VARIABLE ANNUITY?

The qualified Variable Investment Plan Variable Annuity is a contract designed
for use in connection with various retirement arrangements. The contract is
between your employer who is the owner, and us, the insurance company, The
Prudential Insurance Company of America (Prudential, We or Us). Under certain
circumstances, the contract is directly between you and the insurance company.

Under our contract or agreement, in exchange for your payment to us, we promise
to pay you a guaranteed income stream Your annuity is in the accumulation phase
until you decide to begin receiving annuity payments. The date you begin
receiving annuity payments is the annuity date. On the annuity date, your
contract switches to the income phase.

This annuity contract generally benefits from tax deferral. Tax deferral means
that you are not taxed on earnings or appreciation on the assets in your
contract until you withdraw money from your contract.

The qualified Variable Investment Plan is a variable annuity contract. This
means that during the accumulation phase, you can allocate your assets among 13
variable investment options and one guaranteed fixed interest-rate option. If
you select a variable investment option, the amount of money you are able to
accumulate in your contract during the accumulation phase depends upon the
investment performance of the mutual fund portfolio(s) that you have selected.
Because the value of the portfolios fluctuates, depending upon market
conditions, your assets can either increase or decrease in value. This is
important, since the amount of the annuity payments you receive during the
income phase depends upon the value of your contract at the time you begin
receiving payments.

As mentioned above, the qualified Variable Investment Plan also contains a
guaranteed fixed interest-rate option. This option offers an interest rate that
is guaranteed by us for one year and will always be at least 3% per year.

The owner of the contract has the decision-making rights under the contract. You
will be the annuitant unless you designate someone else. The annuitant is the
person who receives the annuity payments when the income phase begins. The
annuitant is also the person whose life is used to determine how much and how
long these payments will continue. On and after the annuity date, the annuitant
is the owner and may not be changed. The beneficiary becomes the owner when a
death benefit is payable.

BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued, unless you
change it at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before the annuitant or last surviving
annuitant dies. Your written request becomes effective when we approve it.

DEATH BENEFIT
If the annuitant dies during the accumulation phase, we will, upon receiving
appropriate proof of death, pay a death benefit to the beneficiary designated by
the contractowner.

This is how the amount of the death benefit is calculated:

IF THE ANNUITANT DIES DURING THE ACCUMULATION PHASE BEFORE AGE 65, the amount of
the death benefit will be the greater of (a) the current value of the contract
as of the date we receive appropriate proof of death, or (b) the total of all
purchase payments plus any bonus credited by Prudential, reduced proportionally
by withdrawals.

IF THE ANNUITANT IS AGE 65 OR OLDER, the amount of the death benefit will be the
current value of the contract as of the time we receive appropriate proof of
death.

Here is an example of how the death benefit is calculated:


                                       8
    
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

Suppose a contractowner had made purchase payments and was credited a bonus
totaling $100,000 but, due to unfortunate investment results, the contract value
had decreased to $80,000. If the annuitant is younger than 65, the death benefit
would still be $100,000. This amount, however, is reduced proportionally when
you make a withdrawal from the contract. If the contractowner had withdrawn 50%
of the remaining $80,000, the death benefit would also be reduced by 50%. Since
the death benefit had been $100,000, it would now be $50,000. As stated above,
after age 65, the death benefit amount is simply the value of the contract.

Death benefits payable under a qualified plan generally must be distributed
within five years after the annuitant's date of death. However, if the
beneficiary chooses an annuity payment option and if the annuity payments begin
within one year of the date of death, the death benefit may be distributed over
the beneficiary's life expectancy.

If the annuitant dies during the income phase, the death benefit, if any, is
determined by the type of annuity payment option you select.

SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"
If you change your mind about owning the qualified Variable Investment Plan, you
may cancel your contract within 10 days after receiving it (or whatever period
is required in the state where the contract was issued). You can request a
refund by returning the contract either to the representative who sold it to
you, or to the Prudential Annuity Service Center at the address shown on the
first page of this prospectus. You will receive, depending on applicable law: 

o    Your full purchase payment; or
o    The amount your contract is worth as of the day we receive your request.
     This amount may be more or less than your original payment.

OTHER CONTRACTS
This prospectus describes the qualified Variable Investment Plan contract which
is currently being offered for sale. There are earlier versions of the contract
which are no longer offered. These earlier versions have some different features
which include differences in:

o    payout options;
o    sales charges on withdrawals;
o    determination of payments to a beneficiary;
o    determination of the amount of monthly variable annuity payments.

If you are an owner of a contract that is no longer offered for sale, you can
find further information regarding contract differences throughout this
prospectus and in the Statement of Additional Information.

2. WHAT INVESTMENT OPTIONS CAN I CHOOSE?

The contract gives you the choice of allocating your purchase payments to any
one or more of the 13 variable investment options, or a guaranteed fixed
interest-rate option. The 13 variable investment options invest in Prudential
Series Fund portfolios which are managed by Prudential. The Prudential Series
Fund has a separate prospectus that is provided with this prospectus. YOU SHOULD
READ THE PRUDENTIAL SERIES FUND PROSPECTUS BEFORE YOU DECIDE TO ALLOCATE YOUR
ASSETS TO A VARIABLE INVESTMENT OPTION USING THAT FUND.

VARIABLE INVESTMENT OPTIONS

The Prudential Series Fund, Inc.

The Prudential Series Fund, Inc. is managed by Prudential through another
company it owns called The Prudential Investment Corporation. The Prudential
Investment Corporation manages each of the portfolios of the Prudential Series
fund except the Prudential Jennison Portfolio. For this portfolio, Prudential
Investment Corporation oversees another company owned by Prudential called
Jennison Associates Capital Corp. which provides the day to day investment
advisory services.

Listed below are the Prudential Series Fund portfolios which are available as
variable 


                                       9
    
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

investment options. Each portfolio has a different investment objective.

o    Conservative Balanced Portfolio
o    Diversified Bond Portfolio
o    Equity Income Portfolio
o    Equity Portfolio
o    Flexible Managed Portfolio
o    Global Portfolio
o    Government Income Portfolio
o    High Yield Bond Portfolio
o    Money Market Portfolio
o    Natural Resources Portfolio
o    Prudential Jennison Portfolio (domestic equity)
o    Small Capitalization Stock Portfolio
o    Stock Index Portfolio

FIXED INTEREST-RATE OPTION
We also offer a fixed interest-rate option. When you select this option, your
payment will earn interest at the established rate for a one-year period. This
rate will always be at least 3%. A new interest-rate period is established every
time you allocate or transfer money into the fixed interest-rate option. You may
have money allocated in more than one interest-rate period at the same time.
This could result in your money earning interest at different rates and each
interest-rate period maturing at a different time.

TRANSFERS AMONG OPTIONS
You are allowed to transfer, money among the variable investment options and
the fixed interest-rate option at least four times each contract year. We are
not currently enforcing this limit, however, we may do so in the future if it
becomes necessary due to excessive transfer activity. The minimum transfer
amount is $300 or the total amount in the investment option if it is less than
$300. Your transfer request may be made by telephone or in writing to the
Prudential Annuity Service Center. We have procedures in place to confirm that
instructions received by telephone are genuine. We will not be liable for
following telephone instructions that we reasonably believe to be genuine. Your
transfer request will take effect at the end of the business day on which it was
received.

YOU CAN MAKE TRANSFERS OUT OF THE FIXED INTEREST-RATE OPTION ONLY DURING THE
30-DAY PERIOD FOLLOWING YOUR CONTRACT ANNIVERSARY DATE.

The maximum amount you may transfer from the fixed interest rate option is
limited to the greater of:

o    25% of the amount allocated to the fixed interest rate option, or
o    $2,000.

DOLLAR COST AVERAGING
The Dollar Cost Averaging (DCA) feature allows you to systematically transfer a
percentage amount out of the money market variable investment option and into
any other variable investment option(s). You can transfer money to more than one
variable investment option. The investment option used for the transfers is
designated as the DCA account. You may choose to have these automatic transfers
from the DCA made monthly. By allocating amounts on a regular schedule instead
of allocating the total amount at one particular time, you may be less
susceptible to the impact of market fluctuations.

When you establish your DCA account with your first purchase payment, you must
allocate either $2,000 or 10% of your purchase payment, whichever is greater, to
your DCA account. If you establish your DCA account at a later time, a minimum
of $2,000 is required. Once your DCA account is opened, as long as it has a
positive balance, you may allocate or transfer amounts to the DCA account just
as you would with any other investment option.

Once established, your first transfer out of the account must be at least 3.0%
of your DCA account. The minimum amount you can transfer into any one investment
option is $20. Transfers will continue automatically until the entire amount in
your DCA account has been transferred or until you tell us to discontinue the
transfers. You can allocate subsequent purchase payments to re-open the DCA
account at any time.

Your transfers will be made on the last calendar day of each month, provided
that the New York Stock Exchange is open on that date. If the New York Stock
Exchange is not open on a particular transfer


                                       10
    
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

date, the transfer will take effect on the next business day.

Any transfers you make because of Dollar Cost Averaging are not counted toward
the four transfers you are allowed each year. This feature is available only
during the contract accumulation phase.

VOTING RIGHTS
Prudential is the legal owner of the shares in the Series Fund, however, we vote
the shares according to voting instructions received from contractowners. We
will mail you a proxy which is a form you need to complete and return to us to
tell us how you wish us to vote. When we receive those instructions, we will
vote all of the shares we own on your behalf, in accordance with those
instructions. We will vote the shares for which we do not receive instructions,
and the shares that we own directly, in the same proportion as the shares for
which instructions are received. We may change the way your voting instructions
are calculated if it is required by federal regulation.

SUBSTITUTION
We may substitute one or more of the Series Fund portfolios used by the variable
investment options. We may also cease to allow investments in existing
portfolios. We would do this only if events such as investment policy changes or
tax law changes make the portfolio unsuitable. We would not do this without the
approval of the Securities and Exchange Commission and necessary state insurance
department approvals. You will be given specific notice in advance of any
substitution we intend to make.

OTHER CHANGES
We may also make other changes to such things as the minimum amounts for
purchases, transfers, and withdrawals. However, before imposing such changes we
will give you at least 90 days notice.

3. WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)

PAYMENT PROVISIONS
Under the terms of the currently offered contract the annuitant can begin
receiving annuity payments at any time on or before the contract anniversary
that coincides with or next follows the annuitant's 90th birthday. At our
discretion, annuity payments may start at a later date. Different payment
provisions and income payments apply to certain previously offered contracts.
See the discussion contained in the statement of additional information for
further details.

You should be aware that generally under most tax-favored plans, you must begin
receiving payments by age 70 1/2. See Section 8, "WHAT ARE THE TAX
CONSIDERATIONS ASSOCIATED WITH THE QUALIFIED VARIABLE INVESTMENT PLAN
CONTRACT?."

You may choose among the annuity options described below (subject to the
retirement arrangement that covers you) at any time before the annuity date.
During the income phase, all of the annuity options under the currently offered
contract are fixed annuity options. This means that your participation in the
variable investment options ends on the annuity date. At any time before your
annuity date, you may ask us to change the annuity date specified in your
contract to another date. Unless we consent, the new date may not be before the
first day of the month following the date we received your request OR after the
first day of the month following your 90th birthday.

As indicated above, when you decide to begin receiving annuity payments, your
participation in the variable investment options ends. The value of your
contract at that time, together with your choice of annuity option, will help
determine how much your income payments will be. You should be aware that,
depending on how recently you made purchase payments, you may be subject to
withdrawal charges and the recapture of bonus payments when you annuitize. For
certain annuity options, these withdrawal charges will be waived.

If you have not selected an annuity option by the agreed upon annuity date, a
complete withdrawal will automatically be processed as of that date.


                                       11
    
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

OPTION 1. LIFE ANNUITY WITH 120 PAYMENTS
          (10 YEARS) CERTAIN
Under this option, we will make annuity payments to the annuitant monthly,
quarterly, semiannually, or annually as long as the annuitant is alive. If the
annuitant dies before we have made 10 years worth of payments, we will pay the
beneficiary the present value of the remaining certain period annuity payments
in one lump sum unless the annuitant has specifically instructed that the
remaining monthly annuity payments continue to be paid to the beneficiary. The
present value of the remaining certain period annuity payments is calculated by
using the interest rate used to compute the amount of the original 120 payments.
The interest rate used will always be at least 3.5% a year.

OPTION 2.  INTEREST PAYMENT OPTION
Under this option, you can choose to have us hold all or a portion of your
contract assets in order to accumulate interest. You can receive interest
payments on a monthly, quarterly, semiannual, or annual basis or you can allow
the interest to accrue on your contract assets. If you have not selected an
annuity option by the annuity date, this is the option we will automatically
select for you, unless prohibited by applicable law. Under this option, we will
pay you interest at an effective rate of at least 3% a year.

OPTION 3.  OTHER ANNUITY OPTIONS
We currently offer a variety of other annuity options not described above. At
the time you choose to receive your annuity payments, we may make available to
you any of the annuity options that are offered at your annuity date.

These options are referred to in your contract as the supplemental life annuity
option. Under the supplemental life annuity option, we will waive withdrawal
charges that might be applicable under other annuity options. In addition, if
you select Option 1 without a right of withdrawal, we will effect that option
under the supplemental life annuity option, if doing so provides greater monthly
payments.

4. WHAT IS THE 1% BONUS?

During the first three contract years, we will add an additional 1% to every
purchase payment that you make. After that, we will add the 1% bonus at our
discretion. We may limit our payment of the bonus to $1,000 per contract year.
The bonus payment will be allocated to your contract based on the way your
purchase payment is allocated among the variable investment options and the
fixed interest-rate option.

The bonus amount will not be subject to the charge for premium taxes. We will,
however, take the bonus payments back if you make a withdrawal of a purchase
payment within eight contract years of the time that the purchase payment was
made. The only exception would be if you annuitize your contract in a way that
is not subject to a sales charge or if you make a withdrawal under the Critical
Care Access Option.

5. HOW CAN I PURCHASE A QUALIFIED VARIABLE INVESTMENT PLAN CONTRACT?

PURCHASE PAYMENTS
Under a retirement plan, purchase payments are made through payroll deduction or
a similar arrangement with an employer. These payments must total at least $300
during any 12 month period. If you purchase the qualified Variable Investment
Plan outside of an employer sponsored retirement plan, your purchase payments
must be a minimum of $100, with a maximum contribution of $2,000 annually.

ALLOCATION OF PURCHASE PAYMENTS
When you purchase a contract, we will allocate your purchase payment among the
variable investment options and the fixed interest-rate option in whole
percentages from 10% to 100%. You can change your allocations by writing or
telephoning us at the Prudential Annuity Service Center. If you make additional
purchase payments, they will be allocated in the same way as your most recent
purchase payment, unless you tell us otherwise.

We will credit these purchase payments to your contract as of the end of the
business day on which the payment is received. Our business day closes 


                                       12
    
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                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

when the New York Stock Exchange does, usually at 4:15 p.m. Eastern time. If,
however, your first purchase payment is made and we do not have enough
information to establish your contract, we may need to contact you to request
the required information. If we are not able to get this information within five
business day, we will either return your purchase payment to you or get your
consent to continue holding it until we receive the necessary information.

CALCULATING CONTRACT VALUE
The value of the variable portion of your contract will go up or down depending
on the investment performance of the variable investment option(s) you choose.
To determine the value of your contract, we use a unit of measure called an
accumulation unit. An accumulation unit works like a share of a mutual fund.

Every day we determine the value of an accumulation unit for each of the
variable investment options. We do this by:

     1.   Adding up the total amount of money allocated to a specific investment
          option;

     2.   Subtracting from that amount insurance charges and any other charges
          such as taxes; and

     3.   Dividing this amount by the number of outstanding accumulation units.

When you make a purchase payment, we credit your contract with accumulation
units. The number of accumulation units credited to your contract is determined
by dividing the amount of the purchase payment allocated to an investment option
by the unit price of the accumulation unit for that investment option. We
calculate the unit price for each investment option after the New York Stock
Exchange closes each day and then credit your contract. The value of the
accumulation units can increase, decrease, or remain the same from day to day.
The Accumulation Unit Values chart on page 25 of this prospectus gives you more
detailed information about the accumulation units of the variable investment
options associated with the Prudential Series Fund.

We cannot guarantee that the value of your contract will increase or that it
will not fall below the amount of your total purchase payments. However, we do
guarantee a minimum interest rate of 3.0% a year on that portion of the contract
allocated to the fixed interest-rate option.

6. WHAT ARE THE EXPENSES ASSOCIATED WITH THE QUALIFIED VARIABLE INVESTMENT PLAN
   CONTRACT?

There are charges and other expenses associated with the contract that reduce
the return on your investment. These charges and expenses are described below.
These charges are not assessed against amounts allocated to the fixed
interest-rate option.

INSURANCE CHARGES
Each day, we make a deduction for insurance charges as follows:

The mortality risk charge is for assuming the risk that the annuitant(s) will
live longer than expected based on our life expectancy tables. When this
happens, we pay a greater number of annuity payments. The expense risk charge is
for assuming that the current charges will be insufficient in the future to
cover the cost of administering the contract.

The mortality and expense risk charge is equal, on an annual basis, to 1.20% of
the daily value of the contract invested in the variable investment options,
after expenses have been deducted. This charge is not assessed against amounts
allocated to the fixed interest-rate option.

If the charges under the contract are not sufficient, then we will bear the
loss. We do, however, expect to profit from this charge. The mortality and
expense risk charge cannot be increased. Any profits made from this charge may
be used by us to pay for the costs of distributing the contracts.

ANNUAL CONTRACT FEE
During the accumulation phase, if your contract value is less than $10,000 on
the contract anniversary date, we will deduct $30 per contract


                                       13
    
<PAGE>
   

                    VARIABLE INVESTMENT PLAN VARIABLE ANNUITY

year. This annual contract fee is used for administrative expenses and cannot be
increased. The $30 charge will be deducted proportionately from each of the
investment options that you have selected. This charge will also be deducted
when you surrender your contract if your contract value is less than $10,000 at
that time.

WITHDRAWAL CHARGE

During the accumulation phase you can make withdrawals from your contract. Your
withdrawal request will be processed as of the date it is received by us in good
order at the Prudential Annuity Service Center. 

When you make a withdrawal, money will be taken first from your earnings. When
your earnings have been used up, then we will take the money from your purchase
payments. You will not have to pay any withdrawal charge when you withdraw your
earnings. You will need to get our consent if you want to make a partial
withdrawal that is less than $300 or if making a partial withdrawal would reduce
your contract value to less than $300. 

You may be subject to certain restrictions on the withdrawal of salary reduction
contributions and earnings invested in annuity contracts which are subject to
Section 403(b) of the Internal Revenue Code. Under these annuity contracts,
withdrawals may be made prior to age 59 1/2 if you leave your job, die, or are
permanently disabled. For a complete discussion of these contracts, please refer
to Section 8 of this prospectus, "WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED
WITH THE QUALIFIED INDIVIDUAL VARIABLE INVESTMENT PLAN CONTRACT." 

The withdrawal charge is for the payment of the expenses involved in selling and
distributing the contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature and other
promotional activities. 

You can withdraw earnings plus up to 10% of the value of your total contract,
calculated as of the date of the first withdrawal made during a contract year
without paying a withdrawal charge. This amount is referred to as the
"charge-free" amount. During the first eight contract years following a purchase
payment, if your withdrawal is more than the charge-free amount, a withdrawal
charge will be applied.

For this purpose, we treat purchase payments as withdrawn on a first-in,
first-out basis.

The table below shows the withdrawal charges that would apply, based on the
number of contract years since the purchase payment was made:

                   Contract Years After Purchase Payment
                   -------------------------------------
                       0 ............................. 8%
                       1 ............................. 7%
                       2 ............................. 6%
                       3 ............................. 5%
                       4 ............................. 4%
                       5 ............................. 3%
                       6 ............................. 2%
                       7 ............................. 1%
              After that ............................. 0%

BONUS RECAPTURE
The bonus amount will be deducted from your contract value if you withdraw a
purchase payment within eight contract years after the payment was made. If you
make a withdrawal eight contract years or more after a purchase payment that was
credited with the bonus, you can withdraw all or part of your purchase payment
and retain the bonus amount.

CRITICAL CARE ACCESS
We will allow you to withdraw money from the contract and waive any withdrawal
and annual contract fee, if the annuitant or the last surviving co-annuitant (if
applicable) becomes confined to an eligible nursing home or hospital for a
period of at least three consecutive months. You would need to provide us with
proof of the confinement. If a physician has certified that the annuitant or
last surviving co-annuitant is terminally ill (has six months or less to live)
there will be no charge imposed for withdrawals. Critical Care Access is not
available in all states.


                                       14

    
<PAGE>
   

PREMIUM TAXES

Depending upon where you reside, it is possible that your premium payments may
be subject to taxation by federal, state or municipal agencies. We are
responsible for the payment of these taxes and will make a deduction from the
value of the contract to pay for them. Some of these taxes are due when the
contract is issued, others are due when annuity payments begin. It is our
current practice not to deduct these taxes until annuity payments begin. In the
few states that impose a tax, the current rates range up to 5%. If, in the
future, we are charged for additional taxes that are based upon purchase
payments, that charge may be passed on to the contractowner.

If you make a withdrawal eight contract years or more after a purchase payment
that was credited with the bonus, you can withdraw all or part of your purchase
payment and retain the bonus amount.

7. HOW CAN I ACCESS MY MONEY?

You can access your money by:

o     Making a withdrawal (either partial or complete); or

o     Electing to receive annuity payments during the income phase.

When you make a complete or partial withdrawal, you will receive the value of
your contract on the day you made the withdrawal, less any applicable charges
and fees as of the date we receive your request at the Prudential Annuity
Service Center in a form acceptable to us. Unless you tell us otherwise, any
partial withdrawal will be made proportionately from all of the variable
investment options as well as the fixed interest-rate option, depending on your
investment selections. that you have selected. You will have to receive our
consent to make a partial withdrawal if the amount is less than $300 or if as a
result of the withdrawal the value of your contract would be reduced to less
than $300.

We will generally pay the withdrawal amount, less any required tax withholding,
within seven days after we receive a properly completed withdrawal request. We
will deduct applicable charges, if any, from the assets in your contract.

INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE. FOR A MORE COMPLETE EXPLANATION, SEE SECTION 8 OF THIS PROSPECTUS AND
THE TAX DISCUSSION IN THE STATEMENT OF ADDITIONAL INFORMATION.

SUSPENSION OF PAYMENTS OR TRANSFERS

We may be required to suspend or postpone payments made in connection with
withdrawals or transfers for any period when:

      1.    The New York Stock Exchange is closed (other than customary weekend
            and holiday closings);

      2.    Trading on the New York Stock Exchange is restricted;

      3.    An emergency exists during which sales of shares of the mutual funds
            are not reasonable or We cannot reasonably value the accumulation
            units; or

      4.    The Securities and Exchange Commission, by order, so permits
            suspension or postponement of payments for the protection of owners.

We expect to pay the amount of any withdrawal or transfer made from your
investment options promptly upon request. We are, however, permitted to delay
payment for up to six months on withdrawals from the fixed interest-rate option.
If we delay payment for more than 30 days, we will pay you interest at an
annualized rate of at least 3%.

8. WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE QUALIFIED VARIABLE
   INVESTMENT PLAN CONTRACT?

The following discussion is general in nature and describes only federal income
tax law, not state or other tax laws. It is based on current law and
interpretations, which may change. It is not intended as tax advice. YOU SHOULD
CONSULT A QUALIFIED TAX ADVISER FOR COMPLETE INFORMATION AND ADVICE.

ANNUITY QUALIFICATION

This discussion assumes that the contract will be treated as an annuity contract
for federal income tax purposes. In order to qualify for the tax rules
    

                                       15
<PAGE>
   

applicable to annuity contracts, the assets underlying the contract must be
diversified according to certain rules. For further detail on diversification
requirements, see DIVIDENDS, DISTRIBUTIONS AND TAXES in the attached prospectus
for the Series Fund. Tax rules also require that we, and not you as the
contractowner, must have sufficient control over the underlying assets to be
treated as the owner of the underlying assets for tax purposes. We believe the
contract is an annuity contract under the tax rules. However, we reserve the
right to make any changes we deem necessary to assure that the contract
qualifies as an annuity contract for tax purposes. Any such changes will apply
uniformly to affected contractowners and will be made with as much advance
notice to affected contractowners as is feasible under the circumstances.

TAXES ON PRUDENTIAL

Although the separate account is registered as an investment company, it is not
a separate taxpayer for purposes of the Internal Revenue Code. The earnings of
the account are taxed as part of the operations of Prudential. No charge is
being made currently against the account for company federal income taxes. We
will review the question of a charge to the account for company federal income
taxes periodically. Such a charge may be made in future years for any federal
income taxes that would be attributable to the contract.

Under current law, Prudential may incur state and local taxes in addition to
premium taxes in several states. At present, these taxes are not significant and
they are not charged against the contract or the account. If there is a material
change in applicable state or local tax laws, the imposition of these taxes upon
Prudential that are attributable to the account may result in a corresponding
charge against the account.

RETIREMENT ARRANGEMENTS USING THE CONTRACT

The provisions of the Code that apply to retirement programs are complex, and
the tax rules vary according to the type of plan and its terms and conditions.
This section of the prospectus provides only general information about the types
of arrangements with which the contracts may be used. These arrangements include
individual retirement accounts and annuities ("IRAs"), simplified employee
pension plans ("SEPs"), tax deferred annuities ("TDAs"), and deferred
compensation plans of state and local governments and tax exempt organizations
("Section 457 Plans").

You should consult a qualified tax adviser before purchasing a contract,
particularly if you feel there is a possibility that you will be making
withdrawals from your contract before annuity payments begin. Withdrawals may be
subject to income tax consequences, including tax penalties.

In general, assuming that you comply with to the requirements and limitations of
the Code provisions applicable to the type of retirement arrangement in which
you are participating, purchase payments (other than after-tax employee
payments) under the contract will be deductible (or not includible in your
income) up to certain amounts each year. In addition, federal income tax
currently is not imposed upon the investment income and realized gains of the
subaccounts in which your purchase payments have been invested until a
distribution is received. When a distribution is received, either as a lump sum
or an annuity, all or a portion of the distribution is normally taxable as
ordinary income. In some cases, the tax on lump-sum distributions may be limited
by a special income-averaging rule.

The comments which follow concerning specific tax favored plans are intended
merely to call attention to certain of their features. No attempt has been made
to discuss in full the tax ramifications involved or to offer tax advice. As
suggested above, a qualified tax adviser should be consulted for advice and
answers to any questions.

PLANS FOR SELF-EMPLOYED INDIVIDUALS

For self-employed individuals who establish qualified plans, contributions are
deductible within the limits prescribed by the Code. Annual deductible
contributions cannot exceed the lesser of $30,000 or 25% of "earned income." For
this purpose "earned income" is computed after the deduction for contributions
to the plan is considered.

Payments generally must begin by April 1 of the year following the later of the
calendar year in 
    

                                       16
<PAGE>
   

which the employee (1) attains age 70-1/2 or (2) retires.

IRAS

For persons who establish IRAs, the annual contribution limit is the lesser of
(1) $2,000 or (2) 100% of earned income. An IRA contribution of up to $2,000 for
each spouse is permitted, including a non-working spouse, if the combined
compensation of both spouses is at least equal to the contributed amount
provided that the non-working spouse earns less than the working spouse and they
file a joint return. Generally, for traditional IRAs, distributions must begin
by April 1 of the year following attainment of age 70-1/2 and are subject to
certain minimum distribution requirements. Certain penalties may result if the
contribution or age limitations are exceeded.

Deductions for IRA contributions in those cases where an individual is an active
participant in an employer sponsored pension plan, SEP, SIMPLE, Section 403(a)
plan, or TDA are limited to individuals whose adjusted gross income is less than
certain specified amounts. These amounts are adjusted each year. For 1998, the
amounts are as follows: For married individuals who file a joint tax return, a
full deduction will be available if adjusted gross income is $50,000 or less.
For a single individual, the limit is $30,000. Partial deductions for IRA
contributions will be available for married joint filers who have adjusted gross
income of more than $50,000 and less than $60,000, and single individuals whose
adjusted gross income is less than $40,000. In the case of an individual who is
not an active participant in an employer sponsored plan as described above, but
whose spouse is an active participant, a full deduction will be available for
married joint filers if adjusted gross income is $150,000 or less, with partial
deductions being available for adjusted gross income up to $160,000.

SIMPLIFIED EMPLOYEE PENSION PLANS ("SEPS")

Under a SEP, annual employer contributions to an IRA established by an employee
are not includible in income up to the lesser of $30,000 or 15% of the
employee's earned income (excluding the employer's contribution to the SEP). In
addition, a SEP must satisfy certain minimum participation requirements and
contributions may not discriminate in favor of highly compensated employees.
Contracts issued as IRAs established under a SEP must satisfy the requirements
described above for an IRA.

Certain SEP arrangements are permitted to allow employees to elect to reduce
their salaries by as much as $10,000 (in 1998, as indexed) and have their
employer contribute on their behalf to the SEP. These arrangements, called
salary reduction SEPs, are available only if the employer maintaining the SEP
has 25 or fewer employees and at least 50% of the eligible employees elect to
make salary reduction contributions. Other limitations may reduce the
permissible contribution level for highly compensated employees. New Salary
Reduction SEPs may not be established after 1996.

DISCLOSURE AND "FREE LOOK"

If you purchase a contract used as an IRA, including one established under a SEP
arrangement, you will be given disclosure material prepared by Prudential. The
material includes this prospectus, a copy of the contract, and a brochure
containing information about eligibility, contribution limits, tax consequences,
and other particulars concerning IRAs.

You must be given a "free look" after making an initial contribution in which to
affirm or reverse your decision to participate. Therefore, within the free look
period, you may cancel your contract by notifying Prudential in writing, and
Prudential will refund the purchase payments under the contract or, if greater,
the amount credited under the contract (less any bonus) computed as of the
valuation period that Prudential receives the notice for cancellation. See
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK," page 9.

TDAS

Tax law permits employers and employees of Section 501(c)(3) tax-exempt
organizations and public educational organizations to make, subject to certain
limitations, contributions to an annuity in which the employee's rights are
nonforfeitable (commonly referred to as a "tax deferred annuity" or "TDA"). The
amounts contributed under a TDA 
    

                                       17
<PAGE>
   

and earnings thereon are not taxable as income until distributed as annuity
income or otherwise.

Generally, contributions to a TDA may be made through a salary reduction
arrangement up to a maximum of $10,000 (in 1998, as indexed). However, under
certain special rules, the limit could be increased as much as $3,000. In
addition, the Code permits certain total distributions from a TDA to be "rolled
over" to another TDA or IRA. Certain partial distributions from a TDA may be
"rolled over" to an IRA.

An annuity contract will not qualify as a TDA, unless under such contract,
distributions from salary reduction contributions and earnings thereon (other
than distributions attributable to assets held as of December 31, 1988) may be
paid only on account of attainment of age 59-1/2, severance of employment,
death, total and permanent disability and, in limited circumstances, hardship.
(Such hardship withdrawals are permitted, however, only to the extent of salary
reduction contributions and not earnings thereon.)

The withdrawal restrictions referred to above do not apply to the transfer of
all or part of a contract owner's interest in his or her contract among the
available investment options offered by Prudential or to the direct transfer of
all or part of the contract owner's interest in the contract to a TDA of another
insurance company or to a mutual fund custodial account under Section 403(b)(7)
of the Code. In imposing the restrictions on withdrawals as described above,
Prudential is relying upon a no-action letter dated November28, 1998 from the
Chief of the Office of Insurance Products and Legal Compliance of the Securities
and Exchange Commission to the American Council of Life Insurance.

Employer contributions are subject generally to the same coverage, minimum
participation and nondiscrimination rules applicable to qualified pension and
profit-sharing plans. Distributions from a TDA generally must commence by April
1 of the calendar year following the later of the calendar year in which the
employee (1) attains age 70 1/2; or (2) retires. Distributions must satisfy
minimum distribution requirements similar to those that apply to qualified plans
generally.

ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE OR LOCAL GOVERNMENTS AND TAX
EXEMPT ORGANIZATIONS

A contract may be used to fund an eligible deferred compensation plan of a state
or local government or a tax-exempt organization (commonly called a "Section 457
Plan"). The amounts contributed under such plans and increments thereon are not
taxable as income until distributed or otherwise made available to the employee
or other beneficiary. However, if the tax law requirements are not met,
employees may be required to include in gross income all or part of the
contributions and earnings thereon.

Assets of deferred compensation plans are generally part of the employer's
general assets. However, governmental employers are required to hold assets in a
trust, annuity contract or custodial account. Contributions generally may not
exceed the lesser of $8,000 (in 1998, as indexed) or 33-1/3% of the employee's
compensation.

Generally, distributions must begin by April 1 of the calendar year following
the later of the calendar year in which the employee (1) attains age 70-1/2; or
(2) retires. Distributions are subject to special minimum distribution rules in
addition to the minimum distribution requirements for qualified plans. Rollovers
are not permitted (other than between Section 457 Plans).

QUALIFIED PENSION AND PROFIT SHARING PLANS

A contract may be used to fund a qualified pension or profit-sharing plan. The
plan itself must satisfy the coverage, minimum participation, nondiscrimination,
minimum distribution, and all other requirements applicable generally to
qualified pension and profit-sharing plans. The Code also imposes dollar
limitations on contributions that may be made to or benefits that may be
received from a qualified pension or profit-sharing plan (including a limitation
of $10,000 (in 1998 as indexed) on the amount that an employee may contribute
through a "401(k) plan"). Generally, distributions from a qualified plan must
begin by April 1 of the calendar year following the later of the calendar year
in which the employee (1) attains age 70-1/2; or (2) 
    

                                       18
<PAGE>
   

retires. Distributions are subject to certain minimum distribution requirements.

MINIMUM DISTRIBUTION OPTION

The Minimum Distribution Option is a program available with IRA and SEP
programs. It enables the client to satisfy IRS minimum distribution
requirements, without having to annuitize or cash surrender their Contracts.
Distributions from traditional IRAs and SEPs must begin by April 1 of the year
following attainment of age 70-1/2. Each year until the maturity date,
Prudential will recalculate the minimum amount that you are required to withdraw
from your IRA or SEP. We will send you a check for the minimum distribution
amount less any partial withdrawals made during the year. Our calculations are
based solely on the cash value of the contract on the last day of the prior
calendar year. If you have other IRA accounts, you will be responsible for
taking the minimum distribution from each.

PENALTY FOR EARLY WITHDRAWALS

A 10% penalty tax will generally apply to the taxable part of distributions
received from an IRA, SEP, TDA, and qualified retirement plans before age
59-1/2. Limited exceptions are provided, such as where amounts are paid in the
form of a qualified life annuity, upon death or disability of the employee, to
pay certain medical expenses, or, in some cases, upon separation from service on
or after the attainment of age 55.

WITHHOLDING

Certain distributions from qualified retirement plans and TDAs will be subject
to mandatory 20% withholding unless the distribution is an eligible rollover
distribution that is "directly" rolled over into another qualified plan, TDA or
IRA. Unless you elect otherwise, the portion of any taxable amounts received
under your contract will be subject to withholding to meet federal tax
obligations.

The rate of withholding on periodic annuity payments where mandatory withholding
is not required will be determined on the basis of the withholding certificate
you may file with us. For payments not subject to mandatory withholding, if you
do not file such a certificate and you will be receiving periodic annuity
payments, you shall be treated, for purposes of determining your withholding
rate, as a married person with three exemptions; the rate of withholding on all
other payments under your contract, such as withdrawals, will be 10%. In the
absence of an election by you that we should not do so, it will withhold from
every withdrawal or annuity payment the appropriate percentage of the amount of
the payment that we reasonably believe is includible in gross income. We will
provide forms and instructions concerning the right to elect that no amount be
withheld from payments.

Recipients, including those who have elected out of withholding, must supply
their Taxpayer Identification Number (Social Security Number) to payers of
distributions for tax reporting purposes. Failure to furnish this number when
required may result in the imposition of a tax penalty and will subject the
distribution to the withholding requirements of the law described above.

Special withholding rules apply to nonresident aliens. Generally, there will be
no withholding for taxes until payments are actually received under the
contract. Distributions to contractowners under Section 457 Plans are treated as
the payment of wages for federal income tax purposes and thus are subject to the
general withholding requirements.

INTERESTED PARTY DISCLOSURE

The Employee Retirement Income Security Act of 1974 ("ERISA") prevents a
fiduciary with respect to a pension or profit-sharing plan from receiving any
benefit from any party dealing with the plan as a result of the sale of the
contract (other than benefits that would otherwise be provided in the plan).

Administrative exemptions issued by the IRS and the Department of Labor permit
transactions between insurance agents and qualified pension and profit sharing
plans and with SEP IRAs. To be able to rely on the exemption, certain
information must be disclosed to the plan fiduciary. The information that must
be disclosed includes the relationship between the agent and the insurer, a
description of any charges, fees, discounts, penalties or adjustments that may
be imposed in connection 
    

                                       19
<PAGE>
   

with the purchase, holding, exchange or termination of the contract, as well as
the commissions received by the agent.

In addition to disclosure, other conditions apply to the use of the exemption.
For example, a plan fiduciary may not be a partner or employee of the Prudential
representative making the sale. The fiduciary must not be a relative of the
representative (including spouse, direct descendant, spouse of a direct
descendant, ancestor, brother, sister, spouse of a brother or sister). The
representative may not be an employee, officer, director or partner of either
the independent fiduciary or the employer establishing the plan. No relative of
the representative may: (1) control, directly or indirectly, the corporation
establishing or maintaining the plan; (2) be either a partner with a 10% or more
interest in the partnership or the sole proprietor establishing or maintaining
the plan; or (3) be an owner of a 5% or more interest in a Subchapter S
Corporation establishing or maintaining the plan. In addition, no affiliate
(including relatives) of the representatives may be a trustee, administrator or
a fiduciary with written authority to acquire, manage or dispose of the assets
of the plan.

9. OTHER INFORMATION 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

The Prudential Insurance Company of America ("Prudential") is a mutual insurance
company founded in 1875 under the laws of the State of New Jersey. It is
licensed to sell life insurance and annuities in the District of Columbia, Guam,
the U.S. Virgin Islands and in all states. Prudential is subject to the
insurance laws and regulations of all states where it is licensed to do
business.

Prudential is currently considering reorganizing itself into a publicly traded
stock company through a process known as "demutualization." On February 10,
1998, the company's Board of Directors authorized management to take the
preliminary steps necessary to allow the company to demutualize. On July 1,
1998, legislation was enacted in New Jersey that would permit this conversion to
occur and that specified the process for conversion. Demutualization is a
complex process involving development of a plan of reorganization, adoption of a
plan by the company's Board of Directors, a public hearing, voting by qualified
policyholders and regulatory approval. This process could take two or more years
to complete. Prudential's management and Board of Directors have not yet
determined to demutualize and it is possible that, after careful review,
Prudential could decide not to go public.

The plan of reorganization, which has not yet been developed and approved, would
provide the criteria for determining eligibility and the methodology for
allocating shares or other consideration to those who would be eligible.
Generally, the amount of shares or other consideration eligible customers would
receive would be based on a number of factors, including the types, amounts and
issue years of their policies. As a general rule, owners of Prudential-issued
insurance policies and annuity contracts would be eligible, while mutual fund
customers and customers of the company's subsidiaries would not be. It has not
yet been determined whether any exceptions to that general approach will be made
with respect to policyholders and contractowners of Prudential's subsidiaries.

THE SEPARATE ACCOUNT

We have established a separate account, the Prudential Qualified Individual
Variable Contract Account (Separate Account), to hold the assets that are
associated with the contracts. The separate account was established under New
Jersey law on October 12, 1982, and is registered with the U.S. Securities and
Exchange Commission under the Investment Company Act of 1940, as a unit
investment trust, which is a type of investment company. The assets of the
separate account are held in the name of Prudential and legally belong to us.
These assets are kept separate from all of our other assets and may not be
charged with liabilities arising out of any other business we may conduct. More
detailed information about Prudential, including its consolidated financial
statements, are provided in the Statement of Additional Information.
    

                                       20
<PAGE>
   

SALE OF THE CONTRACT AND DISTRIBUTOR

Currently, Pruco Securities Corporation ("Prusec") acts as the distributor of
the contracts. Prusec is a wholly-owned subsidiary of Prudential. Prudential
expects that at some time during 1999 Prusec's responsibilities as distributor
will be assigned to Prudential Investment Management Services LLC ("PIMS"). PIMS
is also a wholly-owned subsidiary of Prudential and is a limited liability
corporation organized under Delaware law in 1996. Both Prusec and PIMS are
registered as broker-dealers under the Securities Exchange Act of 1934 and are
members of the National Association of Securities Dealers, Inc.

Commissions for the sales of contracts are paid to Prudential financial
professionals and to other independent broker-dealers who sell the contracts.
Registered representatives of independent broker-dealers may be paid on a
different basis than those affiliated with Prusec. The maximum commission that
will be paid to the broker-dealer to cover both the individual representative's
commission and other distribution expenses will not be more than 6% of the
purchase payment.

ASSIGNMENT

Since the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your representative.

EXCHANGE OFFER FOR CERTAIN CONTRACTOWNERS

Subject to regulatory approval, we may permit contractowners under certain
qualified plans to exchange their contracts for certain mutual funds or variable
annuity contracts.

MUTUAL FUND OFFER. Subject to regulatory approval, if the qualified plan has $1
million or more invested in one or more contracts, we may permit the
contractowners to exchange their contracts for shares of certain mutual funds
managed by Prudential Funds Investment Management LLC, a wholly-owned subsidiary
of Prudential. We will not charge any fee at the time of the exchange. We will
waive the following charges that might otherwise be applicable to a withdrawal
or surrender of the contract: the sales charge on withdrawal, the recapture of
additional amounts, and the annual administrative charge. In addition, the
mutual funds waive any sales charge that would usually be imposed on the
purchase of the mutual fund shares. The plan sponsor, not the participants, may
be required to agree to make a payment approximating the contract's sales charge
if the plan terminates its recordkeeping with Prudential and/or makes certain
withdrawals from the funds while the contract's sales charge would have been in
effect. Before deciding to make any exchanges, you should carefully read the
prospectus for the mutual funds you are considering. The mutual funds are not
variable annuity contracts like the contracts, and therefore any investment in
the mutual funds does not come with the same features as the contracts, such as
the death benefit and the right to effect an annuity.

GROUP DISCOVERY SELECT OFFER. We may permit the Contract owners to exchange
their contracts for Discovery Select Group Variable Annuity Contracts ("Group
Discovery Select") issued by Prudential. In general, this offer will be
available only to contractowners that are part of a qualified plan with 25 or
more participants. We may, however, make the offer available to certain group
plans using a single contract, even if the plan has fewer than 25 participants.
Group Discovery Select provides 22 investment options, some of which are managed
by a Prudential affiliate and some of which are managed by unaffiliated
advisors. We will not charge any fee at the time of the exchange. We will waive
the following charges that might otherwise be applicable to a withdrawal or
surrender of the contract: the sales charge on withdrawal, the recapture of
additional amounts, and the annual administrative charge. Contractowners
switching to Group Discovery Select will be subject to the charges under Group
Discovery Select, including the withdrawal charge. For purposes of that charge,
years of participation in the contract will be counted as years of participation
in Group Discovery Select. Before deciding to make any exchange, you should
carefully read the prospectus for Group Discovery Select and the prospectuses
for the investment options you are considering.

REQUIREMENTS. We will determine, in our sole discretion, to whom an exchange
offer will be made, the time period during which the exchange 
    

                                       21
<PAGE>
   

offer will be in effect, and when to terminate an exchange offer. We may
establish fixed periods of time for exchanges under a particular contract or
group of contracts (a "window") of at least 60 days in length. These exchange
offers are subject to termination and their terms are subject to change.

TAXES. There should be no adverse tax consequences if a participant in a
qualified retirement arrangement, in a deferred compensation plan under Section
457 or in an individual retirement account under Section 408 of the Internal
Revenue Code elects to exchange from a contract to Discovery Select or to mutual
funds. For 403(b) plans, exchanges from a contract to a mutual fund will be
effected from a 403(b) annuity contract to a 403(b)(7) custodial account so that
the transaction will not constitute a taxable distribution. However, 403(b)
participants should be aware that the Internal Revenue Code may impose more
restrictive rules on early withdrawals from Section 403(b)(7) custodial accounts
than from annuity contracts.

DEMUTUALIZATION. If the plan sponsor or participants exchange a contract and if
Prudential demutualizes in the future, the contractowner might not receive
consideration it might otherwise have received or the amount of the
consideration received could be smaller than had the contract not been
exchanged. As a general rule, owners of Prudential-issued insurance policies and
annuity contracts would be eligible, while mutual fund customers and customers
of the company's subsidiaries would not be. Decisions regarding the exchange of
contracts should be based on the desire for the features of the new product as
well as your insurance needs, and not on Prudential's potential demutualization.
For more information about demutualization, see page 20.

LITIGATION

On October 28, 1996, Prudential entered into a Stipulation of Settlement in a
multidistrict proceeding involving allegations of various claims relating to
Prudential's life insurance sales practices. (In re Prudential Insurance Company
of America Sales Practices Litigation, D.N.J., MDL No. 1061, Master Docket No.
95-4704 (AMW)). On March 7, 1997, the United States District Court for the
District of New Jersey approved the Stipulation of Settlement as fair,
reasonable and adequate, and later issued a Final Order and Judgment in the
consolidated class actions before the court, 962 F. Supp. 450 (March 17, 1997,
as amended April 14, 1997). The Court's Final Order and Judgment approving the
class Settlement was appealed to the United States Court of Appeals for the
Third Circuit, which upheld the district court's approval of the Stipulation of
Settlement on July 23, 1998. The Supreme Court denied certiorari in January
1999, thereby making final the approval of the class action settlement.

Pursuant to the Settlement, Prudential agreed to provide and has been
implementing an Alternative Dispute Resolution ("ADR") process for class members
who believe they were misled concerning the sale or performance of their life
insurance Contracts. As of December 31, 1998, based on an analysis of claims
actually remedied, a sample of claims still to be remedied, and estimates of
additional liabilities associated with the ADR program, management estimated the
cost, before taxes, of remedying policyholder claims in the ADR process to be
approximately $2.56 billion. While management believes these to be reasonable
estimates based on available information, the ultimate amount of the total cost
of remedied policyholder claims and other related costs is dependent on complex
and varying factors, including the relief options still to be chosen by
claimants, the dollar value of those options, and the number and type of claims
that may successfully be appealed.

In addition, a number of actions have been filed against Prudential by
policyholders who have excluded themselves from the Settlement; Prudential
anticipates that additional suits may be filed by other policyholders.

Also, on July 9, 1996, a Multi-State Life Insurance Task Force comprised of
insurance regulators from 29 states and the District of Columbia, released a
report on Prudential's activities. As of February 24, 1997, Prudential had
entered into consent orders or agreements with all 50 states and the District of
Columbia to implement a remediation plan, whose terms closely parallel the
Settlement approved in the MDL proceeding, and agreed to a series of payments
allocated to all 50 states and the District 
    

                                       22
<PAGE>
   

of Columbia amounting to a total of approximately $65 million. These agreements
are now being implemented through Prudential's implementation of the class
Settlement.

Prudential's litigation is subject to many uncertainties, and given the
complexity and scope, the outcomes cannot be predicted with precision. It is
possible that the results of operations or the cash flow of the company, in
particular quarterly or annual periods, could be materially affected by an
ultimate unfavorable outcome of the matters specifically discussed above.
Management believes, however, that the ultimate resolution of all such matters,
after consideration of applicable reserves, should not have a material adverse
effect on Prudential's financial position.

YEAR 2000 COMPLIANCE

THE YEAR 2000 ISSUE

The services provided to you as a purchaser of the qualified Variable Investment
Plan depend on the smooth functioning of numerous computer systems. Many
computer systems in use today are programmed to recognize only the last two
digits of a date as the year. As a result, any systems using this kind of
programming can not distinguish a date using "00" and may treat it as "1900"
instead of "2000." This problem may impact computer systems that store business
information, but it could also affect other equipment used in our business like
telephone, fax machines and elevators. If this problem is not corrected, the
"Year 2000" issue could affect the accuracy and integrity of business records.
Prudential's regular business operations could be interrupted as well as those
of other companies that deal with us.

In addition, the operations of the mutual fund associated with the qualified
Variable Investment Plan could experience problems resulting from the Year 2000
issue. Please refer to the mutual fund prospectus for information regarding its
approach to Year 2000 concerns. The following describes Prudential's effort to
address Year 2000 concerns.

To address this potential problem Prudential organized its Year 2000 efforts
around the following three areas: 

o     BUSINESS SYSTEMS - Computer programs directly used to support our
      business;

o     INFRASTRUCTURE - Computers and other business equipment like telephones
      and fax machines; and

o     BUSINESS PARTNERS - Year 2000 readiness of essential business partners.

BUSINESS SYSTEMS. The business systems component includes a wide range of
computer programs that directly support Prudential's business operations
including systems for: insurance product processing, securities trading,
personnel record keeping and general accounting systems. All business systems
were analyzed to determine whether each computer program with a Year 2000
problem should be retired, replaced or renovated. The majority of this work has
been completed. A few remaining programs are currently being tested and
completion of this process is expected by June, 1999. 

INFRASTRUCTURE. As with business applications, we established a specific
methodology and process for addressing infrastructure issues. The infrastructure
effort includes mainframe computer system hardware and operating system
software, mid-range systems and servers, telecommunications equipment and
systems, buildings and facilities systems, personal computers, and vendor
hardware and software. Other tan desktop systems, substantially all other
infrastructure systems have been tested. Presently, a small number of midrange
computers, and building and facility systems are still in the testing phase. We
expect to have the infrastructure implementation process completed by June,
1999.

BUSINESS PARTNERS. Prudential recognizes the importance of determining the Year
2000 readiness of external business relationships especially those that involve
electronic data transfer products and services, and products that impact our
essential business processes. Prudential first classified each business partner
as "highly critical" or "less critical" to our business, and then began to
develop risk assessment and contingency plans to address the potential that a
business partner could experience a Year 2000 failure. All highly critical
business partner relationships have been assessed and contingency planning is
completed. Risk assessment and contingency planning continues for 
    

                                       23
<PAGE>
   

less critical business partners, and the target completion date for these
relationships is June, 1999.

Prudential believes that the Business Application, Infrastructure and Business
Partners components of the Year 2000 project are substantially on schedule. A
small number of the projects may not meet their targeted completion date.
However, Prudential expects that these projects will be completed by September,
1999. If there are any delays, they should not have a significant impact on the
timing of the project as a whole.

THE COST OF YEAR 2000 READINESS

Prudential is funding the Year 2000 program from internal operating budgets, and
estimates that its total costs to address the Year 2000 issue will total
approximately $220 million. Because these expenses were part of the operating
budget, they did not impact the management of the qualified Variable Investment
Plan. During the course of the Year 2000 program, some optional computer
projects have been delayed, but these delays have not had any material effect on
the qualified Variable Investment Plan.

YEAR 2000 RISKS AND CONTINGENCY PLANNING

Prudential believes that it is well positioned to lessen the impact of the Year
2000 problem. However, given the nature of this issue, we can not be 100%
certain that we are completely prepared, particularly because we cannot be
certain of Year 2000 readiness of third parties. As a result, we are unable to
determine at this time whether the consequences of Year 2000 failures may have a
material adverse effect on the results of Prudential's operations, liquidity or
financial condition. In the worst case, it is possible that a Year 2000
technology failure, whether internal or external, could have a material impact
on Prudential's results of operations, liquidity, or financial position. If
Prudential is unable to address the Year 2000 problem, we may have difficulty in
responding to your incoming phone calls, calculating your unit values or
processing withdrawals and purchase payments. It is also possible that the
mutual fund associated with the qualified Variable Investment Plan will be
unable to value its securities, in turn creating difficulties in purchasing or
selling shares of the mutual fund and calculating corresponding unit asset
values. The objective of Prudential's Year 2000 program has been to reduce these
risks as much as possible.

Most of the operations of the qualified Variable Investment Plan involve such a
large number of individual transactions that they can only be handled with the
help of computers. As a result, our current contingency plans include responses
to the failure of specific business programs or infrastructure components.
However, our contingency responses are now being reviewed and we expect to
finalize them by June, 1999 to ensure that they are workable under the special
conditions of a Year 2000 failure. Prudential believes that with the completion
of its Year 2000 program as scheduled, the possibility of significant
interruptions of normal operations will be reduced.
    
FINANCIAL STATEMENTS

   
The consolidated financial statements of Prudential and Subsidiaries and the
financial statements of the separate account associated with the qualified
Variable Investment Plan are included in the Statement of Additional
Information.
    

STATEMENT OF ADDITIONAL INFORMATION
   
CONTENTS:

o     Company

o     Directors and OfficerS

o     Further Information Regarding Previously Offered Qualified Individual
      Variable Investment Plan Contracts

o     Participation in Divisible Surplus

o     Performance Information

o     Legal Opinions

o     Experts

o     Financial Information
    
                                       24

<PAGE>
   
<TABLE>
                                                      ACCUMULATION UNIT VALUES
                                    THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
                                                  (CONDENSED FINANCIAL INFORMATION)
<CAPTION>
                                                                                             SUBACCOUNTS
                                                                     --------------------------------------------------------

                                                                                            MONEY MARKET
                                                                     --------------------------------------------------------
                                                                      01/01/98       01/01/97        01/01/96      01/01/95  
                                                                         to             TO              TO            TO     
                                                                      12/31/98       12/31/97        12/31/96      12/31/95  
                                                                     -----------    -----------    -----------   ------------
<S>                                                                  <C>            <C>            <C>           <C>         
1. Accumulation unit value at beginning of period ................   $     2.092    $     2.008    $     1.931   $     1.847 
2. Accumulation unit value at end of period ......................         2.179          2.092          2.008         1.931 
3. Number of accumulation units outstanding at end of period .....    42,185,333     42,127,659     51,204,795    51,330,984 
                                                                     --------------------------------------------------------

<CAPTION>
                                                                                         DIVERSIFIED BOND
                                                                     --------------------------------------------------------
                                                                      01/01/98       01/01/97        01/01/96      01/01/95  
                                                                         to             TO             TO             TO     
                                                                      12/31/98       12/31/97        12/31/96      12/31/95  
                                                                     -----------    -----------    -----------   ------------
<S>                                                                  <C>            <C>            <C>           <C>         
1. Accumulation unit value at beginning of period ................   $     3.208    $     2.990    $     2.899   $     2.430 
2. Accumulation unit value at end of period ......................         3.397          3.208          2.990         2.899 
3. Number of accumulation units outstanding at end of period .....    32,226,526     33,970,626     38,483,488    38,379,871 
                                                                     --------------------------------------------------------

<CAPTION>
                                                                                             EQUITY
                                                                     --------------------------------------------------------
                                                                       01/01/98      01/01/97       01/01/96      01/01/95   
                                                                          to            TO             TO            TO      
                                                                       12/31/98      12/31/97       12/31/96      12/31/95   
                                                                     -----------    -----------    -----------   ----------- 
<S>                                                                  <C>            <C>            <C>           <C>         
1. Accumulation unit value at beginning of period ................   $     6.996    $     5.680    $     4.850   $     3.738 
2. Accumulation unit value at end of period ......................         7.559          6.996          5.680         4.850 
3. Number of accumulation units outstanding at end of period .....   122,166,242    136,204,888    142,993,051   134,801,790 
                                                                     --------------------------------------------------------

<CAPTION>
                                                                                        FLEXIBLE MANAGED
                                                                     --------------------------------------------------------
                                                                       01/01/98      01/01/97       01/01/96       01/01/95  
                                                                          to            TO            TO              TO     
                                                                       12/31/98      12/31/97       12/31/96       12/31/95  
                                                                     -----------    -----------    -----------   ----------- 
<S>                                                                  <C>            <C>            <C>           <C>         
1. Accumulation unit value at beginning of period ................   $     4.540    $     3.895    $     3.469   $     2.828 
2. Accumulation unit value at end of period ......................         4.944          4.540          3.895         3.469 
3. Number of accumulation units outstanding at end of period .....   194,529,908    222,907,582    245,530,247   249,259,101 
                                                                     --------------------------------------------------------

<CAPTION>
                                                                                            SUBACCOUNTS
                                                                     -----------------------------------------------------

                                                                                           MONEY MARKET
                                                                     -----------------------------------------------------
                                                                       01/01/94      01/01/93      01/01/92      01/01/91 
                                                                          TO            TO            TO            TO    
                                                                       12/31/94      12/31/93      12/31/92      12/31/91 
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.796   $     1.766   $     1.722   $     1.641
2. Accumulation unit value at end of period ......................         1.847         1.796         1.766         1.722
3. Number of accumulation units outstanding at end of period .....    43,401,237    42,593,593    51,724,305    51,946,977
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                        DIVERSIFIED BOND
                                                                     -----------------------------------------------------
                                                                       01/01/94      01/01/93      01/01/92      01/01/91 
                                                                          TO            TO            TO            TO    
                                                                       12/31/94      12/31/93      12/31/92      12/31/91 
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.541   $     2.335   $     2.204   $     1.916
2. Accumulation unit value at end of period ......................         2.430         2.541         2.335         2.204
3. Number of accumulation units outstanding at end of period .....    39,963,983    41,705,404    34,565,884    26,914,460
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                            EQUITY
                                                                     -----------------------------------------------------
                                                                       01/01/94     01/01/93       01/01/92     01/01/91  
                                                                          TO           TO             TO           TO     
                                                                       12/31/94     12/31/93       12/31/92     12/31/91  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     3.681   $     3.056   $     2.709   $     2.176
2. Accumulation unit value at end of period ......................         3.738         3.681         3.056         2.709
3. Number of accumulation units outstanding at end of period .....   121,654,470   102,491,968    80,457,602    67,197,756
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                       FLEXIBLE MANAGED
                                                                     -----------------------------------------------------
                                                                       01/01/94     01/01/93       01/01/92     01/01/91  
                                                                          TO           TO             TO           TO     
                                                                       12/31/94     12/31/93       12/31/92     12/31/91  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.955   $     2.587   $     2.434   $     1.963
2. Accumulation unit value at end of period ......................         2.828         2.955         2.587         2.434
3. Number of accumulation units outstanding at end of period .....   265,104,376   245,194,868   214,343,734   191,130,125
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                 SUBACCOUNTS
                                                                     ---------------------------------------

                                                                                  MONEY MARKET
                                                                     ---------------------------------------
                                                                      01/01/90      01/01/89      01/01/88
                                                                         TO            TO            TO
                                                                      12/31/90      12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.536   $     1.423   $     1.341
2. Accumulation unit value at end of period ......................         1.641         1.536         1.423
3. Number of accumulation units outstanding at end of period .....    47,904,119    33,934,283    22,782,591
                                                                     ---------------------------------------

<CAPTION>
                                                                                DIVERSIFIED BOND
                                                                     ---------------------------------------
                                                                      01/01/90       01/01/89      01/01/88
                                                                         TO            TO            TO
                                                                      12/31/90       12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.790   $     1.596   $     1.493
2. Accumulation unit value at end of period ......................         1.916         1.790         1.596
3. Number of accumulation units outstanding at end of period .....    23,633,524    22,074,086    19,475,497
                                                                     ---------------------------------------

<CAPTION>
                                                                                      EQUITY
                                                                     ---------------------------------------
                                                                      01/01/90       01/01/89     01/01/88
                                                                         TO             TO           TO
                                                                      12/31/90       12/31/89     12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.323   $     1.812   $     1.567
2. Accumulation unit value at end of period ......................         2.176         2.323         1.812
3. Number of accumulation units outstanding at end of period .....    61,186,048    57,285,028    56,763,669
                                                                     ---------------------------------------

<CAPTION>
                                                                                FLEXIBLE MANAGED
                                                                     ---------------------------------------
                                                                       01/01/90      01/01/89     01/01/88
                                                                          TO            TO           TO
                                                                       12/31/90      12/31/89     12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.950   $     1.621   $     1.453
2. Accumulation unit value at end of period ......................         1.963         1.950         1.621
3. Number of accumulation units outstanding at end of period .....   190,783,212   186,540,213   192,115,646
                                                                     ---------------------------------------
</TABLE>
    
                                                                 25
<PAGE>
   
<TABLE>

                                                      ACCUMULATION UNIT VALUES
                                         THE PRUDENTIAL QUALIFIED VARIABLE CONTRACT ACCOUNT
                                            (CONDENSED FINANCIAL INFORMATION) (CONTINUED)
<CAPTION>
                                                                                           SUBACCOUNTS
                                                                     -----------------------------------------------------

                                                                                    CONSERVATIVE BALANCED
                                                                     -----------------------------------------------------
                                                                       01/01/98      01/01/97     01/01/96      01/01/95  
                                                                          to            TO           T0            TO     
                                                                       12/31/98      12/31/97     12/31/96      12/31/95  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     3.839   $     3.424   $     3.077   $     2.655
2. Accumulation unit value at end of period ......................         4.238         3.839         3.424         3.077
3. Number of accumulation units outstanding at end of period .....   212,050,954   241,343,777   266,987,208   272,339,087
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                        HIGH YIELD BOND
                                                                     -----------------------------------------------------
                                                                       01/01/98     01/01/97      01/01/96      01/01/95  
                                                                          to           TO            TO            TO     
                                                                       12/31/98     12/31/97      12/31/96      12/31/95  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.308   $     2.053   $     1.865   $     1.605
2. Accumulation unit value at end of period ......................         2.227         2.308         2.053         1.865
3. Number of accumulation units outstanding at end of period .....    27,511,819    28,839,212    29,828,106    29,634,193
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                         STOCK INDEX
                                                                     -----------------------------------------------------
                                                                       01/01/98      01/01/97     01/01/96       01/01/95 
                                                                          to            TO           TO             TO    
                                                                       12/31/98      12/31/97     12/31/96       12/31/95 
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     3.816   $     2.907   $     2.401   $     1.772
2. Accumulation unit value at end of period ......................         4.842         3.816         2.907         2.401
3. Number of accumulation units outstanding at end of period .....    89,752,143    89,281,291    83,246,633    69,315,117
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                           EQUITY INCOME
                                                                     -----------------------------------------------------
                                                                       01/01/98      01/01/97      01/01/96     01/01/95  
                                                                          to            TO            TO           TO     
                                                                       12/31/98      12/31/97      12/31/96     12/31/95  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     4.108   $     3.044   $     2.530   $     2.104
2. Accumulation unit value at end of period ......................         3.963         4.108         3.044         2.530
3. Number of accumulation units outstanding at end of period .....    67,240,900    68,401,048    65,617,658    63,810,012
                                                                     -----------------------------------------------------


<CAPTION>

                                                                                         SUBACCOUNTS
                                                                     -----------------------------------------------------

                                                                                     CONSERVATIVE BALANCED
                                                                     -----------------------------------------------------
                                                                       01/01/94      01/01/93     01/01/92       01/01/91 
                                                                          TO            TO           TO             TO    
                                                                       12/31/94      12/31/93     12/31/92       12/31/91 
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.713   $     2.447   $     2.316   $     1.968
2. Accumulation unit value at end of period ......................         2.655         2.713         2.447         2.316
3. Number of accumulation units outstanding at end of period .....   288,743,247   254,782,768   205,054,881   162,911,208
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                         HIGH YIELD BOND
                                                                     -----------------------------------------------------
                                                                       01/01/94      01/01/93     01/01/92      01/01/91  
                                                                          TO            TO           TO            TO     
                                                                       12/31/94      12/31/93     12/31/92      12/31/91  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.670   $     1.417   $     1.220   $     0.887
2. Accumulation unit value at end of period ......................         1.605         1.670         1.417         1.220
3. Number of accumulation units outstanding at end of period .....    29,220,246    26,485,302    16,592,795    10,973,632
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                         STOCK INDEX
                                                                     -----------------------------------------------------
                                                                      01/01/94       01/01/93     01/01/92      01/01/91  
                                                                         TO             TO           TO            TO     
                                                                      12/31/94       12/31/93     12/31/92      12/31/91  
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.776   $     1.639   $     1.548   $     1.208
2. Accumulation unit value at end of period ......................         1.772         1.776         1.639         1.548
3. Number of accumulation units outstanding at end of period .....    62,281,407    60,084,614    44,559,636    25,578,770
                                                                     -----------------------------------------------------

<CAPTION>
                                                                                        EQUITY INCOME
                                                                     -----------------------------------------------------
                                                                      01/01/94      01/01/93      01/01/92       01/01/91 
                                                                         TO            TO            TO            TO     
                                                                      12/31/94      12/31/93      12/31/92       12/31/91 
                                                                     -----------   -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     2.099   $     1.737   $     1.596   $     1.267
2. Accumulation unit value at end of period ......................         2.104         2.099         1.737         1.596
3. Number of accumulation units outstanding at end of period .....    56,103,455    37,355,905    18,299,120     9,795,017
                                                                     -----------------------------------------------------



<CAPTION>

                                                                                 SUBACCOUNTS
                                                                     ---------------------------------------

                                                                            CONSERVATIVE BALANCED
                                                                     ---------------------------------------
                                                                      01/01/90      01/01/89      01/01/88
                                                                         TO            TO            TO
                                                                      12/31/90      12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.892   $     1.637   $     1.503
2. Accumulation unit value at end of period ......................         1.968         1.892         1.637
3. Number of accumulation units outstanding at end of period .....   149,027,248   140,207,386   137,719,157
                                                                     ---------------------------------------

<CAPTION>
                                                                                HIGH YIELD BOND
                                                                     ---------------------------------------
                                                                      01/01/90      01/01/89      01/01/88
                                                                         TO            TO            TO
                                                                      12/31/90      12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.019   $     1.052   $     0.941
2. Accumulation unit value at end of period ......................         0.887         1.019         1.052
3. Number of accumulation units outstanding at end of period .....    10,683,985    13,396,197    10,451,423
                                                                     ---------------------------------------

<CAPTION>
                                                                                 STOCK INDEX
                                                                     ---------------------------------------
                                                                      01/01/90      01/01/89      01/01/88
                                                                         TO            TO            TO
                                                                      12/31/90      12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.268   $     0.980   $     0.859
2. Accumulation unit value at end of period ......................         1.208         1.268         0.980
3. Number of accumulation units outstanding at end of period .....    16,843,644     9,249,076     2,628,467
                                                                     ---------------------------------------

<CAPTION>
                                                                                 EQUITY INCOME
                                                                     ---------------------------------------
                                                                       01/01/90      01/01/89     02/19/88*
                                                                         TO            TO            TO
                                                                       12/31/90      12/31/89      12/31/88
                                                                     -----------   -----------   -----------
<S>                                                                  <C>           <C>           <C>        
1. Accumulation unit value at beginning of period ................   $     1.332   $     1.099   $     1.000
2. Accumulation unit value at end of period ......................         1.267         1.332         1.099
3. Number of accumulation units outstanding at end of period .....     7,313,593     4,663,452     1,002,158
                                                                     ---------------------------------------
    
</TABLE>
                                                                 26
<PAGE>
   
<TABLE>

                                                      ACCUMULATION UNIT VALUES
                                    THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
                                            (CONDENSED FINANCIAL INFORMATION) (CONTINUED)
<CAPTION>

                                                                                              SUBACCOUNTS
                                                                      -------------------------------------------------------------
                                                                                            NATURAL RESOURCES
                                                                      -------------------------------------------------------------
                                                                       01/01/98     01/01/97    01/01/96     01/01/95     01/01/94 
                                                                          to           TO          TO           TO           TO    
                                                                       12/31/98     12/31/97    12/31/96     12/31/95     12/31/94 
                                                                      ----------   ----------------------   ----------   ----------
<S>                                                                   <C>          <C>             <C>      <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    2.481   $    2.840      $2.196   $    1.751   $    1.851
2. Accumulation unit value at end of period ......................         2.032        2.481       2.840        2.196        1.751
3. Number of accumulation units outstanding at end of period .....    19,843,969   26,401,911  26,504,833   23,280,453   22,768,479
                                                                      -------------------------------------------------------------

<CAPTION>
                                                                                                  GLOBAL
                                                                      -------------------------------------------------------------
                                                                       01/01/98     01/01/97     01/01/96    05/01/95*     01/01/94
                                                                          to           TO           TO           TO           TO   
                                                                       12/31/98     12/31/97     12/31/96    12/31/95     12/31/94 
                                                                      ----------   ----------   ----------  ----------   ----------
<S>                                                                   <C>          <C>          <C>         <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    1.917   $    1.814   $    1,533  $    1.339   $    1.425
2. Accumulation unit value at end of period ......................         2.370        1.917        1.814       1.533        1.339
3. Number of accumulation units outstanding at end of period .....    44,432,955   51,481,170   50,862,779  44,920,771   43,407,964
                                                                      -------------------------------------------------------------

<CAPTION>
                                                                                            GOVERNMENT INCOME
                                                                      -------------------------------------------------------------
                                                                       01/01/98     01/01/97     01/01/96    05/01/95*     01/01/94
                                                                          TO           TO           TO          TO           TO    
                                                                       12/31/98     12/31/97     12/31/96    12/31/95     12/31/94 
                                                                      ----------   ----------   ----------  ----------   ----------
<S>                                                                   <C>          <C>          <C>         <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    1.881   $    1.736   $    1.719  $    1.456   $    1.553
2. Accumulation unit value at end of period ......................         2.027        1.881        1.736       1.719        1.456
3. Number of accumulation units outstanding at end of period .....    38,187,837   39,604,005   50,735,981  55,130,988   64,574,144
                                                                      -------------------------------------------------------------

<CAPTION>
                                                                                      PRUDENTIAL JENNISON
                                                                      --------------------------------------------------------------
                                                                       01/01/98     01/01/97     01/01/96    05/01/95*
                                                                          TO           TO           TO           TO
                                                                       12/31/98     12/31/97     12/31/96    12/31/95
                                                                      ----------   ----------   ----------  ----------
<S>                                                                   <C>          <C>          <C>         <C>       
1. Accumulation unit value at beginning of period ................    $    1.832   $    1.408   $    1.245  $    1.009
2. Accumulation unit value at end of period ......................         2.489        1.832        1.408       1.245
3. Number of accumulation units outstanding at end of period .....    50,420,102   34,004,121   21,901,003   5,067,514
                                                                      --------------------------------------------------------------

<CAPTION>
                                                                                   SMALL CAPITALIZATION STOCK
                                                                      --------------------------------------------------------------
                                                                       01/01/98     01/01/97     01/01/96     01/01/95
                                                                          TO           TO           TO           TO
                                                                       12/31/98     12/31/97     12/31/96     12/31/95
                                                                      ----------   ----------   ----------------------
<S>                                                                   <C>          <C>          <C>         <C>       
1. Accumulation unit value at beginning of period ................    $    1.742   $    1.408   $    1.190  $    1.002
2. Accumulation unit value at end of period ......................         1.708        1.742        1.408       1.190
3. Number of accumulation units outstanding at end of period .....    31,702,794   25,991,072   13,432,923   3,599,798
                                                                      --------------------------------------------------------------


<CAPTION>

                                                                                             SUBACCOUNTS
                                                                      --------------------------------------------------------------
                                                                                           NATURAL RESOURCES
                                                                      --------------------------------------------------------------
                                                                       01/01/93     01/01/92     01/01/91     01/01/90     01/01/89 
                                                                          TO           TO           TO           TO           TO    
                                                                       12/31/93     12/31/92     12/31/91     12/31/90     12/31/89 
                                                                      ----------   -----------------------   ----------   ----------
<S>                                                                   <C>          <C>          <C>          <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    1.497   $    1.412   $    1.295   $    1.391   $    1.038
2. Accumulation unit value at end of period ......................         1.851        1.497        1.412        1.295        1.391
3. Number of accumulation units outstanding at end of period .....    14,307,513   10,080,734    9,150,881    8,875,236    2,829,046
                                                                      --------------------------------------------------------------

<CAPTION>
                                                                                            GLOBAL
                                                                      --------------------------------------------------------------
                                                                       01/01/93     01/01/92     01/01/91     01/01/90     01/01/89
                                                                           TO           TO          TO           TO           TO
                                                                       12/31/93     12/31/92     12/31/91     12/31/90     12/31/89
                                                                      ----------   -----------------------   ----------   ----------
<S>                                                                   <C>          <C>          <C>          <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    1.007   $    1.056   $    0.959   $    1.115   $    1.015
2. Accumulation unit value at end of period ......................         1.425        1.007        1.056        0.959        1.115
3. Number of accumulation units outstanding at end of period .....     9,912,122    3,274,619    2,255,700    1,542,929      349,391
                                                                      --------------------------------------------------------------

<CAPTION>
                                                                                             GOVERNMENT INCOME
                                                                    ----------------------------------------------------------------
                                                                       01/01/93     01/01/92     01/01/91     01/01/90     01/01/89
                                                                          TO           TO           TO           TO           TO
                                                                       12/31/93     12/31/92     12/31/91     12/31/90     12/31/89
                                                                      ----------   -----------------------   ----------   ----------
<S>                                                                   <C>          <C>          <C>          <C>          <C>       
1. Accumulation unit value at beginning of period ................    $    1.397   $    1.335   $    1.164   $    1.108   $    1.000
2. Accumulation unit value at end of period ......................         1.553        1.397        1.335        1.164        1.108
3. Number of accumulation units outstanding at end of period .....    66,529,517   41,061,477   10,193,396    3,891,299    1,369,956
                                                                    ----------------------------------------------------------------

<CAPTION>































<CAPTION>

                                                                        SUBACCOUNTS
                                                                      -----------------
                                                                      NATURAL RESOURCES
                                                                      -----------------
                                                                          01/01/88
                                                                             TO
                                                                          12/31/88
                                                                          --------
<S>                                                                       <C>     
1. Accumulation unit value at beginning of period ................        $  1.000
2. Accumulation unit value at end of period ......................           1.038
3. Number of accumulation units outstanding at end of period .....         820,249
                                                                          --------
</TABLE>
    

                                                                 27




<PAGE>
   


STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 1999


INDIVIDUAL VARIABLE ANNUITY CONTRACTS

OF THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT





      The Individual Variable Annuity Contract (the "contract") of The
Prudential Qualified Individual Variable Contract Account (the "account") is a
variable annuity contract issued by The Prudential Insurance Company of America
("Prudential"). The contracts are designed for use in connection with retirement
arrangements that qualify for federal tax benefits under Sections 401, 403(a),
403(b), 408 or 457 of the Internal Revenue Code. Purchase payments made through
payroll deduction or similar arrangements with an employer must be at least $300
during any 12 month period. Any other purchase payment must be at least $50
($100 or $300 under certain forms of the contract).

      This statement of additional information is not a prospectus and should be
read in conjunction with the contract's prospectus, dated May 1, 1999, which is
available without charge upon written request to The Prudential Insurance
Company of America, 751 Broad Street, Newark New Jersey 07102-3777, or by
telephoning (888) PRU-2888.











                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                751 Broad Street
                          Newark, New Jersey 07102-3777
                            Telephone: (888) PRU-2888


QVIP-1B Ed 5-9 9
Catalog # 64M100Y
    
<PAGE>
   
                              CONTENTS
                                                                            PAGE
                                                                            ----
Company.....................................................................   1
Directors and Officers......................................................   1
Further Information Regarding Previously Offered Qualified Variable
   Investment Contracts.....................................................   4
Distribution of the Contract................................................   6
Participation in Divisible Surplus..........................................   6
Performance Information.....................................................   6
Comparative Performance Information.........................................   7
Experts.....................................................................   9
Legal Opinions..............................................................   9
Financial Statements........................................................   9




FINANCIAL STATEMENTS OF THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE
   CONTRACT ACCOUNT......................................................... A-1



CONSOLIDATED FINANCIAL STATEMENTS OF THE PRUDENTIAL INSURANCE COMPANY
   OF AMERICA AND SUBSIDIARIES.............................................. B-1



DETERMINATION OF ACCUMULATION UNIT VALUES AND OF THE AMOUNT OF MONTHLY
   VARIABLE ANNUITY PAYMENTS................................................ C-1
      A. Accumulation Unit Values........................................... C-1
      B. Determination of the Amount of Monthly Variable Annuity Payment.... C-1

    

<PAGE>
   

                                   COMPANY

The Prudential Insurance Company of America ("Prudential") is a mutual insurance
company founded in 1875 under the laws of the state of New Jersey. Prudential is
licensed to sell life insurance and annuities in the District of Columbia, Guam
and in all states.


                                  DIRECTORS

FRANKLIN E. AGNEW--Director since 1994 (current term expires April, 2000).
Member, Committee on Finance & Dividends; Member, Corporate Governance
Committee. Business consultant since 1986. Senior Vice President, H.J. Heinz
from 1971 to 1986. Mr. Agnew is also a director of Bausch & Lomb, Inc. and Erie
Plastics Corporation. Age 64. Address: 600 Grant Street, Suite 660, Pittsburgh,
PA 15219.

FREDERICK K. BECKER--Director since 1994 (current term expires April, 2005).
Member, Auditing Committee; Member, Corporate Governance Committee. President,
Wilentz Goldman and Spitzer, P.A. (law firm) since 1989, with firm since 1960.
Age 63. Address: 90 Woodbridge Center Drive, Woodbridge, NJ 07095.

GILBERT F. CASELLAS--Director since 1998 (current term expires April, 2003).
Member, Compensation Committee. President, The Swarthmore Group, Inc. since
1999. Partner, McConnell Valdes, LLP in 1998. Chairman, U.S. Equal Employment
Opportunity Commission from 1994 to 1998. Age 46. Address: 1646 West Chester
Pike, Suite 3, West Chester, PA 19382.

JAMES G. CULLEN--Director since 1994 (current term expires April, 2001). Member,
Compensation Committee; Member, Committee on Business Ethics. President & Chief
Operating Officer, Bell Atlantic Corporation, since 1998. President & Chief
Executive Officer, Telecom Group, Bell Atlantic Corporation, from 1997 to 1998.
Vice Chairman, Bell Atlantic Corporation from 1995 to 1997. President, Bell
Atlantic Corporation from 1993 to 1995. Mr. Cullen is also a director of Bell
Atlantic Corporation and Johnson & Johnson. Age 56. Address: 1310 North Court
House Road, 11th Floor, Alexandria, VA 22201.

CAROLYNE K. DAVIS--Director since 1989 (current term expires April, 2001).
Member, Committee on Business Ethics; Member, Compensation Committee.
Independent Health Care Advisor since 1997. National and International Health
Care Advisor, Ernst & Young, LLP from 1985 to 1997. Dr. Davis is also a director
of Beckman Coulter Instruments, Inc., Merck & Co., Inc., Minimed Incorporated,
and Beverley Enterprises. Age 67. Address: 751 Broad Street, 23rd Floor, Newark,
NJ 07102.

ROGER A. ENRICO--Director since 1994 (current term expires April, 2002). Member,
Committees on Nominations & Corporate Governance; Member, Compensation
Committee. Chairman and Chief Executive Officer, PepsiCo, Inc. since 1996. Mr.
Enrico originally joined PepsiCo, Inc. in 1971. Mr. Enrico is also a director of
A.H. Belo Corporation and Dayton Hudson Corporation. Age 54. Address: 700
Anderson Hill Road, Purchase, NY 10577.

ALLAN D. GILMOUR--Director since 1995 (current term expires April, 2003).
Member, Investment Committee; Member, Committee on Finance & Dividends. Retired
since 1995. Vice Chairman, Ford Motor Company, from 1993 to 1995. Mr. Gilmour
originally joined Ford in 1960. Mr. Gilmour is also a director of Whirlpool
Corporation, MeidiaOne Group, Inc., AP Automotive Systems, Inc., The Dow
Chemical Company and DTE Energy Company. Age 64. Address: 751 Broad Street, 23rd
Floor, Newark, NJ 07102.

WILLIAM H. GRAY, III--Director since 1991 (current term expires April, 2000).
Chairman, Committees on Nominations & Corporate Governance. Member, Executive
Committee; Member, Committee on Business Ethics. President and Chief Executive
Officer, The College Fund/UNCF since 1991. Mr. Gray served in Congress from 1979
to 1991. Mr. Gray is also a director of Chase Manhattan Corporation, Municipal
Bond Investors Assurance Corporation, Rockwell International Corporation,
Union-Pacific Corporation, Warner-Lambert Company, CBS Corporation, and
Electronic Data Systems. Age 57. Address: 8260 Willow Oaks Corp. Drive, Fairfax,
VA 22031-4511.

JON F. HANSON--Director since 1991 (current term expires April, 2003). Member,
Investment Committee; Member, Committee on Business Ethics. Chairman, Hampshire
Management Company since 1976. Mr. Hanson is also a director of James E. Hanson
Management Company, Neumann Distributors, Inc., Fleet Trust and Investment
Services Company, N.A., United Water Resources, Orange & Rockland Utilities,
Inc., and Consolidated Delivery and Logistics. Age 62. Address: 235 Moore
Street, Suite 200, Hackensack, NJ 07601.

GLEN H. HINER, JR.--Director since 1997 (current term expires April, 2001).
Member, Compensation Committee. Chairman and Chief Executive Officer, Owens
Corning since 1991. Senior Vice President and Group Executive, 


                                       1
    
<PAGE>


   

Plastics Group, General Electric Company from 1983 to 1991. Mr. Hiner is also a
director of Dana Corporation and Owens Corning. Age 64. Address: One Owens
Corning Parkway, Toledo, OH 43659.

CONSTANCE J. HORNER--Director since 1994 (current term expires April, 2002).
Member, Auditing Committee; Member, Committees on Nominations & Corporate
Governance. Guest Scholar, The Brookings Institution since 1993. Ms. Horner is
also a director of Foster Wheeler Corporation, Ingersoll-Rand Company, and
Pfizer, Inc. Age 56. Address: 1775 Massachusetts Ave., N.W. Washington, D.C.
20036-2188.

GAYNOR N. KELLEY--Director since 1997 (current term expires April, 2001).
Member, Auditing Committee. Retired since 1996. Chairman and Chief Executive
Officer, The Perkin Elmer Corporation from 1990 to 1996. Mr. Kelley is also a
director of Hercules Incorporated, and Alliant Techsystems. Age 67. Address: 751
Broad Street, 23rd Floor, Newark, NJ 07102-3777.

BURTON G. MALKIEL--Director since 1978 (current term expires April, 2002).
Chairman, Investment Committee; Member, Executive Committee; Member, Committee
on Finance & Dividends. Professor of Economics, Princeton University, since
1988. Dr. Malkiel is also a director of Banco Bilbao Vizcaya, Baker Fentress &
Company, The Jeffrey Company, The Southern New England Telecommunications
Company, and Vanguard Group, Inc. Age 66. Address: Princeton University, 110
Fisher Hall, Prospect Avenue, Princeton, NJ 08544-1021.

ARTHUR F. RYAN--Chairman of the Board, President and Chief Executive Officer of
Prudential since 1994. President and Chief Operating Officer, Chase Manhattan
Bank from 1990 to 1994, with Chase since 1972. Age 56. Address: 751 Broad
Street, Newark, NJ 07102.

IDA F.S. SCHMERTZ--Director since 1997 (current term expires April, 2004).
Member, Audit Committee. Principal, Investment Strategies International since
1994. Age 64. Address: 751 Broad Street, 23rd Floor, Newark, NJ 07102.

CHARLES R. SITTER--Director since 1995 (current term expires April, 2003).
Member, Committee on Finance & Dividend; Member, Investment Committee. Retired
since 1996. President, Exxon Corporation from 1993 to 1996. Mr. Sitter began his
career with Exxon in 1957. Age 68. Address: 5959 Las Colinas Boulevard, Irving,
TX 75039-2298.

DONALD L. STAHELI--Director since 1995 (current term expires April, 2003).
Member, Compensation Committee; Member, Auditing Committee. Retired since 1996.
Chairman and Chief Executive Officer, Continental Grain Company from 1994 to
1997. President and Chief Executive Officer, Continental Grain Company from 1988
to 1994. Mr. Staheli is also director of Bankers Trust Company, Conti-Financial
Corporation and Continental Grain Company. Age 67 Address: 39 Locust Street,
Suite 204, New Canaan, CT 06840.

RICHARD M. THOMSON--Director since 1976 (current term expires April, 2000).
Chairman, Executive Committee; Chairman, Compensation Committee. Retired since
1998. Chairman of the Board, The Toronto-Dominion Bank from 1997 to 1998.
Chairman and Chief Executive Officer from 1978 to 1997. Mr. Thomson is also a
director of CGC, Inc., INCO, Limited, S.C. Johnson & Son, Inc., The Thomson
Corporation, Canadian Occidental Petroleum, Ltd., The Toronto-Dominion Bank and
Ontario Hydro. Age 64. Address: P.O. Box 1, Toronto-Dominion Centre, Toronto,
Ontario, M5K 1A2, Canada.

JAMES A. UNRUH--Director since 1996 (current term expires April, 2000). Member,
Committees on Nominations & Corporate Governance; Member, Investment Committee.
Retired since 1997. Chairman and Chief Executive Officer, Unisys Corporation,
from 1990 to 1997. Mr. Unruh is also a director of Ameritech Corporation and
Moss Micro. Age 57. Address: 751 Broad Street, Newark, NJ 07102-3777

P. ROY VAGELOS, M.D.--Director since 1989 (current term expires April, 2001).
Chairman, Auditing Committee; Member, Executive Committee; Member, Committees on
Nominations & Corporate Governance. Chairman, Regeneron Pharmaceuticals since
1995. Chairman, Advanced Medicines, Inc. since 1997. Chairman, Chief Executive
Officer and President, Merck & Co., Inc. from 1986 to 1995, Dr. Vagelos
originally joined Merck in 1975 Dr. Vagelos is also a director of The Estee
Lauder Companies, Inc. and PepsiCo., Inc. Age 69. Address: One Crossroads Drive,
Building A, 3rd Floor, Bedminster, NJ 07921.

STANLEY C. VAN NESS--Director since 1990 (current term expires April, 2002).
Chairman, Committee on Business Ethics; Member, Executive Committee; Member,
Auditing Committee. Partner, Herbert, Van Ness, Cayci & Goodell (law firm) since
1998. Counselor at Law, Picco Herbert Kennedy (law firm) from 1990 to 1998. Mr.
Van Ness is also a director of Jersey Central Power & Light Company. Age 64.
Address: 22 Chambers Street, Princeton, NJ 08542.

PAUL A. VOLCKER--Director since 1988 (current term expires April, 2000).
Chairman, Committee on Finance & Dividends; Member, Executive Committee; Member,
Committee on Nominations & Corporate Governance. Consultant since 1997.
Chairman, Wolfensohn & Co., Inc. 1988 to 1996 Chairman, James D. Wolfensohn,
Inc. 1988 to 1996. Chief Executive Officer, James D. Wolfensohn, Inc. from 1995
to 1996. Mr. Volcker is also a director Nestle, S.A.,


                                       2
    
<PAGE>



   

and Bankers Trust New York Corporation as well as a Director of the Board of
Overseers of TIAA-CREF. Age 71, Address: 610 Fifth Avenue, Suite 420, New York,
NY 10020.

JOSEPH H. WILLIAMS--Director since 1994 (current term expires April, 2002).
Member, Committee on Finance & Dividends; Member, Investment Committee.
Director, The Williams Companies since 1979. Chairman & Chief Executive Officer,
The Williams Companies from 1979 to 1993. Mr. Williams is also a director of The
Orvis Company, MTC Investors, LLC., and AEA Investors, Inc. Age 65. Address: One
Williams Center, Tulsa, OK 74102.

                               PRINCIPAL OFFICERS

ARTHUR F. RYAN--Chairman of the Board, President and Chief Executive Officer
since 1994; prior to 1994, President and Chief Operating Officer, Chase
Manhattan Corporation. Age 56.

E. MICHAEL CAULFIELD--Executive Vice President, Financial Management since 1998;
Chief Executive Officer, Prudential Investments from 1995 to 1998; Chief
Executive Officer, Money Management Group in 1995; prior to 1995, President,
Prudential Preferred Financial Services. Age 52.

MICHELE S. DARLING--Executive Vice President, Human Resources since 1997; prior
to 1997, Executive Vice President, Canadian Imperial Bank of Commerce. Age 45.

ROBERT C. GOLDEN--Executive Vice President, Operations and Systems since 1997;
prior to 1997, Executive Vice President, Prudential Securities. Age 53.

MARK B. GRIER--Executive Vice President, Corporate Governance, since 1998;
Executive Vice President, Financial Management from 1997 to 1998; Chief
Financial Officer from 1995 to 1997; prior to 1995, Executive Vice President,
Chase Manhattan Corporation. Age 46.

JEAN D. HAMILTON--Executive Vice President, Institutional, since 1998;
President, Diversified Group since 1995 to 1998; prior to 1995, President,
Prudential Capital Group. Age 52.

RODGER A. LAWSON--Executive Vice President, International Investments & Global
Marketing, since 1998; Executive Vice President, Marketing and Planning from
1996 to 1998; President and CEO, Van Eck Global, from 1994 to 1996; prior to
1994, President and CEO, Global Private Banking, Bankers Trust Company. Age 52.

KIYOFUMI SAKAGUCHI--Executive Vice President, International Insurance, since
1998; President, International Insurance Group from 1995 to 1998; prior to 1995,
Chairman and CEO, The Prudential Life Insurance Co., Ltd. Age 56.

JOHN V. SCICUTELLA--Executive Vice President, Individual Financial Services,
since 1998; Chief Executive Officer, Individual Insurance Group from 1997 to
1998; Executive Vice President Operations and Systems from 1995 to 1997; prior
to 1995, Executive Vice President, Chase Manhattan Corporation. Age 49.

JOHN R. STRANGFELD--Executive Vice President, Global Asset Management, since
1998; Chief Executive Officer, Private Asset Management Group (PAMG) from 1996
to 1998; President, PAMG, from 1994 to 1996; prior to 1994, Senior Managing
Director. Age 45.

JAMES J. AVERY, JR.--Senior Vice President & Chief Actuary, Individual Insurance
Group since 1997; President Prudential Select from 1996 to 1997; prior to 1995,
Executive Vice President and Chief Operating Officer, Prudential Select. Age 47.

MARTIN A. BERKOWITZ--Senior Vice President, Financial Management, since 1998;
Senior Vice President and Comptroller from 1995 to 1998; prior to 1995, Senior
Vice President and CFO, Prudential Investment Corporation. Age 50.

WILLIAM M. BETHKE--Senior Vice President and Chief Investment Officer since
1997; prior to 1997, President, Capital Management Group. Age 51.

ANNE E. BOSSI--Senior Vice President, Institutional, since 1998; President,
Group Life & Disability 1997 to 1998; President, Group Life Insurance 1995 to
1997; prior to 1995, President, Northeastern Group Operations. Age 47

RICHARD J. CARBONE--Senior Vice President and Chief Financial Officer since
1997. Controller, Salomon Brothers from 1995 to 1997; prior to 1995, Controller,
Bankers Trust. Age 51.

THOMAS J. CARROLL--Senior Vice President and Chief Auditor since 1999. Managing
Director, Bankers Trust Company from 1996 to 1998; prior to 1996, Global Chief
Auditor and Managing Director, Credit Suisse First Boston. Age 57.


                                       3
    
<PAGE>



   

THOMAS W. CRAWFORD--Senior Vice President, Individual Financial Services, since
1998; President and Chief Executive Officer, Prudential Property & Casualty
Company from 1996 to 1998; Vice President, Prudential Property & Casualty
Company in 1996; prior to 1996, President & CEO, Southern Heritage Insurance
Company. Age 55.

WILLIAM D. FRIEL--Senior Vice President and Chief Information Officer since
1996; prior to 1996, Chief Executive Officer, Prudential Service Company. Age
60.

MICHAEL J. HINES--Senior Vice President, Marketing and Communications, since
1999; 1996 to 1998 Vice President, Marketing and Communications. Age 47.

RONALD P. JOELSON--Senior Vice President, Financial Management, since 1999.
Senior Vice President, Guaranteed Products from 1996 to 1999; Vice President,
Guaranteed Investments during 1996; prior to 1996, Managing Director, Retirement
Services. Age 40.

IRA J. KLEINMAN--Senior Vice President, International Insurance, since 1997;
prior to 1997, Chief Marketing & Product Development Officer. Age 51.

KATHLEEN KRALL--Senior Vice President, Individual Financial Services, since
1999; Vice President, Individual Financial Services from 1996 to 1999; Vice
President, Operations and Systems from 1995 to 1996; prior to 1995 Vice
President, Chase Manhattan Bank. Age 41.

JOYCE R. LEIBOWITZ--Senior Vice President, Management Internal Controls, since
1999; Vice President, Management Internal Controls from 1995 to 1999; prior to
1995 Integrated Control Officer. Age 51.

JOHN M. LIFTIN--Senior Vice President and General Counsel since 1998;
Self-employed from 1997 to 1998; prior to 1997 Senior Vice President and General
Counsel, Kidder & Peabody Group, Inc. Age 55.

NEIL A. MCGUINNESS--Senior Vice President, Individual Financial Services, since
1996; Director, Putnam Investments, in 1996; prior to 1996, President, Fidelity
Investment Employer Services Company. Age 52.

PRISCILLA A. MYERS--Senior Vice President, Demutualization, since 1998; Senior
Vice President and Auditor from 1995 to 1998; prior to 1995, Vice President and
Auditor. Age 48.

I. EDWARD PRICE--Senior Vice President, Individual Financial Services, since
1996; Senior Vice President and Actuary from 1995 to 1996; prior to 1995, Chief
Executive Officer, Prudential International Insurance. Age 56.

ROBERT J. SULLIVAN--Senior Vice President, Individual Financial Services, since
1997; prior to 1997, Managing Director, Fidelity Investments. Age 60.

SUSAN J. BLOUNT--Vice President and Secretary since 1995; prior to 1995,
Assistant General Counsel. Age 41.

C. EDWARD CHAPLIN--Vice President and Treasurer since 1995; prior to 1995,
Managing Director and Assistant Treasurer. Age 41.

ANTHONY S. PISZEL--Vice President and Controller since 1998; Vice President,
Enterprise Financial Management from 1997 to 1998; prior to 1997, Chief
Financial Officer, Individual Insurance Group. Age 44.

               FURTHER INFORMATION REGARDING PREVIOUSLY OFFERED
                   INDIVIDUAL VARIABLE INVESTMENT CONTRACTS

ANNUITY OPTIONS UNDER THE WVA-83 AND QVIP-84 CONTRACTS

If you own a WVA-83 contract or a QVIP-84 contract, the following provisions of
this section apply to you. You have considerable flexibility in selecting an
annuity: (1) you may select either a fixed-dollar or variable annuity (a
variable annuity is not available under Other Annuity Options described in item
5 below) or both; (2) you may select more than one annuity option; (3) if you
select a variable annuity, you may apply the value of your variable account to
only one or to two or more subaccounts, and not necessarily the same subaccount
distribution as you used before selecting an annuity. However, the initial
minimum monthly payment amount will be applicable to each payee, each annuity,
and each subaccount selected.

If you are covered under a tax-deferred annuity subject to Section 403(b) of the
Code and do not elect to effect an annuity before the date described in the
endorsement to your contract with respect to pre-1987 benefit accruals, a
variable life annuity with 120 payments certain will be purchased for you on the
first day of the month following such date. If any tax-deferred annuity
contractowner (with respect to post-1986 benefit accruals) or any other
contractowner has not elected to purchase an annuity before the end of his tax
year in which such election is required by or for the retirement arrangement
under which he is covered, a variable life annuity with 120 payments certain,
payable as described in item 2 below, will be purchased for him on the first day
of the month preceding the end of such tax year, 


                                       4
    
<PAGE>

   

unless a joint and survivor annuity payout is required by ERISA, in which case a
variable joint and survivor annuity, payable as described in item 3 below, will
be purchased for him.

Except as provided in the Annuity Certain Option described in item 4 below, and
under certain forms of annuity available under the Other Annuity Option
described in item 5 below, once annuity payments begin, the annuitant cannot
surrender the annuity benefit and receive a one-sum payment instead of regular
annuity payments. However, as described under TRANSFERS in the prospectus, if a
variable annuity is selected, the annuitant may transfer the annuity funds
between subaccounts up to four times each contract year.

Additionally, an annuitant who is receiving a variable annuity may convert all
or a part of the variable annuity to a fixed-dollar annuity, provided: (1) the
fixed-dollar annuity is the same form of annuity as the variable annuity and has
the same certain or specified period as remained under the variable annuity on
the conversion date, (2) the present value on the conversion date of the
variable annuity, or portion of the variable annuity to be converted, calculated
in accordance with the contract, must produce a monthly payment of at least $20
under the fixed-dollar annuity, and (3) if only a portion of the variable
annuity is converted, the annuity units remaining in the unconverted portion
must be sufficient to produce a monthly payment on the conversion date of at
least $20.

After annuity payments begin, conversion may not be made from a fixed-dollar
annuity to a variable annuity.

The forms of annuity from which you may select are listed below. Under each, (1)
variable annuity payments can be expected to vary from month to month according
to the investment experience of the portfolio or portfolios in which your
variable account is invested, or (2) fixed-dollar annuity payments will be in
monthly installments of a guaranteed amount. For the reason explained on page
C-1 of this statement of additional information, if the assets of the subaccount
which you have selected do not earn an investment return of 4.7% a year, the
amount of payments under a variable annuity will decrease; conversely, if the
assets of the subaccount(s) which you have selected earn an investment return of
more than 4.7% a year, variable annuity payments will increase. If you choose to
convert your variable account into an annuity, but fail to select one or more of
the annuity options, we will provide the annuitant with a variable life annuity
with 120 payments certain.

1. LIFE ANNUITY. Payments will be made to the annuitant monthly during his or
her lifetime and will end with the last monthly payment before his or her death.
Should the annuitant die within a few years after payments begin, total payments
received will probably be substantially less than the value of your variable
account when annuity payments first began, and as little as one payment could be
received under this form of annuity.

2. LIFE ANNUITY WITH 120 PAYMENTS (10 YEARS) CERTAIN. Payments will be made to
the annuitant monthly during his or her lifetime. If the annuitant dies before
the 120th monthly payment is due, monthly annuity payments do not continue to
the beneficiary designated by the annuitant unless he or she chooses to do so.
Instead, the discounted value of the remaining unpaid installments, to and
including the 120th monthly payment, is payable to the beneficiary in one sum.
In calculating the discounted value of the unpaid future payments, we will
discount each such payment at an interest rate of 3.5% a year. The monthly
payments under this form of annuity will be slightly lower than those payable
under the life annuity described above.

3. JOINT AND SURVIVOR LIFE ANNUITY. Payments will be made to the annuitant
monthly during his or her lifetime and, if the annuitant's spouse is living at
the time of the annuitant's death, to the spouse until his or her death. The
monthly payments to the spouse will be equal to those that would have been
received by the annuitant if he or she had survived unless a different amount is
required by applicable law or regulation or by the terms of a plan, including
joint and 50% spouse survivor annuity. Monthly payments under this form of
annuity will be less than the payments under either of the forms described
above.

4. ANNUITY CERTAIN. Payments will be made to the annuitant monthly for a period
of 60, 120, 180 or 240 months. During this period, the annuitant may elect to
receive a lump sum payment in lieu of the remaining monthly payments or to
receive a partial lump sum payment with reduced monthly payments thereafter. Any
partial lump sum payment must be $300 or more. Also, the initial reduced monthly
payment must equal to or exceed $20. If the annuitant dies during the
annuity-certain period, monthly payments will not continue to the beneficiary
you designate unless you so select. Instead, the beneficiary will receive a lump
sum payment. The amount of the lump sum payment (or partial lump sum payment) is
determined by discounting each remaining unpaid monthly payment (or the amount
by which each remaining monthly payment is reduced as a result of a partial lump
sum payment) at an interest rate of 3.5% a year. This will be paid to the
annuitant or the annuitant's beneficiary, whichever is applicable.

5. OTHER ANNUITY OPTIONS. You may choose to receive the proceeds of your
contract fund in the form of payments like those of any annuity or life annuity
offered at your annuity date. Under the Annuity Certain Option (Option 5 above),
Prudential will waive withdrawal charges that might be applicable under Options
1-4. Further, if you select Option 1, 2, 3 or 4 without a right of withdrawal,
Prudential will effect that option under the Other Annuity Option if doing so
provides greater monthly payments.


                                       5
    
<PAGE>


   
DIFFERENCES UNDER THE WVQ-83 CONTRACT

The descriptions of The Prudential Qualified Individual Variable Annuity
Contract in the prospectus generally apply to the VIP-86 contract (currently
offered for sale), the QVIP-84 contract and the WVQ-83 contract. Although
differences among the three forms of contract have been described, additional
differences between the earlier WVQ-83 contract and the two later forms of the
contract are set forth below.

 1. SALES CHARGES ON WITHDRAWALS . . . Under the WVQ-83 contract, any amount
    that you withdraw will be treated, for the purpose of determining the sales
    charge, as a withdrawal of purchase payments, rather than investment income,
    until you have withdrawn your total purchase payments. There will be no
    sales charge on amounts withdrawn after all purchase payments have been
    withdrawn. For sales charge purposes, purchase payments are deemed to be
    withdrawn on a first-in, first-out basis. The amount of the sales charge
    will depend on the amount withdrawn and the number of contract years that
    have elapsed since you made the particular purchase payments deemed to be
    withdrawn. The 10% free withdrawal privilege will be applied toward the
    total amount withdrawn.

 2. DETERMINATION OF MINIMUM AMOUNT PAYABLE TO A BENEFICIARY . . . Under the
    WVQ-83 contract, the minimum amount payable to the beneficiary (due to the
    death of the annuitant prior to age 65 and before the annuity date) will be
    equal to the total amount of purchase payment you have made, less any
    withdrawals (i.e., there is no proportional reduction of the minimum amount
    as is the case under the QVIP-84 contract and the VIP-86 contract).

 3. MODIFICATION OF SENTENCE ON PAGE C-1 OF THE STATEMENT OF ADDITIONAL
    INFORMATION . . . The second sentence in the next to last paragraph under
    section B, Determination of the Amount of Monthly Variable Annuity Payment,
    as it applies to the WVQ-83 Contract, is modified to read: "For example, for
    a person of 65 years of age who has selected a lifetime annuity with a
    guaranteed minimum of 120 payments, the applicable schedules currently
    provide that 1,000 Annuity Units will result in the payment each month of an
    amount equal to the value of 5.73 Annuity Units."

 4. DETERMINATION OF AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS . . . Under
    the WVQ-83 contract, the amount of each monthly variable annuity payment
    made on the first day of the month will be equal to the Annuity Units
    (determined as described on page C-1 of the statement of additional
    information) multiplied by the Annuity Unit Value at the end of that day, if
    a business day, or otherwise at the end of the last preceding business day.

                         DISTRIBUTION OF THE CONTRACT

Currently, Pruco Securities Corporation ("Prusec"), a wholly-owned subsidiary of
Prudential which was organized in 1971 under New Jersey law, acts as the
distributor of the contract. Prudential expects that sometime during 1999,
Prusec's responsibilities as distributor will be assigned to Prudential
Investment Management Services LLC ("PIMS"). PIMS, is also a wholly-owned
subsidiary of Prudential and is a limited liability corporation organized under
Delaware law in 1996. PIMS will act as principal underwriter under substantially
the same terms as Prusec currently does. Both Prusec and PIMS are registered as
broker-dealers under the Securities Exchange Act of 1934 and are members of the
National Association of Securities Dealer, Inc. The principal business address
of both Prusec and PIMS is 751 Broad Street, Newark, New Jersey 07102-3777.

The contract is currently sold by registered representatives of the distributor
and may also be sold through other broker-dealers authorized by the distributor.
This includes broker-dealers otherwise unaffiliated with Prudential. Registered
representatives of such other unaffiliated broker-dealers may be paid on a
different basis than registered representatives of the distributor or
broker-dealers affiliated with Prudential. The maximum commission that will be
paid to a broker-dealer to cover both the individual representative's commission
and other distribution expenses will not exceed 6% of the purchase payment. In
addition, trail commissions based on the size of the contract fund may be paid.

                      PARTICIPATION IN DIVISIBLE SURPLUS

A mutual life insurance company, such as Prudential, differs from a stock life
insurance company in that it has no stockholders who are the owners of the
enterprise. Every owner of a Prudential contract participates in the divisible
surplus of Prudential, according to an annual determination of Prudential's
Board of Directors of the portion, if any, of the divisible surplus of the
entire company that is attributable to the class of contracts of which he or she
is an owner. Before annuity payments begin it is unlikely that any dividends
will be payable to the owners of the contracts described in the prospectus
because the charges made by Prudential are not expected to exceed its actual
expenses in distributing and administering the contracts. However, there may be
dividends payable during the annuity income period.


                                       6
    
<PAGE>


   

                           PERFORMANCE INFORMATION

The tables that follow provide performance information for each subaccount
through December 31, 1998 The performance information is based on historical
experience and does not indicate or represent future performance.

AVERAGE ANNUAL TOTAL RETURN

TABLE 1 below shows the average annual rates of total return on hypothetical
investments of $1,000 for periods ended December 31, 1998 in each subaccount
other than the Money Market Subaccount. These figures assume withdrawal of the
investments at the end of the period other than to effect an annuity under the
contract.


                                   TABLE 1


                         AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>

                                                                              FROM DATE
                                                                             SUBACCOUNT
                                             ONE YEAR  FIVE YEARS TEN YEARS  ESTABLISHED
                                    DATE       ENDED      ENDED     ENDED      THROUGH
         SUBACCOUNT              ESTABLISHED 12/31/98   12/31/98  12/31/98    12/31/98
        ------------             ----------- --------   --------  --------    --------
<S>                                 <C>       <C>       <C>       <C>          <C> 
DIVERSIFIED BOND..................   6/83     -0.67      5.28      7.63         8.02
GOVERNMENT INCOME.................   5/89      1.23      4.76       N/A         7.36
CONSERVATIVE BALANCED.............   6/83      3.87      8.70      9.78         9.51
FLEXIBLE MANAGED..................   5/83      2.38     10.24     11.61        10.62
HIGH YIELD BOND...................   2/87     -9.88      5.23      7.55         6.75
STOCK INDEX.......................  10/87     20.48     21.79     17.14        17.24
EQUITY INCOME.....................   2/88     -9.90     13.01     13.50        13.36
EQUITY............................   6/83      1.50     14.97     15.18        13.70
PRUDENTIAL JENNISON...............   5/95     29.49       N/A       N/A        27.25
SMALL CAPITALIZATION STOCK........   5/95     -8.40       N/A       N/A        14.80
GLOBAL............................   5/89     17.16     10.09       N/A         8.96
NATURAL RESOURCES.................   5/88    -23.53      1.11      6.76         6.81
</TABLE>


The average annual rates of total return shown above are computed by finding the
average annual compounded rates of return over the periods shown that would
equate the initial amount invested to the withdrawal value, in accordance with
the following formula: P(1+T)- ERA. In the formula, P is a hypothetical
investment of $1,000; T is the average annual total return; is the number of
years; and ERA is the withdrawal value at the end of the periods shown. These
figures assume deduction of the maximum deferred sales charge that may be
applicable to a particular period. The annual contract fee is included, however
it applies only if the contract fund is less than $10,000.


                                       7
    
<PAGE>




   

NON-STANDARD TOTAL RETURN
TABLE 2 below shows the average annual rates of return as in Table 1, but
assumes that the investments are not withdrawn at the end of the period or that
the contractowner annuitizes at the end of the period.


                                   TABLE 2

              AVERAGE ANNUAL TOTAL RETURN ASSUMING NO WITHDRAWAL
<TABLE>
<CAPTION>

                                                                              FROM DATE
                                                                             SUBACCOUNT
                                             ONE YEAR  FIVE YEARS TEN YEARS  ESTABLISHED
                                    DATE       ENDED      ENDED     ENDED      THROUGH
         SUBACCOUNT              ESTABLISHED 12/31/98   12/31/98  12/31/98    12/31/98
         ----------              ----------- --------   --------  --------    --------
<S>                                 <C>       <C>       <C>       <C>          <C> 
DIVERSIFIED BOND..................   6/83      5.59      5.70      7.63         8.02
GOVERNMENT INCOME.................   5/89      7.48      5.19       N/A         7.36
CONSERVATIVE BALANCED.............   6/83     10.10      9.06      9.78         9.51
FLEXIBLE MANAGED..................   5/83      8.61     10.58     11.61        10.62
HIGH YIELD BOND...................   2/87     -3.82      5.65      7.55         6.75
STOCK INDEX.......................  10/87     26.59     21.98     17.14        17.24
EQUITY INCOME.....................   2/88     -3.84     13.31     13.50        13.36
EQUITY............................   6/83      7.74     15.24     15.18        13.70
PRUDENTIAL JENNISON...............   5/95     35.54       N/A       N/A        27.68
SMALL CAPITALIZATION STOCK........   5/95     -2.24       N/A       N/A        15.42
GLOBAL............................   5/89     23.30     10.43       N/A         8.96
NATURAL RESOURCES.................   5/88    -18.39      1.62      6.76         6.81
</TABLE>


TABLE 3 shows the cumulative total return for the subaccounts, assuming no
withdrawal.


                                   TABLE 3

                CUMULATIVE TOTAL RETURN ASSUMING NO WITHDRAWAL
<TABLE>
<CAPTION>

                                                                              FROM DATE
                                                                             SUBACCOUNT
                                             ONE YEAR  FIVE YEARS TEN YEARS  ESTABLISHED
                                    DATE       ENDED      ENDED     ENDED      THROUGH
         SUBACCOUNT              ESTABLISHED 12/31/98   12/31/98  12/31/98    12/31/98
        ------------             ----------- --------   --------  --------    --------
<S>                                 <C>       <C>       <C>      <C>         <C>   
DIVERSIFIED BOND..................   6/83      5.59      31.96    108.64      232.35
GOVERNMENT INCOME.................   5/89      7.48      28.77       N/A       98.69
CONSERVATIVE BALANCED.............   6/83     10.10      54.30    154.16      311.91
FLEXIBLE MANAGED..................   5/83      8.61      65.36    199.96      382.66
HIGH YIELD BOND...................   2/87     -3.82      31.64    107.10      116.99
STOCK INDEX.......................  10/87      26.59    170.10    386.37      494.06
EQUITY INCOME.....................   2/88     -3.84      86.79    254.83      290.57
EQUITY............................   6/83      7.74     103.27    310.77      638.43
PRUDENTIAL JENNISON...............   5/95     35.54        N/A       N/A      145.07
SMALL CAPITALIZATION STOCK........   5/95     -2.24        N/A       N/A       69.26
GLOBAL............................   5/89     23.30      64.25       N/A      129.28
NATURAL RESOURCES.................   5/88    -18.39       8.37     92.31      101.91
</TABLE>



                                       8
    
<PAGE>


   

MONEY MARKET SUBACCOUNT YIELD

The "yield" and "effective yield" of the Money Market Subaccount for the seven
days ended December 31, 1998 were 3.62% and 3.68, respectively. 

The yield is computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance of
one accumulation unit of the Money Market Subaccount at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from Contract
owner accounts, and dividing the difference by the value of the subaccount at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7), with the resulting figure carried
to the nearest ten-thousandth of 1%.

The deduction referred to above consists of the 1% charge for mortality and
expense risks and the 0.20% charge for administration. It does not reflect the
deferred sales charge. It does reflect the annual contract fee, however it will
only be charged if the Contract Fund is less than $10,000.

The effective yield is obtained by taking the base period return, adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result, according to the following formula: Effective Yield--((base period
return + 1) 365/7)--1.

The yields on amounts held in the Money Market Subaccount will fluctuate on a
daily basis. Therefore, the stated yields for any given period are not an
indication of future yields.

COMPARISONS

Reports or advertising may include comparative performance information,
including, but not limited to: (1) comparisons to market indices such as the Dow
Jones Industrial Average, the Standard & Poor's 500 Index, the Value Line
Composite Index, the Russell 2000 Index, the Morgan Stanley World Index, the
Lehman Brothers bond indices; (2) comparisons to other investments, such as
certificates of deposit; (3) performance rankings assigned by services such as
Morningstar, Inc. and Variable Annuity Research and Data Services (VARDS), and
Lipper Analytical Services, Inc.; (4) data presented by analysts such as Dow
Jones, A.M. Best, The Bank Rate Monitor National Index; and (5) data in
publications such as The Wall Street Journal, Times, Forbes, Barrons, Fortune,
Money Magazine, and Financial World.
    
                                   EXPERTS


   
The consolidated financial statements of Prudential and Subsidiaries as of
December 31, 1998 and 1997 and for each of the three years in the period ended
December 31, 1998 and financial statements of the Account as of December 31,
1998 and for each of the two years in the period then ended included in this
statement of additional information, have been so included in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP's principal business address is 1177 Avenue of the
Americas, New York, New York 10036.
    

                                LEGAL OPINIONS


Shea & Gardner of Washington, D.C., has provided advice on certain matters
relating to the federal securities laws in connection with the contract.

                             FINANCIAL STATEMENTS

The consolidated financial statements of Prudential and Subsidiaries included
herein should be distinguished from the financial statements of the Account, and
should be considered only as bearing upon the ability of Prudential to meet its
obligations under the contracts.



                                       9

<PAGE>

 
<TABLE>

                                               FINANCIAL STATEMENTS OF THE PRUDENTIAL
                                           QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF NET ASSETS
December 31, 1998

<CAPTION>
                                                                                     SUBACCOUNTS
                                                    --------------------------------------------------------------------------------

                                                       MONEY         DIVERSIFIED                        FLEXIBLE        CONSERVATIVE
                                                        MARKET          BOND            EQUITY           MANAGED          BALANCED
                                                      PORTFOLIO       PORTFOLIO        PORTFOLIO        PORTFOLIO        PORTFOLIO
                                                    ------------     ------------     ------------     ------------     ------------
<S>                                                 <C>              <C>              <C>              <C>              <C>
ASSETS
 Investment in The Prudential Series Fund, Inc.
  Portfolios, at net asset value [Note 3] .....     $ 91,908,764     $109,460,618     $923,420,414     $961,847,295     $898,650,738
 Receivable from The Prudential Insurance
  Company of America [Note 2] .................            3,250            7,888                0           11,386          106,895
                                                    ------------     ------------     ------------     ------------     ------------
 Net Assets ...................................     $ 91,912,014     $109,468,506     $923,420,414     $961,858,681     $898,757,633
                                                    ============     ============     ============     ============     ============

NET ASSETS, representing:
 Equity of contract owners ....................     $ 91,908,764     $109,460,618     $923,420,414     $961,847,295     $898,650,738
 Equity of annuitants [Note 2] ................            3,250            7,888                0           11,386          106,895
                                                    ------------     ------------     ------------     ------------     ------------
                                                    $ 91,912,014     $109,468,506     $923,420,414     $961,858,681     $898,757,633
                                                    ============     ============     ============     ============     ============

                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A1
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                                       SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------

    HIGH                                                                                                                  SMALL
    YIELD            STOCK          EQUITY           NATURAL                         GOVERNMENT        PRUDENTIAL     CAPITALIZATION
    BOND             INDEX          INCOME          RESOURCES         GLOBAL           INCOME           JENNISON          STOCK
  PORTFOLIO        PORTFOLIO       PORTFOLIO        PORTFOLIO        PORTFOLIO        PORTFOLIO         PORTFOLIO        PORTFOLIO
- -------------    -------------   -------------    -------------    -------------    -------------     -------------    -------------


<S>              <C>             <C>              <C>              <C>              <C>               <C>              <C>
$  61,261,669    $ 434,613,085   $ 266,462,910    $  40,322,150    $ 105,287,886    $  77,420,493     $ 125,473,448    $  54,140,764

            0                0               0                0                0                0                 0                0
- -------------    -------------   -------------    -------------    -------------    -------------     -------------    -------------
$  61,261,669    $ 434,613,085   $ 266,462,910    $  40,322,150    $ 105,287,886    $  77,420,493     $ 125,473,448    $  54,140,764
=============    =============   =============    =============    =============    =============     =============    =============


$  61,261,669    $ 434,613,085   $ 266,462,910    $  40,322,150    $ 105,287,886    $  77,420,493     $ 125,473,448    $  54,140,764
            0                0               0                0                0                0                 0                0
- -------------    -------------   -------------    -------------    -------------    -------------     -------------    -------------
$  61,261,669    $ 434,613,085   $ 266,462,910    $  40,322,150    $ 105,287,886    $  77,420,493     $ 125,473,448    $  54,140,764
=============    =============   =============    =============    =============    =============     =============    =============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A2
</TABLE>
<PAGE>
<TABLE>

                                               FINANCIAL STATEMENTS OF THE PRUDENTIAL
                                           QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF OPERATIONS
For the year ended December 31, 1998

<CAPTION>
                                                                                 SUBACCOUNTS
                                             ---------------------------------------------------------------------------------------

                                                  MONEY         DIVERSIFIED                            FLEXIBLE        CONSERVATIVE
                                                 MARKET            BOND             EQUITY             MANAGED          BALANCED
                                               PORTFOLIO         PORTFOLIO         PORTFOLIO          PORTFOLIO         PORTFOLIO
                                             -------------     -------------     -------------      -------------      -------------
<S>                                          <C>               <C>               <C>                <C>                <C>
INVESTMENT INCOME
 Dividend income .....................       $   4,589,340     $   6,669,887     $  17,454,853      $  31,875,072      $  38,321,965
                                             -------------     -------------     -------------      -------------      -------------
EXPENSES
 Charges to contract owners
  for assuming mortality risk and
  expense risk [Note 5A] .............           1,043,373         1,299,790        11,542,032         11,823,696         10,904,381
                                             -------------     -------------     -------------      -------------      -------------
NET INVESTMENT INCOME (LOSS) .........           3,545,967         5,370,097         5,912,821         20,051,376         27,417,584
                                             -------------     -------------     -------------      -------------      -------------
NET REALIZED AND UNREALIZED
 GAIN (LOSS) ON INVESTMENTS
  Capital gains distributions received                   0           396,981       101,863,900         98,762,284         53,408,819
  Realized gain (loss) on shares
   redeemed ..........................                   0           306,757        39,343,642         16,536,785          9,947,763
  Net change in unrealized gain (loss)
   on investments ....................                   0           146,776       (72,205,407)       (49,354,872)           166,871
                                             -------------     -------------     -------------      -------------      -------------
NET GAIN (LOSS) ON INVESTMENTS .......                   0           850,514        69,002,135         65,944,197         63,523,453
                                             -------------     -------------     -------------      -------------      -------------
NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS ..........................       $   3,545,967     $   6,220,611     $  74,914,956      $  85,995,573      $  90,941,037
                                             =============     =============     =============      =============      =============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                       SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------

    HIGH                                                                                                                  SMALL
    YIELD            STOCK           EQUITY            NATURAL                         GOVERNMENT      PRUDENTIAL     CAPITALIZATION
    BOND             INDEX           INCOME           RESOURCES         GLOBAL           INCOME         JENNISON          STOCK
  PORTFOLIO        PORTFOLIO        PORTFOLIO         PORTFOLIO        PORTFOLIO        PORTFOLIO       PORTFOLIO        PORTFOLIO
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------
<S>             <C>              <C>               <C>              <C>             <C>             <C>              <C>
$  6,273,280      $  4,763,918     $  7,576,674      $    428,160     $  1,353,226    $  4,321,930    $    196,885     $    306,647
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------




     796,277         4,610,574        3,473,081           625,279        1,204,147         898,462       1,080,157          607,989
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------
   5,477,003           153,344        4,103,593          (197,119)         149,079       3,423,468        (883,272)        (301,342)
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------


           0         6,652,420       16,581,485         2,893,218        4,418,940               0       1,841,662        3,319,291

    (159,739)        9,889,661        4,094,389        (2,075,232)       4,088,322         397,895         313,054           33,186

  (7,558,861)       74,701,443      (36,267,579)      (10,231,060)      12,842,721       1,717,447      27,217,490       (4,686,726)
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------
  (7,718,600)       91,243,524      (15,591,705)       (9,413,074)      21,349,983       2,115,342      29,372,206       (1,334,249)
- ------------      ------------     ------------      ------------     ------------    ------------    ------------     ------------


$ (2,241,597)     $ 91,396,868     $(11,488,112)     $ (9,610,193)    $ 21,499,062    $  5,538,810    $ 28,488,934     $ (1,635,591)
============      ============     ============      ============     ============    ============    ============     ============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A4
</TABLE>

<PAGE>
<TABLE>

                                               FINANCIAL STATEMENTS OF THE PRUDENTIAL
                                           QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1998 and 1997

<CAPTION>
                                                                               SUBACCOUNTS
                                         ------------------------------------------------------------------------------------------

                                                 MONEY MARKET                 DIVERSIFIED BOND                  EQUITY
                                                   PORTFOLIO                     PORTFOLIO                     PORTFOLIO
                                         ----------------------------   ----------------------------   ----------------------------
                                             1998            1997           1998           1997           1998            1997
                                         -------------  -------------   -------------  -------------   -------------  -------------
<S>                                      <C>            <C>             <C>            <C>             <C>            <C>
OPERATIONS
 Net investment income (loss) .......... $   3,545,967  $   4,029,523   $   5,370,097  $   6,741,105   $   5,912,821  $  10,081,951
 Capital gains distributions received ..             0              0         396,981      1,281,608     101,863,900     51,646,191
 Realized gain (loss) on shares redeemed             0              0         306,757        442,346      39,343,642     20,901,819
 Net change in unrealized gain (loss)
  on investments .......................             0              0         146,776       (719,252)    (72,205,407)   104,089,968
                                         -------------  -------------   -------------  -------------   -------------  -------------

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS ............................     3,545,967      4,029,523       6,220,611      7,745,807      74,914,956    186,719,929
                                         -------------  -------------   -------------  -------------   -------------  -------------

ANNUITY PAYMENTS AND
 OTHER OPERATING TRANSFERS
 Contract Owner Net Payments ...........     7,486,174     10,990,988       6,344,093      5,862,238      46,914,429     58,657,217
 Annuity Payments ......................          (544)          (540)         (1,152)        (1,116)        (22,037)       (21,494)
 Surrenders, Withdrawals
  and Death Benefits ...................   (20,229,299)   (21,067,761)    (15,282,170)   (14,370,705)   (134,412,424)  (103,851,662)
 Net Transfers From (To) Other
  Subaccounts or Fixed Rate Options ....    13,069,309     (8,506,500)      3,298,352     (5,196,435)    (15,332,940)       186,285
 Administrative and Other Charges ......       (76,358)       (91,724)        (94,053)      (115,397)       (843,428)      (926,399)
                                         -------------  -------------   -------------  -------------   -------------  -------------
TOTAL ANNUITY PAYMENTS AND
 OTHER OPERATING TRANSFERS .............       249,282    (18,675,537)     (5,734,930)   (13,821,415)   (103,696,400)   (45,956,053)

NET INCREASE (DECREASE) IN NET
 ASSETS RETAINED IN THE ACCOUNT
 [Note 7] ..............................      (529,614)       203,802        (194,868)       390,770        (722,621)    (1,007,029)
                                         -------------  -------------   -------------  -------------   -------------  -------------

TOTAL INCREASE (DECREASE) IN
 NET ASSETS ............................     3,265,635    (14,442,212)        290,813     (5,684,838)    (29,504,065)   139,756,847

NET ASSETS
 Beginning of year .....................    88,646,379    103,088,591     109,177,693    114,862,531     952,924,479    813,167,632
                                         -------------  -------------   -------------  -------------   -------------  -------------
 End of year ........................... $  91,912,014  $  88,646,379   $ 109,468,506  $ 109,177,693   $ 923,420,414  $ 952,924,479
                                         =============  =============   =============  =============   =============  =============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A5
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                                       SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------

      FLEXIBLE MANAGED                   CONSERVATIVE BALANCED               HIGH YIELD BOND                     STOCK INDEX
          PORTFOLIO                            PORTFOLIO                        PORTFOLIO                         PORTFOLIO
- --------------------------------      ----------------------------      ---------------------------     ---------------------------
      1998             1997                1998           1997             1998            1997             1998           1997
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------

<S>               <C>                 <C>             <C>               <C>            <C>              <C>            <C>
$    20,051,376   $   18,206,589      $  27,417,584   $ 31,764,166      $  5,477,003   $  5,348,213     $    153,344   $    970,500
     98,762,284      153,465,362         53,408,819    100,449,018                 0              0        6,652,420      9,466,636
     16,536,785       20,572,745          9,947,763     13,781,187          (159,739)        72,721        9,889,661      3,836,378

    (49,354,872)     (38,310,295)           166,871    (39,385,264)       (7,558,861)     2,192,224       74,701,443     64,776,170
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------



     85,995,573      153,934,401         90,941,037    106,609,107        (2,241,597)     7,613,158       91,396,868     79,049,684
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------



     39,130,225       49,824,976         33,812,711     45,684,119         3,960,643      3,763,166       26,668,520     27,962,220
         (2,266)          (2,111)           (15,764)       (14,767)                0              0                0              0

   (149,422,147)    (130,676,366)      (130,545,685)   120,476,315)       (9,250,924)    (8,153,956)     (44,608,635)   (31,257,264)

    (24,134,801)     (15,933,359)       (20,780,383)   (18,275,790)        2,276,993      2,166,876       20,819,131     23,278,721
       (934,671)      (1,104,303)          (693,557)      (826,337)          (49,947)       (55,294)        (312,324)      (271,803)
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------

   (135,363,660)     (97,891,163)      (118,222,678)   (93,909,090)       (3,063,235)    (2,279,208)       2,566,692     19,711,874



     (4,244,029)      (1,023,697)        (1,642,222)        (1,000)          (21,233)      (176,656)        (357,938)      (880,518)
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------


    (53,612,116)      55,019,541        (28,923,863)    12,699,017        (5,326,065)     5,157,294       93,605,622     97,881,040


  1,015,470,797      960,451,256        927,681,496    914,982,479        66,587,734     61,430,440      341,007,463    243,126,423
- ---------------   --------------      -------------   ------------      ------------   ------------     ------------   ------------
$   961,858,681   $1,015,470,797      $ 898,757,633   $927,681,496      $ 61,261,669   $ 66,587,734     $434,613,085   $341,007,463
===============   ==============      =============   ============      ============   ============     ============   ============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A6
</TABLE>
<PAGE>

<TABLE>

                                               FINANCIAL STATEMENTS OF THE PRUDENTIAL
                                           QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1998 and 1997

<CAPTION>
                                                                            SUBACCOUNTS (CONTINUED)
                                          ------------------------------------------------------------------------------------------

                                                 EQUITY INCOME                NATURAL RESOURCES                    GLOBAL
                                                   PORTFOLIO                      PORTFOLIO                       PORTFOLIO
                                          ---------------------------    ---------------------------    ---------------------------
                                             1998           1997             1998           1997            1998           1997
                                          ------------   ------------    ------------   ------------    ------------   ------------
<S>                                       <C>            <C>             <C>            <C>             <C>            <C>
OPERATIONS
 Net investment income (loss) ..........  $  4,103,593   $  3,445,129    $   (197,119)  $   (540,402)   $    149,079   $     11,757
 Capital gains distributions received ..    16,581,485     25,262,802       2,893,218      8,396,574       4,418,940      4,713,287
 Realized gain (loss) on shares redeemed     4,094,389      1,814,272      (2,075,232)     1,365,162       4,088,322      1,459,266
 Net change in unrealized gain (loss)
  on investments .......................   (36,267,579)    40,948,076     (10,231,060)   (18,726,364)     12,842,721       (961,981)
                                          ------------   ------------    ------------   ------------    ------------   ------------

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS ............................   (11,488,112)    71,470,279      (9,610,193)    (9,505,030)     21,499,062      5,222,329
                                          ------------   ------------    ------------   ------------    ------------   ------------

ANNUITY PAYMENTS
 AND OTHER OPERATING TRANSFERS
  Contract Owner Net Payments ..........    21,202,089     17,789,866       3,321,987      8,000,090       6,945,265      9,745,717
  Annuity Payments .....................             0              0               0              0               0              0
  Surrenders, Withdrawals
   and Death Benefits ..................   (35,204,151)   (23,882,445)     (7,063,274)    (9,050,752)    (12,260,440)   (10,641,562)
  Net Transfers From (To) Other
   Subaccounts or Fixed Rate Options ...    10,996,576     16,113,684     (11,796,165)       916,021      (9,312,804)     2,224,474
  Administrative and Other Charges .....      (210,155)      (198,719)        (66,165)       (80,032)       (102,802)      (109,164)
                                          ------------   ------------    ------------   ------------    ------------   ------------
TOTAL ANNUITY PAYMENTS
 AND OTHER OPERATING TRANSFERS .........    (3,215,641)     9,822,386     (15,603,617)      (214,673)    (14,730,781)     1,219,465

NET INCREASE (DECREASE) IN NET
 ASSETS RETAINED IN THE ACCOUNT
 [Note 7] ..............................      (111,197)       198,852         (26,908)      (614,926)       (219,134)      (112,280)
                                          ------------   ------------    ------------   ------------    ------------   ------------

TOTAL INCREASE (DECREASE) IN
 NET ASSETS ............................   (14,814,950)    81,491,517     (25,240,718)   (10,334,629)      6,549,147      6,329,514

NET ASSETS
 Beginning of year .....................   281,277,860    199,786,343      65,562,868     75,897,497      98,738,739     92,409,225
                                          ------------   ------------    ------------   ------------    ------------   ------------
 End of year ...........................  $266,462,910   $281,277,860    $ 40,322,150   $ 65,562,868    $105,287,886   $ 98,738,739
                                          ============   ============    ============   ============    ============   ============


                                     SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                                 A7
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                          SUBACCOUNTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------

      GOVERNMENT INCOME                     PRUDENTIAL JENNISON            SMALL CAPITALIZATION STOCK
          PORTFOLIO                              PORTFOLIO                          PORTFOLIO
- -------------------------------      -------------------------------       -------------------------------
    1998               1997              1998               1997              1998               1997
- ------------       ------------      ------------       ------------       ------------       ------------

<S>                <C>                <C>               <C>                 <C>               <C>
$  3,423,468       $  4,043,725       $  (883,272)      $   (448,285)       $  (301,342)      $   (161,726)
           0                  0         1,841,662          3,515,075          3,319,291          3,056,348
     397,895             43,960           313,054            121,331             33,186             80,931

   1,717,447          2,028,538        27,217,490          8,270,011         (4,686,726)         3,628,907
- ------------       ------------      ------------       ------------       ------------       ------------



   5,538,810          6,116,223        28,488,934         11,458,132         (1,635,591)         6,604,460
- ------------       ------------      ------------       ------------       ------------       ------------


   2,795,927          2,877,055        15,796,256         11,269,475          8,492,629          8,062,707
           0                  0                 0                  0                  0                  0

  (9,266,485)       (10,752,082)       (8,774,689)        (4,338,217)        (4,824,181)        (2,644,900)

   3,930,203        (11,681,296)       27,765,230         13,150,606          6,862,345         14,370,063
     (57,046)           (76,335)         (109,733)           (68,656)           (68,589)           (41,414)
- ------------       ------------      ------------       ------------       ------------       ------------

  (2,597,401)       (19,632,658)       34,677,064         20,013,208         10,462,204         19,746,456



    (168,531)        (1,117,084)         (116,687)          (411,931)          (357,481)            12,656
- ------------       ------------      ------------       ------------       ------------       ------------


   2,772,878        (14,633,519)       63,049,311         31,059,409          8,469,132         26,363,572


  74,647,615         89,281,134        62,424,137         31,364,728         45,671,632         19,308,060
- ------------       ------------      ------------       ------------       ------------       ------------
$ 77,420,493       $ 74,647,615      $125,473,448       $ 62,424,137       $ 54,140,764       $ 45,671,632
============       ============      ============       ============       ============       ============


                         SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A13.

                                                     A8
</TABLE>
<PAGE>

                        NOTES TO FINANCIAL STATEMENTS OF
          THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
                                DECEMBER 31, 1998

NOTE 1: GENERAL

        The Prudential Qualified Individual Variable Contract Account (the
        "Account") of The Prudential Insurance Company of America ("Prudential")
        was established on October 12, 1982 by a resolution of Prudential's
        Board of Directors, in conformity with insurance laws of the State of
        New Jersey. The assets of the Account are segregated from Prudential's
        other assets.

        The Account is registered under the Investment Company Act of 1940, as
        amended, as a unit investment trust. The Account is a funding vehicle
        for individual variable annuity contracts. There are thirteen
        subaccounts within the Account, each of which invests only in a
        corresponding portfolio of The Prudential Series Fund, Inc. (the "Series
        Fund"). The Series Fund is a diversified open-end management investment
        company, and is managed by Prudential.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

        The accompanying financial statements are prepared in conformity with
        generally accepted accounting principles ("GAAP"). The preparation of
        the financial statements in conformity with GAAP requires management to
        make estimates and assumptions that affect the reported amounts and
        disclosures. Actual results could differ from those estimates.

        Investments--The investments in shares of the Series Fund are stated at
        the net asset value of the respective portfolio.

        Security Transactions--Realized gains and losses on security
        transactions are reported on an average cost basis. Purchase and sale
        transactions are recorded as of the trade date of the security being
        purchased or sold.

        Distributions Received--Dividend and capital gain distributions received
        are reinvested in additional shares of the Series Fund and are recorded
        on the ex-dividend date.

        Equity of Annuitants--Equity of annuitants represents reserve for
        amounts currently payable to certain contract owners and is estimated
        using the following factors: the 1983 A Mortality Table, the investment
        results of annuitants' subaccounts, an assumed investment result of 3.5%
        and various valuation interest rates ranging from 6.5% to 11%, depending
        on the contract's year of issue.

        Receivable from The Prudential Insurance Company of America--The
        receivable represents amounts due from Prudential to fund Annuitant
        reserves.


                                       A9
<PAGE>


NOTE 3: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS

        The net asset value per share (rounded) for each portfolio of the Series
        Fund, the number of shares of each portfolio held by the subaccounts of
        the Account and the aggregate cost of investments in such shares at
        December 31, 1998 were as follows:

<TABLE>
<CAPTION>
                                                                                     PORTFOLIOS
                                                  -------------------------------------------------------------------------------

                                                    MONEY         DIVERSIFIED                        FLEXIBLE        CONSERVATIVE
                                                   MARKET            BOND            EQUITY           MANAGED          BALANCED
                                                  -----------     ------------     ------------     ------------     ------------
        <S>                                       <C>             <C>              <C>              <C>              <C>
        Number of shares:                           9,190,876        9,895,935       31,157,898       58,079,901       59,590,012
        Net asset value per share (rounded):      $     10.00     $      11.06     $      29.64     $      16.56     $      15.08
        Cost:                                     $91,908,764     $107,936,792     $699,500,273     $927,075,641     $857,911,544


<CAPTION>

                                                                             PORTFOLIOS (CONTINUED)
                                                  -------------------------------------------------------------------------------

                                                  HIGH YIELD         STOCK           EQUITY           NATURAL
                                                    BOND             INDEX           INCOME          RESOURCES          GLOBAL
                                                  -----------     ------------     ------------     ------------     ------------
        <S>                                       <C>             <C>              <C>              <C>              <C>
        Number of shares:                           8,499,240       11,515,980       13,301,517        3,364,817        4,976,529
        Net asset value per share (rounded):      $      7.21     $      37.74     $      20.03      $     11.98      $     21.16
        Cost:                                     $68,307,362     $209,466,600     $226,146,545      $53,763,746      $76,031,309


<CAPTION>

                                                           PORTFOLIOS (CONTINUED)
                                                  ---------------------------------------------

                                                                                      SMALL
                                                  GOVERNMENT       PRUDENTIAL      CAPITALIZATION
                                                    INCOME          JENNISON           STOCK
                                                  -----------      -----------      -----------
        <S>                                       <C>             <C>              <C>
        Number of shares:                           6,522,032        5,248,429        3,680,386
        Net asset value per share (rounded):      $     11.87      $     23.91      $     14.71
        Cost:                                     $74,144,043      $87,299,692      $53,553,641
</TABLE>

NOTE 4: CONTRACT OWNER UNIT INFORMATION

        Outstanding contract owner units, unit values and total value of
        contract owner equity at December 31, 1998 were as follows:

<TABLE>
<CAPTION>
                                                                                     SUBACCOUNTS
                                                     ----------------------------------------------------------------------------


                                                         MONEY       DIVERSIFIED                      FLEXIBLE      CONSERVATIVE
                                                         MARKET         BOND           EQUITY          MANAGED        BALANCED
                                                       PORTFOLIO      PORTFOLIO       PORTFOLIO       PORTFOLIO       PORTFOLIO
                                                     ------------    ------------    ------------    ------------    ------------
       <S>                                           <C>             <C>             <C>             <C>             <C>
       Contract Owner Units Outstanding .......        42,185,333      32,226,526     122,166,242     194,529,908     212,050,954
       Unit Value .............................      $    2.17869    $    3.39660    $    7.55872    $    4.94447    $    4.23790
                                                     ------------    ------------    ------------    ------------    ------------
       TOTAL CONTRACT OWNER EQUITY ............      $ 91,908,764    $109,460,618    $923,420,414    $961,847,295    $898,650,738
                                                     ============    ============    ============    ============    ============

<CAPTION>
                                                                              SUBACCOUNTS (CONTINUED)
                                                     ----------------------------------------------------------------------------

                                                        HIGH
                                                       YIELD            STOCK          EQUITY           NATURAL
                                                        BOND            INDEX          INCOME          RESOURCES       GLOBAL
                                                      PORTFOLIO       PORTFOLIO       PORTFOLIO        PORTFOLIO      PORTFOLIO
                                                     ------------    ------------    ------------    ------------    ------------
       <S>                                           <C>             <C>             <C>             <C>             <C>
       Contract Owner Units Outstanding .......        27,511,819      89,752,143      67,240,900      19,843,969      44,432,955
       Unit Value .............................      $    2.22674    $    4.84237    $    3.96281    $    2.03196    $    2.36959
                                                     ------------    ------------    ------------    ------------    ------------
       TOTAL CONTRACT OWNER EQUITY ............      $ 61,261,669    $434,613,085    $266,462,910    $ 40,322,150    $105,287,886
                                                     ============    ============    ============    ============    ============

<CAPTION>
                                                                 SUBACCOUNTS (CONTINUED)
                                                     ---------------------------------------------

                                                                                        SMALL
                                                     GOVERNMENT       PRUDENTIAL    CAPITALIZATION
                                                       INCOME          JENNISON         STOCK
                                                      PORTFOLIO       PORTFOLIO       PORTFOLIO
                                                     ------------    ------------    ------------
       <S>                                           <C>             <C>             <C>
       Contract Owner Units Outstanding .......        38,187,837      50,420,102      31,702,794
       Unit Value .............................      $    2.02736    $    2.48856    $    1.70776
                                                     ------------    ------------    ------------
       TOTAL CONTRACT OWNER EQUITY ............      $ 77,420,493    $125,473,448    $ 54,140,764
                                                     ============    ============    ============
</TABLE>

                                               A10
<PAGE>


NOTE 5: CHARGES AND EXPENSES

     A. Mortality Risk and Expense Risk Charges

        The mortality risk and expense risk charges, at effective annual rates
        of 0.8% and 0.4%, respectively (for a total of 1.2% per year), are
        applied daily against the net assets representing equity of contract
        owners and annuitants held in each subaccount. Mortality risk is that
        annuitants may live longer than estimated and expense risk is that the
        cost of issuing and administering the contracts may exceed related
        charges by Prudential.

     B. Deferred Sales Charges

        A deferred sales charge is imposed upon withdrawals of certain purchase
        payments to compensate Prudential for sales and other marketing
        expenses. The amount of any sales charge will depend on the amount
        withdrawn and the number of contract years that have elapsed since the
        contract owner or annuitant made the purchase payments deemed to be
        withdrawn. No sales charge is made against the withdrawal of investment
        income. A reduced sales charge is imposed in connection with the
        withdrawal of a purchase payment to effect an annuity if three or more
        contract years have elapsed since the contract date, unless the annuity
        effected is an annuity certain. No sales charge is imposed upon death
        benefit payments or upon transfers made between subaccounts.

     C. Annual Maintenance Charge

        An annual maintenance charge of $30 will be deducted if and only if the
        contract fund is less than $10,000 on a contract anniversary or at the
        time a full withdrawal is effected, including a withdrawal to effect an
        annuity. The charge is made by reducing accumulation units credited to a
        contract owner's account.

NOTE 6: TAXES

        Prudential is taxed as a "life insurance company" as defined by the
        Internal Revenue Code and the results of operations of the Account form
        a part of Prudential's consolidated federal tax return. Under current
        federal law, no federal income taxes are payable by the Account. As
        such, no provision for tax liability has been recorded in these
        financial statements.

                                      A11

<PAGE>


NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT

        The increase (decrease) in net assets retained in the account represents
        the net contributions (withdrawals) of Prudential to (from) the Account.
        Effective October 13, 1998 Prudential no longer maintains a position in
        the account. Previously, Prudential maintained a position in the Account
        for liquidity purposes including unit purchases and redemptions, fund
        share transactions and expense processing.

NOTE 8: UNIT ACTIVITY

        Transactions in units (including transfers among subaccounts) for the
        years ended December 31, 1998 and 1997 were as follows:

<TABLE>
<CAPTION>
                                                                         SUBACCOUNTS
                                  -------------------------------------------------------------------------------------- 

                                             MONEY                      DIVERSIFIED
                                            MARKET                         BOND                       EQUITY
                                           PORTFOLIO                     PORTFOLIO                   PORTFOLIO
                                  --------------------------     -------------------------    -------------------------- 
                                      1998           1997           1998           1997          1998            1997
                                  -----------    -----------     ----------     ----------    -----------    ----------- 
<S>                               <C>           <C>             <C>            <C>           <C>            <C>       

        Contract Owner
         Contributions ........    35,548,937     35,191,348      5,849,709      4,259,556     11,426,524     16,724,805
        
        Contract Owner
         Redemptions ..........   (35,491,263)   (44,076,528)    (7,593,809)    (8,657,580)   (25,465,170)   (23,295,870)
        
<CAPTION>
                                                                   SUBACCOUNTS (CONTINUED)
                                  -------------------------------------------------------------------------------------- 

                                            FLEXIBLE                     CONSERVATIVE                HIGH YIELD
                                             MANAGED                       BALANCED                     BOND
                                            PORTFOLIO                     PORTFOLIO                   PORTFOLIO
                                  --------------------------     -------------------------    -------------------------- 
                                      1998           1997           1998           1997          1998            1997
                                  -----------    -----------     ----------     ----------    -----------    ----------- 
<S>                                <C>           <C>             <C>            <C>           <C>            <C>       

        Contract Owner ........
         Contributions ........    12,543,433     17,415,277     13,943,004     19,501,115      6,806,528      7,088,747
        
        Contract Owner
         Redemptions ..........   (40,921,107)   (39,856,394)   (43,235,827)   (44,796,100)    (8,133,921)    (8,018,827)
        
<CAPTION>
                                                                   SUBACCOUNTS (CONTINUED)
                                  -------------------------------------------------------------------------------------- 

                                             STOCK                       EQUITY                       NATURAL
                                             INDEX                       INCOME                      RESOURCES
                                           PORTFOLIO                    PORTFOLIO                    PORTFOLIO
                                  --------------------------     -------------------------    -------------------------- 
                                      1998           1997           1998           1997          1998            1997
                                  -----------    -----------     ----------     ----------    -----------    ----------- 
<S>                               <C>           <C>             <C>            <C>           <C>            <C>       
       Contract Owner
         Contributions ......      18,520,236     22,493,122     13,720,902     13,310,352      3,228,513      8,354,860
        
        Contract Owner
         Redemptions ........     (18,049,384)   (16,326,246)   (14,881,050)   (10,485,669)    (9,786,455)    (8,419,777)
        
<CAPTION>
                                                                   SUBACCOUNTS (CONTINUED)
                                  -------------------------------------------------------------------------------------- 

                                                                         GOVERNMENT                   PRUDENTIAL
                                             GLOBAL                       INCOME                      JENNISON
                                           PORTFOLIO                     PORTFOLIO                    PORTFOLIO
                                  --------------------------     -------------------------    -------------------------- 
                                      1998           1997           1998           1997          1998            1997
                                  -----------    -----------     ----------     ----------    -----------    ----------- 
<S>                                 <C>           <C>             <C>            <C>           <C>            <C>       
        Contract Owner
         Contributions ......       6,883,365     13,454,213      8,386,092      3,621,535     26,942,750     19,398,287
        
        Contract Owner
         Redemptions ........     (13,931,580)   (12,650,288)    (9,802,260)   (14,672,785)   (10,526,769)    (7,265,302)
        
<CAPTION>
                                    SUBACCOUNTS (CONTINUED)
                                  -------------------------- 

                                             SMALL
                                        CAPITALIZATION
                                        STOCK PORTFOLIO
                                  -------------------------- 
                                      1998           1997    
                                  -----------    ----------- 
<S>                                <C>            <C>       
        Contract Owner
         Contributions ........    14,556,317     18,837,625
        
        Contract Owner
         Redemptions ..........    (8,844,595)    (6,269,621)

</TABLE>

                                      A12

<PAGE>


NOTE 9: PURCHASES AND SALES OF INVESTMENTS

        The aggregate costs of purchases and proceeds from sales of investments
        in the Series Fund for the year ended December 31, 1998 were as follows:

<TABLE>
<CAPTION>
                                                                 PORTFOLIOS
                             ---------------------------------------------------------------------------------

                                 MONEY         DIVERSIFIED                         FLEXIBLE      CONSERVATIVE
                                 MARKET           BOND             EQUITY          MANAGED          BALANCED
                             -------------    -------------    -------------    -------------    -------------
<S>                          <C>              <C>              <C>              <C>              <C>          
        Purchases ........   $  30,476,887    $   5,372,986    $   4,142,000    $      64,000    $     153,786
        Sales ............   $ (31,803,842)   $ (12,613,174)   $(117,579,974)   $(151,506,771)   $(131,029,961)
                             -------------    -------------    -------------    -------------    -------------

<CAPTION>
                                                  PORTFOLIOS (CONTINUED)
                             ---------------------------------------------------------------------------------

                               HIGH YIELD         STOCK            EQUITY          NATURAL
                                  BOND            INDEX            INCOME         RESOURCES          GLOBAL
                             -------------    -------------    -------------    -------------    -------------
<S>                          <C>              <C>              <C>              <C>              <C>          
        Purchases ........   $   5,094,472    $  18,614,669    $  13,737,550    $      79,618    $     878,259
        Sales ............   $  (8,972,504)   $ (21,016,489)   $ (20,537,468)   $ (16,335,422)   $ (17,032,322)
                             -------------    -------------    -------------    -------------    -------------

<CAPTION>
                                         PORTFOLIOS (CONTINUED)
                             --------------------------------------------

                                                                   SMALL
                               GOVERNMENT      PRUDENTIAL      CAPITALIZATION
                                 INCOME         JENNISON           STOCK
                             -------------    -------------    -------------
<S>                          <C>              <C>              <C>          
        Purchases ........   $   6,037,392    $  35,273,170    $  12,229,546
        Sales ............   $  (9,701,785)   $  (1,792,950)   $  (2,732,812)
                             -------------    -------------    -------------
</TABLE>

                                      A13

<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Contract Owners of the
Prudential Qualified Individual Variable Contract Account
and the Board of Directors of
The Prudential Insurance Company of America

In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of the subaccounts (Money Market
Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed
Portfolio, Conservative Balanced Portfolio, High Yield Bond Portfolio, Stock
Index Portfolio, Equity Income Portfolio, Natural Resources Portfolio, Global
Portfolio, Government Income Portfolio, Prudential Jennison Portfolio and Small
Capitalization Stock Portfolio) of the Prudential Qualified Individual Variable
Contract Account at December 31, 1998, the results of each of their operations
for the year then ended and the changes in each of their net assets for each of
the two years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of The
Prudential Insurance Company of America's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of fund shares owned at December 31, 1998,
provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP
New York, New York
March 19, 1999


                                      A14

<PAGE>





      THE PRUDENTIAL INSURANCE
      COMPANY OF AMERICA


      CONSOLIDATED FINANCIAL STATEMENTS AND
      REPORT OF INDEPENDENT ACCOUNTANTS
      DECEMBER 31, 1998 AND 1997



















<PAGE>




                           REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Policyholders of
The Prudential Insurance Company of America

In our opinion, the accompanying consolidated statements of financial position
and the related consolidated statements of operations, of changes in equity and
of cash flows present fairly, in all material respects, the financial position
of The Prudential Insurance Company of America and its subsidiaries at December
31, 1998 and 1997, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1998 in conformity with
generally accepted accounting principles. 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 audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.






/s/ PricewaterhouseCoopers LLP
New York, New York
February 26, 1999

                                       2
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
DECEMBER 31, 1998 AND 1997 (IN MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                          1998             1997
                                                                                                          ----             ----
<S>                                                                                                    <C>               <C> 
ASSETS
  Fixed maturities:
     Available for sale, at  fair value (amortized cost, 1998: $76,997; 1997: $71,496)                $  80,158         $  75,270
     Held to maturity, at amortized cost (fair value, 1998: $17,906; 1997: $19,894)                      16,848            18,700
  Trading account assets, at fair value                                                                   8,888             6,347
  Equity securities, available for sale, at fair value (cost, 1998: $2,583; 1997: $2,376)                 2,759             2,810
  Mortgage loans on real estate                                                                          16,495            16,004
  Investment real estate                                                                                    801             1,519
  Policy loans                                                                                            7,476             7,034
  Securities purchased under agreements to resell                                                        10,252             8,661
  Cash collateral for borrowed securities                                                                 5,622             5,047
  Other long-term investments                                                                             2,658             2,489
  Short-term investments                                                                                  9,781            12,106
                                                                                                      ---------         ---------
     Total investments                                                                                  161,738           155,987

  Cash                                                                                                    1,943             1,859
  Accrued investment income                                                                               1,795             1,909
  Broker-dealer related receivables                                                                      10,142             8,442
  Deferred policy acquisition costs                                                                       6,462             6,083
  Other assets                                                                                           15,721            11,452
  Separate Account assets                                                                                81,621            73,839
                                                                                                      ---------         ---------
TOTAL ASSETS                                                                                          $ 279,422         $ 259,571
                                                                                                      =========         =========
LIABILITIES AND EQUITY

LIABILITIES
  Future policy benefits                                                                               $ 69,129          $ 67,367
  Policyholders' account balances                                                                        30,974            33,246
  Unpaid claims and claim adjustment expenses                                                             3,860             4,864
  Policyholders' dividends                                                                                1,444             1,269
  Securities sold under agreements to repurchase                                                         21,486            12,347
  Cash collateral for loaned securities                                                                   7,132            14,117
  Income taxes payable                                                                                      785               500
  Broker-dealer related payables                                                                          6,530             3,338
  Securities sold but not yet purchased                                                                   5,771             3,648
  Other liabilities                                                                                      16,169            14,659
  Short-term debt                                                                                        10,082             6,774
  Long-term debt                                                                                          4,734             4,273
  Separate Account liabilities                                                                           80,931            73,451
                                                                                                      ---------         ---------
           Total liabilities                                                                            259,027           239,853
                                                                                                      ---------         ---------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 16)
EQUITY
  Accumulated other comprehensive income                                                                  1,232             1,661
  Retained earnings                                                                                      19,163            18,057
                                                                                                      ---------         ---------
            Total equity                                                                                 20,395            19,718
                                                                                                      ---------         ---------
TOTAL LIABILITIES AND EQUITY                                                                          $ 279,422         $ 259,571
                                                                                                      =========         =========

</TABLE>

                    SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                           3


<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (IN MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                              1998        1997        1996
                                                              ----        ----        ----
<S>                                                         <C>         <C>         <C>
REVENUES
  Premiums                                                  $  9,024    $  9,005    $  9,999
  Policy charges and fee income                                1,462       1,434       1,490
  Net investment income                                        9,520       9,456       9,461
  Realized investment gains, net                               2,630       2,168       1,128
  Commissions and other income                                 4,451       4,481       4,512
                                                            --------    --------    --------
           Total revenues                                     27,087      26,544      26,590
                                                            --------    --------    --------
BENEFITS AND EXPENSES
  Policyholders' benefits                                      9,976      10,076      11,094
  Interest credited to policyholders' account balances         1,806       2,044       2,251
  Dividends to policyholders                                   2,478       2,422       2,339
  General and administrative expenses                          9,720       8,992       8,956
  Sales practices remedies                                       510       1,640         410
                                                            --------    --------    --------
           Total benefits and expenses                        24,490      25,174      25,050
                                                            --------    --------    --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES          2,597       1,370       1,540
                                                            --------    --------    --------
  Income taxes
    Current                                                    1,185         101         556
    Deferred                                                    (215)        306        (376)
                                                            --------    --------    --------
                                                                 970         407         180
                                                            --------    --------    --------
INCOME FROM CONTINUING OPERATIONS                              1,627         963       1,360
                                                            --------    --------    --------
DISCONTINUED OPERATIONS
  Loss from Healthcare operations, net of taxes                 (298)       (353)       (282)
  Loss on disposal of Healthcare operations, net of taxes       (223)       --          --
                                                            --------    --------    --------
    Net loss from discontinued operations                       (521)       (353)       (282)
                                                            --------    --------    --------
NET INCOME                                                  $  1,106    $    610    $  1,078
                                                            ========    ========    ========

</TABLE>


                    SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                           4


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (IN MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                             ACCUMULATED OTHER COMPREHENSIVE INCOME
                                                     ------------------------------------------------------
                                                       FOREIGN        NET                      TOTAL
                                                      CURRENCY     UNREALIZED   PENSION   ACCUMULATED OTHER
                                                     TRANSLATION   INVESTMENT  LIABILITY    COMPREHENSIVE      RETAINED      TOTAL
                                                     ADJUSTMENTS     GAINS     ADJUSTMENT      INCOME          EARNINGS     EQUITY
                                                     -------------------------------------------------------------------------------
<S>                                                     <C>         <C>           <C>         <C>            <C>          <C>
BALANCE, JANUARY 1, 1996                                $ (24)      $ 2,397       $  --       $ 2,373        $ 16,369     $ 18,742
Comprehensive income (loss):
  Net income                                                                                                    1,078        1,078
  Other comprehensive income (loss), net of tax:
     Change in foreign currency translation
       adjustments                                        (32)                                    (32)                         (32)
     Change in net unrealized investment gains                       (1,261)                   (1,261)                      (1,261)
     Additional pension liability adjustment                                         (4)           (4)                          (4)
                                                                                                                          --------
  Other comprehensive income (loss)                                                                                         (1,297)
                                                                                                                          --------
Total comprehensive income (loss)                                                                                             (219)
                                                     -----------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1996                                (56)        1,136          (4)        1,076          17,447       18,523
Comprehensive income:
  Net income                                                                                                      610          610
  Other comprehensive income (loss), net of tax:
     Change in foreign currency translation
       adjustments                                        (29)                                    (29)                         (29)
     Change in net unrealized investment gains                          616                       616                          616
     Additional pension liability adjustment                                         (2)           (2)                          (2)
                                                                                                                          --------
  Other comprehensive income                                                                                                   585
                                                                                                                          --------
Total comprehensive income                                                                                                   1,195
                                                     -----------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997                                (85)        1,752          (6)        1,661          18,057       19,718
Comprehensive income:
  Net income                                                                                                    1,106        1,106
  Other comprehensive income, net of tax:
     Change in foreign currency translation
       adjustments                                         54                                      54                           54
     Change in net unrealized investment gains                         (480)                     (480)                        (480)
     Additional pension liability adjustment                                         (3)           (3)                          (3)
                                                                                                                          --------
  Other comprehensive income                                                                                                  (429)
                                                                                                                          --------
Total comprehensive income                                                                                                     677
                                                     -----------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998                              $ (31)      $ 1,272        $ (9)      $ 1,232        $ 19,163     $ 20,395
                                                     =============================================================================

</TABLE>

                   SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                           5
 
<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (IN MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                       1998         1997        1996
                                                                       ----         ----        ----
<S>                                                                 <C>          <C>          <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                        $   1,106    $     610    $   1,078
  Adjustments to reconcile net income to
     net cash provided by operating activities:
        Realized investment gains, net                                 (2,660)      (2,209)      (1,138)
        Policy charges and fee income                                    (135)        (258)        (208)
        Interest credited to policyholders' account balances            1,806        2,044        2,251
        Depreciation and amortization                                     305          258          266
        Loss (gain) on disposal of businesses                             223         --           (116)
        Change in:
           Deferred policy acquisition costs                             (165)        (142)        (122)
           Future policy benefits and other insurance liabilities         584        2,762        2,471
           Securities purchased under agreements to resell             (1,591)      (3,314)        (217)
           Trading account assets                                      (2,540)      (1,825)        (433)
           Income taxes receivable/payable                                594       (1,391)        (937)
           Cash collateral for borrowed securities                       (575)      (2,631)        (332)
           Cash collateral for securities loaned (net)                 (6,985)       5,668        2,891
           Broker-dealer related receivables/payables                   1,495         (672)        (607)
           Securities sold but not yet purchased                        2,122        1,633          251
           Securities sold under agreements to repurchase               9,139        4,844         (490)
         Other, net                                                    (5,168)       4,142       (1,334)
                                                                    ---------    ---------    ---------
               CASH FLOWS FROM OPERATING ACTIVITIES                    (2,445)       9,519        3,274
                                                                    ---------    ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale/maturity of:
        Fixed maturities, available for sale                          123,151      123,550      123,368
        Fixed maturities, held to maturity                              4,466        4,042        4,268
        Equity securities, available for sale                           2,792        2,572        2,162
        Mortgage loans on real estate                                   4,839        4,299        5,731
        Investment real estate                                          1,364        1,842          615
        Other long-term investments                                     1,848        5,081        3,203
        Disposal of businesses                                           --           --             52
  Payments for the purchase of:
        Fixed maturities, available for sale                         (126,742)    (129,854)    (125,093)
        Fixed maturities, held to maturity                             (2,244)      (2,317)      (2,844)
        Equity securities, available for sale                          (2,547)      (2,461)      (2,384)
        Mortgage loans on real estate                                  (4,885)      (3,363)      (1,906)
        Investment real estate                                            (31)        (241)        (142)
        Other long-term investments                                    (1,415)      (4,148)      (2,060)
  Short-term investments (net)                                          2,145       (2,848)      (1,915)
                                                                    ---------    ---------    ---------
               CASH FLOWS FROM INVESTING ACTIVITIES                     2,741       (3,846)       3,055
                                                                    ---------    ---------    ---------
</TABLE>


                    SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                           6

<PAGE>
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (IN MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                        1998         1997       1996
                                                        ----         ----       ----
<S>                                                  <C>         <C>         <C> 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Policyholders' account deposits                       6,955       5,020       2,676
  Policyholders' account withdrawals                  (11,111)     (9,873)     (8,099)
  Net increase in short-term debt                       2,422         305         583
  Proceeds from the issuance of long-term  debt         1,940         324          93
  Repayments of long-term debt                           (418)       (464)     (1,306)
                                                     --------    --------    --------
           CASH FLOWS USED IN FINANCING ACTIVITIES       (212)     (4,688)     (6,053)
                                                     --------    --------    --------
NET INCREASE IN CASH                                       84         985         276

CASH, BEGINNING OF YEAR                                 1,859         874         598
                                                     --------    --------    --------
CASH, END OF YEAR                                    $  1,943    $  1,859    $    874
                                                     ========    ========    ========
SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid                                    $    163    $    968    $    793
                                                     --------    --------    --------
Interest paid                                        $    864    $    708    $    595
                                                     --------    --------    --------
</TABLE>


                    SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                           7


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1.   BUSINESS

     The Prudential Insurance Company of America and its subsidiaries
     (collectively, "the Company") provide financial services throughout the
     United States and several locations worldwide. The Company's businesses
     provide a full range of insurance, investment, securities brokerage and
     other financial products and services to both retail consumers and
     institutions. Principal products and services provided include life
     insurance, property and casualty insurance, annuities, mutual funds,
     pension and retirement related investments and administration, asset
     management, and securities brokerage.

     DEMUTUALIZATION

     On February 10, 1998, the Company's Board of Directors authorized
     management to take the preliminary steps necessary to allow the Company to
     demutualize and become a publicly traded stock company. On July 1, 1998,
     legislation was enacted in New Jersey that would permit this conversion to
     occur and that specified the process for conversion. Demutualization is a
     complex process involving development of a plan of reorganization, adoption
     of a plan by the Company's Board of Directors, a public hearing, voting by
     qualified voters and regulatory approval. There can be no assurance that
     the Company will demutualize or, if it does so, when demutualization will
     occur.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of The
     Prudential Insurance Company of America, a mutual life insurance company,
     and its consolidated subsidiaries, and those partnerships and joint
     ventures in which the Company has a controlling interest. The consolidated
     financial statements have been prepared in accordance with generally
     accepted accounting principles ("GAAP"). All significant intercompany
     balances and transactions have been eliminated.

     USE OF ESTIMATES

     The preparation of financial statements in conformity with GAAP requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the period. Actual results could
     differ from those estimates.

     INVESTMENTS

     FIXED MATURITIES classified as "available for sale" are carried at
     estimated fair value. Fixed maturities that the Company has both the
     positive intent and ability to hold to maturity are stated at amortized
     cost and classified as "held to maturity." The amortized cost of fixed
     maturities are written down to estimated fair value when a decline in value
     is considered to be other than temporary. Unrealized gains and losses on
     fixed maturities "available for sale," net of income tax, the effect on
     deferred policy acquisition costs and participating annuity contracts that
     would result from the realization of unrealized gains and losses, are
     included in a separate component of equity, "Accumulated other
     comprehensive income."

     TRADING ACCOUNT ASSETS AND SECURITIES SOLD BUT NOT YET PURCHASED are
     carried at estimated fair value. Realized and unrealized gains and losses
     on trading account assets and securities sold but not yet purchased are
     included in "Commissions and other income."

     EQUITY SECURITIES, available for sale, are comprised of common and
     non-redeemable preferred stock and are carried at estimated fair value. The
     associated unrealized gains and losses, net of income tax, and the effects
     on deferred policy acquisition costs and participating annuity contracts
     that would result from the realization of unrealized gains and losses are
     included in a separate component of equity, "Accumulated other
     comprehensive income."


                                       8
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     MORTGAGE LOANS ON REAL ESTATE are stated primarily at unpaid principal
     balances, net of unamortized discounts and allowance for losses. The
     allowance for losses is based upon a loan specific review and, for
     performing loans collectively evaluated, a portfolio review. The loan
     specific review includes consideration of expected future cash flows
     relative to outstanding balances. The portfolio review includes
     consideration of the composition of the loan portfolio, current economic
     conditions, past results, current trends, the estimated aggregate value of
     the underlying collateral, and other relevant environmental factors.
     Impaired loans are identified by management as loans in which a probability
     exists that all amounts due according to the contractual terms of the loan
     agreement will not be collected. Impaired loans, identified in management's
     specific review of probable loan losses, are measured based on the present
     value of expected future cash flows discounted at the loan's effective
     interest rate, or the fair value of the collateral if the loan is
     collateral dependent.

     Interest received on impaired loans, including loans that were previously
     modified in a troubled debt restructuring, is either applied against the
     principal or reported as revenue, according to management's judgment as to
     the collectibility of principal. Management discontinues the accrual of
     interest on impaired loans after the loans are 90 days delinquent as to
     principal or interest, or earlier when management has serious doubts about
     collectibility. When a loan is recognized as impaired, any accrued but
     unpaid interest previously recorded on such loan is reversed against
     interest income of the current period. Generally, a loan is restored to
     accrual status only after all delinquent interest and principal are brought
     current and, in the case of loans where interest has been interrupted for a
     substantial period, a regular payment performance has been established.

     INVESTMENT REAL ESTATE to be disposed of is carried at the lower of
     depreciated cost or fair value less selling costs and is not depreciated
     once classified as such. Real estate which the Company has the intent to
     hold for the production of income, is carried at depreciated cost less any
     write-downs to fair value for impairment losses and is reviewed for
     impairment whenever events or circumstances indicate the carrying value may
     not be recoverable. In reviewing recoverability, an impairment loss is
     recognized for an other than temporary decline in value to the extent the
     reduction in carrying values of investment real estate exceeds estimated
     undiscounted future cash flows. Charges relating to real estate to be
     disposed of and impairments of real estate held for investment are included
     in "Realized investment gains, net." Depreciation on real estate is
     computed using the straight-line method over the estimated lives of the
     properties.

     POLICY LOANS are carried at unpaid principal balances.

     SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER
     AGREEMENTS TO REPURCHASE are treated as financing arrangements and are
     carried at the amounts at which the securities will be subsequently resold
     or reacquired, including accrued interest, as specified in the respective
     agreements. The Company's policy is to take possession of securities
     purchased under agreements to resell. The market value of securities to be
     repurchased or resold is monitored, and additional collateral is requested,
     where appropriate, to protect against credit exposure.

     SECURITIES BORROWED AND SECURITIES LOANED are treated as financing
     arrangements and are recorded at the amount of cash advanced or received.
     With respect to securities loaned, the Company obtains collateral in an
     amount equal to 102% and 105% of the fair value of the domestic and foreign
     securities, respectively. The Company monitors the market value of
     securities borrowed and loaned on a daily basis with additional collateral
     obtained as necessary. Non-cash collateral received is not reflected in the
     consolidated statements of financial position because the debtor typically
     has the right to redeem the collateral on short notice. Substantially all
     of the Company's securities borrowed contracts are with other brokers and
     dealers, commercial banks and institutional clients. Substantially all of
     the Company's securities loaned are with large brokerage firms.


                                       9
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Securities repurchase and resale agreements and securities borrowed and
     loaned transactions are used to generate net investment income and
     facilitate trading activity. These instruments are short-term in nature
     (usually 30 days or less) and are collateralized principally by U.S.
     Government and mortgage-backed securities. The carrying amounts of these
     instruments approximate fair value because of the relatively short period
     of time between the origination of the instruments and their expected
     realization.

     OTHER LONG-TERM INVESTMENTS primarily represent the Company's investments
     in joint ventures and partnerships in which the Company does not have
     control and derivatives held for purposes other than trading. Joint venture
     and partnership investments are recorded using the equity method of
     accounting, reduced for other than temporary declines in value.

     SHORT-TERM INVESTMENTS, including highly liquid debt instruments purchased
     with an original maturity of twelve months or less, are carried at
     amortized cost, which approximates fair value.

     REALIZED INVESTMENT GAINS, NET are computed using the specific
     identification method. Costs of fixed maturities and equity securities are
     adjusted for impairments considered to be other than temporary. Allowances
     for losses on mortgage loans on real estate are netted against asset
     categories to which they apply and provisions for losses on investments are
     included in "Realized investment gains, net." Decreases in the lower of
     depreciated cost or fair value less selling costs of investment real estate
     held for sale are recorded in "Realized investment gains, net."

     CASH

     Cash includes cash on hand, amounts due from banks, and money market
     instruments.

     DEFERRED POLICY ACQUISITION COSTS

     The costs which vary with and that are related primarily to the production
     of new insurance business are deferred to the extent such costs are deemed
     recoverable from future profits. Such costs include certain commissions,
     costs of policy issuance and underwriting, and certain variable field
     office expenses. Deferred policy acquisition costs are subject to
     recoverability testing at the time of policy issue and loss recognition
     testing at the end of each accounting period. Deferred policy acquisition
     costs, for certain products, are adjusted for the impact of unrealized
     gains or losses on investments as if these gains or losses had been
     realized, with corresponding credits or charges included in "Accumulated
     other comprehensive income."

     For participating life insurance, deferred policy acquisition costs are
     amortized over the expected life of the contracts (up to 45 years) in
     proportion to estimated gross margins based on historical and anticipated
     future experience, which is updated periodically. The effect of changes in
     estimated gross margins is reflected in earnings in the period they are
     revised. Policy acquisition costs related to interest-sensitive products
     and certain investment-type products are deferred and amortized over the
     expected life of the contracts (periods ranging from 15 to 30 years) in
     proportion to estimated gross profits arising principally from investment
     results, mortality and expense margins and surrender charges based on
     historical and anticipated future experience, updated periodically. The
     effect of revisions to estimated gross profits on unamortized deferred
     acquisition costs is reflected in earnings in the period such estimated
     gross profits are revised. The average rate of assumed investment yield in
     estimating expected gross margins was 9.97%, 9.39%, and 8.39% for 1998,
     1997 and 1996, respectively. Deferred policy acquisition costs related to
     non-participatory term insurance are amortized over the expected life of
     the contracts in proportion to the premium income.

     For property and casualty contracts, deferred policy acquisition costs are
     amortized over the period in which related premiums are earned. Future
     investment income is considered in determining the recoverability of
     deferred policy acquisition costs.


                                       10
<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     For disability insurance, group life insurance and most group annuities,
     acquisition costs are expensed as incurred.

     POLICYHOLDERS' DIVIDENDS

     The amount of the dividends to be paid to policyholders is determined
     annually by the Company's Board of Directors. The aggregate amount of
     policyholders' dividends is related to actual interest, mortality,
     morbidity, persistency and expense experience for the year and judgment as
     to the appropriate level of statutory surplus to be retained by the
     Company.

     SEPARATE ACCOUNT ASSETS AND LIABILITIES

     Separate Account assets and liabilities are reported at estimated fair
     value and represent segregated funds which are invested for certain
     policyholders, pension fund and other customers. The assets consist of
     common stocks, fixed maturities, real estate related securities, real
     estate mortgage loans and short term investments. The assets of each
     account are legally segregated and are not subject to claims that arise out
     of any other business of the Company. Investment risks associated with
     market value changes are generally borne by the customers, except to the
     extent of minimum guarantees made by the Company with respect to certain
     accounts. The investment income and gains or losses for separate accounts
     generally accrue to the policyholders and are not included in the
     Consolidated Statements of Operations. Mortality, policy administration and
     surrender charges on the accounts are included in "Policy charges and fee
     income."

     OTHER ASSETS AND OTHER LIABILITIES

     Other assets consist primarily of prepaid benefit costs, reinsurance
     recoverables, certain restricted assets, trade receivables and property and
     equipment. Property and equipment are stated at cost less accumulated
     depreciation. Depreciation is determined using the straight-line method
     over the estimated useful lives of the related assets which generally range
     from 3 to 40 years. Other liabilities consist primarily of trade payables
     and reserves for sales practice remediation costs.

     INSURANCE REVENUE AND EXPENSE RECOGNITION

     Premiums from participating insurance policies are recognized when due.
     Benefits are recorded as an expense when they are incurred. A liability for
     future policy benefits is recorded using the net level premium method.

     Premiums from non-participating group annuities with life contingencies are
     recognized when due. For single premium immediate annuities and structured
     settlements, premiums are recognized when due with any excess profit
     deferred and recognized in a constant relationship to insurance in-force
     or, for annuities, the amount of expected future benefit payments.

     Amounts received as payment for interest sensitive investment contracts,
     deferred annuities and participating group annuities are reported as
     deposits to "Policyholders' account balances." Revenues from these
     contracts are reflected in "Policy charges and fee income" and consist
     primarily of fees assessed during the period against the policyholders'
     account balances for mortality charges, policy administration charges,
     surrender charges and interest earned from the investment of these account
     balances. Benefits and expenses for these products include claims in excess
     of related account balances, expenses of contract administration, interest
     credited and amortization of deferred policy acquisition costs.

     For disability insurance, group life insurance, and property and casualty
     insurance, premiums are recognized over the period to which the premiums
     relate in proportion to the amount of insurance protection provided. Claim
     and claim adjustment expenses are recognized when incurred.


                                       11
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Premiums, benefits and expenses are stated net of reinsurance ceded to
     other companies. Estimated reinsurance receivables and the cost of
     reinsurance are recognized over the life of the reinsured policies using
     assumptions consistent with those used to account for the underlying
     policies.

     FOREIGN CURRENCY TRANSLATION ADJUSTMENTS

     Assets and liabilities of foreign operations and subsidiaries reported in
     other than U.S. dollars are translated at the exchange rate in effect at
     the end of the period. Revenues, benefits and other expenses are translated
     at the average rate prevailing during the period. The effects of
     translating the Statements of Financial Position of non-U.S. entities with
     functional currencies other than the U.S. dollar are recorded, net of
     related hedge gains and losses and income taxes, as "Other comprehensive
     income," a separate component of equity.

     COMMISSIONS AND OTHER INCOME

     Commissions and other income principally includes securities and
     commodities commission revenues, asset management fees, investment banking
     revenue and realized and unrealized gains from trading activities of the
     Company's broker-dealer subsidiary.

     DERIVATIVE FINANCIAL INSTRUMENTS

     Derivatives are financial instruments whose values are derived from
     interest rates, foreign exchange rates, various financial indices, or the
     value of securities or commodities. Derivative financial instruments can be
     exchange-traded or contracted in the over-the-counter market and those used
     by the Company include swaps, futures, forwards and options contracts. The
     Company uses derivative financial instruments to hedge market risk from
     changes in interest rates or foreign currency exchange rates, and to alter
     interest rate or currency exposures arising from mismatches between assets
     and liabilities. Additionally, derivatives are used in the broker-dealer
     business and in a limited-purpose subsidiary for trading purposes.

     To qualify as a hedge, derivatives must be designated as hedges for
     existing assets, liabilities, firm commitments, or anticipated transactions
     which are identified and probable to occur, and effective in reducing the
     market risk to which the Company is exposed. The effectiveness of the
     derivatives are evaluated at the inception of the hedge and throughout the
     hedge period.

     DERIVATIVES HELD FOR TRADING PURPOSES are used in the Company's securities
     broker-dealer business and in a limited-purpose subsidiary to meet the
     needs of its customers by structuring transactions that allow customers to
     manage their exposure to interest rates, foreign exchange rates, indices or
     prices of securities and commodities. Trading derivative positions are
     valued daily, generally by obtaining quoted market prices or through the
     use of pricing models. Values are affected by changes in interest rates,
     currency exchange rates, credit spreads, market volatility and liquidity.
     The Company monitors these exposures through the use of various analytical
     techniques.

     Derivatives held for trading are recorded at fair value in "Trading account
     assets," "Other liabilities" or "Receivables from/Payables to broker-dealer
     clients" in the Consolidated Statements of Financial Position, and realized
     and unrealized changes in fair value are included in "Commissions and other
     income" of the Consolidated Statements of Operations in the periods in
     which the changes occur. Cash flows from trading derivatives are reported
     in the operating activities section of the Consolidated Statements of Cash
     Flows.

     DERIVATIVES HELD FOR PURPOSES OTHER THAN TRADING are primarily used to
     hedge or reduce exposure to interest rate and foreign currency risks
     associated with assets held or expected to be purchased or sold, and
     liabilities incurred or expected to be incurred. Additionally, other than
     trading derivatives are used to change the characteristics of the Company's
     asset/liability mix consistent with the Company's risk management
     activities.


                                       12
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     See Note 14 for a discussion of the accounting treatment of derivatives
     that qualify as hedges. If the Company's use of other than trading
     derivatives does not meet the criteria to apply hedge accounting, the
     derivatives are recorded at fair value in "Other long-term investments" or
     "Other liabilities" in the Consolidated Statements of Financial Position,
     and changes in their fair value are recognized in earnings in "Realized
     investment gains, net" without considering changes in the hedged assets or
     liabilities. Cash flows from other than trading derivative assets and
     liabilities are reported in the investing activities section in the
     Consolidated Statements of Cash Flows.

     INCOME TAXES

     The Company and its domestic subsidiaries file a consolidated federal
     income tax return. The Internal Revenue Code (the "Code") limits the amount
     of non-life insurance losses that may offset life insurance company taxable
     income. The Code also imposes an "equity tax" on mutual life insurance
     companies which, in effect, imputes an additional tax to the Company based
     on a formula that calculates the difference between stock and mutual life
     insurance companies' earnings. Income taxes include an estimate for changes
     in the total equity tax to be paid for current and prior years.
     Subsidiaries operating outside the United States are taxed under applicable
     foreign statutes.

     Deferred income taxes are generally recognized, based on enacted rates,
     when assets and liabilities have different values for financial statement
     and tax reporting purposes. A valuation allowance is recorded to reduce a
     deferred tax asset to that portion that is expected to be realized.

     NEW ACCOUNTING PRONOUNCEMENTS

     In June 1996, the Financial Accounting Standards Board ("FASB") issued the
     Statement of Financial Accounting Standards ("SFAS") No. 125, "Accounting
     for Transfers and Servicing of Financial Assets and Extinguishments of
     Liabilities" ("SFAS 125"). The statement provides accounting and reporting
     standards for transfers and servicing of financial assets and
     extinguishments of liabilities and provides consistent standards for
     distinguishing transfers of financial assets that are sales from transfers
     that are secured borrowings. SFAS 125 became effective January 1, 1997 and
     was applied prospectively. Subsequent to June 1996, FASB issued SFAS No.
     127, "Deferral of the Effective Date of Certain Provisions of SFAS 125"
     ("SFAS 127"). SFAS 127 delayed the implementation of SFAS 125 for one year
     for certain provisions, including repurchase agreements, dollar rolls,
     securities lending and similar transactions. The Company adopted the
     delayed provisions of SFAS 125 in 1998. The adoption of SFAS 125 did not
     have a material impact on the Company's results of operations or financial
     position.

     During 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
     Income," which was issued by the FASB in June 1997. This statement defines
     comprehensive income and establishes standards for reporting and displaying
     comprehensive income and its components in financial statements. The
     statement requires that the Company classify items of other comprehensive
     income by their nature and display the accumulated balance of other
     comprehensive income separately from retained earnings in the equity
     section of the Statements of Financial Position. Application of this
     statement did not change recognition or measurement of net income and,
     therefore, did not affect the Company's financial position or results of
     operations.

     During 1998, the Company adopted SFAS No. 132, "Employers' Disclosures
     about Pensions and Other Postretirement Benefits," which was issued by the
     FASB in February 1998. This statement standardizes the disclosure
     requirements for pensions and other postretirement benefits, requires
     additional information on changes in the benefit obligations and fair
     values of plan assets and eliminates certain disclosures. This statement is
     limited to changes in reporting and presentation and does not change
     recognition or measurement of pension or other postretirement benefit
     plans. Therefore, its adoption did not affect the Company's financial
     position or results of operations.


                                       13
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     On January 1, 1998, the Company adopted the American Institute of Certified
     Public Accountants ("AICPA") Statement of Position 97-3, "Accounting by
     Insurance and Other Enterprises for Insurance-Related Assessments" ("SOP
     97-3"). This statement provides guidance for determining when an insurance
     company or other enterprise should recognize a liability for guaranty-fund
     assessments as well as guidance for measuring the liability. The adoption
     of SOP 97-3 did not have a material effect on the Company's financial
     condition or results of operations. In June 1998, the FASB issued SFAS No.
     133, "Accounting for Derivative Instruments and Hedging Activities" which
     requires that companies recognize all derivatives as either assets or
     liabilities in the balance sheet and measure those instruments at fair
     value. SFAS No. 133 provides, if certain conditions are met, that a
     derivative may be specifically designated as (1) a hedge of the exposure to
     changes in the fair value of a recognized asset or liability or an
     unrecognized firm commitment (fair value hedge), (2) a hedge of the
     exposure to variable cash flows of a forecasted transaction (cash flow
     hedge), or (3) a hedge of the foreign currency exposure of a net investment
     in a foreign operation, an unrecognized firm commitment, an
     available-for-sale security or a foreign-currency-denominated forecasted
     transaction (foreign currency hedge).

     SFAS No. 133 does not apply to most traditional insurance contracts.
     However, certain hybrid contracts that contain features which can affect
     settlement amounts similarly to derivatives may require separate accounting
     for the "host contract" and the underlying "embedded derivative"
     provisions. The latter provisions would be accounted for as derivatives as
     specified by the statement.

     Under SFAS No. 133, the accounting for changes in fair value of a
     derivative depends on its intended use and designation. For a fair value
     hedge, the gain or loss is recognized in earnings in the period of change
     together with the offsetting loss or gain on the hedged item. For a cash
     flow hedge, the effective portion of the derivative's gain or loss is
     initially reported as a component of other comprehensive income and
     subsequently reclassified into earnings when the forecasted transaction
     affects earnings. For a foreign currency hedge, the gain or loss is
     reported in other comprehensive income as part of the foreign currency
     translation adjustment. For all other derivatives not designated as hedging
     instruments, the gain or loss is recognized in earnings in the period of
     change. The Company is required to adopt this Statement no later than
     January 1, 2000 and is currently assessing the effect of the new standard.

     In October 1998, the AICPA issued Statement of Position 98-7, "Deposit
     Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not
     Transfer Insurance Risk," ("SOP 98-7"). This statement provides guidance on
     how to account for insurance and reinsurance contracts that do not transfer
     insurance risk. SOP 98-7 is effective for fiscal years beginning after June
     15, 1999. The adoption of this statement is not expected to have a material
     effect on the Company's financial position or results of operations.

     RECLASSIFICATIONS

     Certain amounts in prior years have been reclassified to conform to current
     year presentation.


                                       14
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

3.   DISCONTINUED OPERATIONS

     In December 1998, the Company entered into a definitive agreement to sell
     its HealthCare business to Aetna Inc. ("Aetna"). Included in this
     transaction are the Company's managed medical care, point of service,
     preferred provider organization and indemnity health lines, dental
     business, as well as the Company's Administrative Services Only ("ASO")
     businesses. The transaction was approved by the boards of directors of both
     companies and is expected to be completed in the second quarter of 1999,
     subject to review by federal antitrust authorities and approval by state
     regulators, and other customary closing conditions. Proceeds from the sale
     will consist of $500 million of cash and $500 million of Aetna three year
     senior notes.

     Loss from operations of discontinued businesses for 1998 includes results
     through December 31, 1998 (the measurement date). The Statements of
     Operations for 1997 and 1996 have been restated to conform with the 1998
     presentation. Amounts within the footnotes have been adjusted, where noted,
     to eliminate the impact of discontinued operations and to be consistent
     with the presentation in the Consolidated Statements of Operations. The
     following table presents the results of operations and the loss on the
     disposal of the Company's HealthCare business, determined as of the
     measurement date, which are included in "Discontinued Operations" in the
     Consolidated Statements of Operations. Amounts for 1997 and 1996 include
     revenues and expenses relating to a contract with the American Association
     of Retired Persons for healthcare and similar coverages which was
     terminated effective December 31, 1997.
<TABLE>
<CAPTION>
                                                            1998        1997        1996
                                                          ---------   ---------   ---------
                                                                   (In Millions)
<S>                                                       <C>         <C>         <C>      
     Revenues                                             $  7,461    $ 10,305    $  9,187 
     Policyholder benefits                                  (6,064)     (8,484)     (7,711)
     General and administrative expenses                    (1,822)     (2,364)     (1,921)
                                                          ---------   ---------   ---------
     Loss before income taxes                                 (425)       (543)       (445)
     Income tax benefit                                        127         190         163
                                                          ---------   ---------   ---------
     Loss from operations                                     (298)       (353)       (282)
     Loss on disposal, net of tax benefit of $131             (223)          -           -
                                                          ---------   ---------   ---------
     Loss from discontinued operations, net of taxes      $   (521)   $   (353)   $   (282)
                                                          =========   =========   =========
</TABLE>

     The loss on disposal includes anticipated operating losses to be incurred
     by the HealthCare business subsequent to the measurement date through the
     expected date of the sale, as well as estimates of other costs the Company
     will incur in connection with the disposition of the HealthCare business.
     Actual amounts may differ from these estimates. These include costs
     attributable to facilities closure and systems terminations, severance,
     payments to Aetna related to the ASO business, and estimated payments in
     connection with an agreement covering the fully insured medical and dental
     business. The latter agreement provides for payments either to or from
     Aetna in the event that medical loss ratios (i.e., incurred medical expense
     divided by earned premiums) for covered businesses are either less
     favorable or more favorable than levels specified in the agreement for the
     years 1999 and 2000. The loss on disposition was reduced by the estimated
     impact of expected modifications of certain pension and other
     postretirement benefit plans in which employees of the HealthCare business
     participate. This amount includes curtailment gains and the cost of
     termination benefits. (See Note 9.)


                                       15
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

3.   DISCONTINUED OPERATIONS (CONTINUED)

     The following table presents the assets and liabilities pertaining to the
     Company's HealthCare business at December 31, 1998 which are included in
     the Company's Consolidated Statements of Financial Position.

                                                    (In Millions)

     Cash and investments                              $ 1,652
     Other assets                                        1,030
                                                       -------
     Total assets                                        2,682
     
     Future policy benefits                              1,241
     Other liabilities                                   1,105
                                                       -------
     Total liabilities                                   2,346
                                                       -------
     
     Net assets                                        $   336
                                                       =======


4.   INVESTMENTS

     FIXED MATURITIES AND EQUITY SECURITIES

     The following tables provide additional information relating to fixed
     maturities and equity securities (excluding trading account assets) as of
     December 31:
<TABLE>
<CAPTION>
                                                                                            1998
                                                             -------------------------------------------------------------
                                                                                  GROSS           GROSS
                                                              AMORTIZED        UNREALIZED      UNREALIZED       ESTIMATED
                                                                 COST             GAINS          LOSSES         FAIR VALUE
                                                             ----------        ----------      ----------       ----------
                                                                                       (In Millions)
<S>                                                          <C>               <C>              <C>             <C>     
     FIXED MATURITIES AVAILABLE FOR SALE                                               
     U.S. Treasury securities and obligations of
       U.S. government corporations and agencies             $  5,761          $    580         $     9         $  6,332
     
     Obligations of U.S. states and
       their political subdivisions                             2,672               204               1            2,875
     
     Foreign government bonds                                   3,156               253              52            3,357
     
     Corporate securities                                      57,373             2,545             553           59,365
                                                               
     Mortgage-backed securities                                 7,935               208              14            8,129
     
     Other fixed maturities                                       100                 -               -              100
                                                             -----------------------------------------------------------
     Total fixed maturities available for sale               $ 76,997          $  3,790         $   629         $ 80,158
                                                             ===========================================================
     EQUITY SECURITIES AVAILABLE FOR SALE                    $  2,583          $    472         $   296         $  2,759
                                                             ===========================================================
</TABLE>


                                       16
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
                                                                                          1998
                                                             ------------------------------------------------------------
                                                                               GROSS            GROSS
                                                              AMORTIZED     UNREALIZED        UNREALIZED        ESTIMATED
                                                                 COST          GAINS            LOSSES         FAIR VALUE
                                                             ----------     ----------        ----------       ----------
<S>                                                          <C>              <C>                <C>             <C>     
     FIXED MATURITIES HELD TO MATURITY                                              (In Millions)
     U.S. Treasury securities and obligations of
       U.S. government corporations and agencies               $    5          $     -           $     -           $    5
     
     Obligations of U.S. states and
        their political subdivisions                               62                2                 1               63
     
     Foreign government bonds                                      31                4                 -               35
     
     Corporate securities                                      16,699            1,096                49           17,746
     
     Mortgage-backed securities                                     1                -                 -                1
     
     Other fixed maturities                                        50                6                 -               56
                                                             ------------------------------------------------------------
     Total fixed maturities held to maturity                 $ 16,848         $  1,108           $    50         $ 17,906
                                                             ============================================================


<CAPTION>
                                                                                        1997
                                                           -------------------------------------------------------------
                                                                                GROSS            GROSS
                                                            AMORTIZED        UNREALIZED       UNREALIZED       ESTIMATED
                                                               COST             GAINS           LOSSES         FAIR VALUE
                                                            ---------        ----------       -----------      ----------
<S>                                                          <C>               <C>              <C>             <C>     
     FIXED MATURITIES AVAILABLE FOR SALE                                           (In Millions)
     U.S. Treasury securities and obligations of
       U.S. government corporations and agencies             $  9,071          $    671          $    -         $  9,742
     
     Obligations of U.S. states and
       their political subdivisions                             1,529               152               -            1,681
     
     Foreign government bonds                                   3,177               218              17            3,378
     
     Corporate securities                                      50,043             2,611             144           52,510
     
     Mortgage-backed securities                                 7,576               288               5            7,859
     
     Other fixed maturities                                       100                 -               -              100
                                                             -----------------------------------------------------------
     Total fixed maturities available for sale               $ 71,496         $   3,940         $   166        $  75,270
                                                             ===========================================================
     EQUITY SECURITIES AVAILABLE FOR SALE                    $  2,376          $    680         $   246         $  2,810
                                                             ===========================================================
</TABLE>

                                       17
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
                                                                                         1997
                                                           ---------------------------------------------------------------
                                                                                GROSS            GROSS
                                                            AMORTIZED        UNREALIZED        UNREALIZED        ESTIMATED
                                                               COST             GAINS            LOSSES         FAIR VALUE
                                                           -----------       ----------        -----------      ----------
                                                                                     (In Millions)
     <S>                                                     <C>              <C>                <C>             <C>     
     FIXED MATURITIES HELD TO MATURITY
     U.S. Treasury securities and obligations of
       U.S. government corporations and agencies              $    88          $     -           $     -          $    88
     
     Obligations of U.S. states and
        their political subdivisions                              152                4                 1              155
     
     Foreign government bonds                                      33                5                 -               38
     
     Corporate securities                                      18,282            1,212                34           19,460
     
     Mortgage-backed securities                                     1                -                 -                1
     
     Other fixed maturities                                       144                8                 -              152
                                                             ------------------------------------------------------------
     Total fixed maturities held to maturity                 $ 18,700         $  1,229           $    35         $ 19,894
                                                             ============================================================
</TABLE>


                                       18
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)

     The amortized cost and estimated fair value of fixed maturities by
     contractual maturities at December 31, 1998, is shown below:
<TABLE>
<CAPTION>
                                                        AVAILABLE FOR SALE                HELD TO MATURITY     
                                                    ----------------------------        -----------------------
                                                                    ESTIMATED                        ESTIMATED
                                                    AMORTIZED          FAIR             AMORTIZED       FAIR
                                                      COST            VALUE               COST         VALUE
                                                    ------------  --------------        -----------  ----------
                                                              (In Millions)                 (In Millions)
<S>                                                 <C>             <C>                 <C>          <C>     
     Due in one year or less                        $   2,638       $    2,644          $    730     $    736
     Due after one year through five years             17,551           17,874             4,326        4,465
     Due after five years through ten years            19,523           19,976             6,783        7,162
     Due after ten years                               29,350           31,535             5,008        5,542
     Mortgage-backed securities                         7,935            8,129                 1            1
                                                    ---------       ----------          --------     --------
            Total                                   $  76,997       $   80,158          $ 16,848     $ 17,906
                                                    =========       ==========          ========     ========
</TABLE>

     Actual maturities may differ from contractual maturities because issuers
     may have the right to call or prepay obligations.

     Proceeds from the repayment of held to maturity fixed maturities during
     1998, 1997 and 1996 were $4,466 million, $4,042 million and $4,268 million,
     respectively. Gross gains of $135 million, $62 million and $78 million, and
     gross losses of $2 million, $1 million and $7 million, were realized on
     prepayment of held to maturity fixed maturities during 1998, 1997 and 1996,
     respectively.

     Proceeds from the sale of available for sale fixed maturities during 1998,
     1997 and 1996 were $119,096 million, $120,604 million and $121,910 million,
     respectively. Proceeds from the maturity of available for sale fixed
     maturities during 1998, 1997 and 1996 were $ 4,055 million, $2,946 million
     and $1,458 million, respectively. Gross gains of $1,765 million, $1,310
     million and $1,562 million and gross losses of $443 million, $639 million
     and $1,026 million were realized on sales and prepayments of available for
     sale fixed maturities during 1998, 1997 and 1996, respectively.

     Writedowns for impairments of fixed maturities which were deemed to be
     other than temporary were $96 million, $13 million and $54 million for the
     years 1998, 1997 and 1996, respectively.

     During the years ended December 31, 1998 and December 31, 1997, certain
     securities classified as held to maturity were transferred to the available
     for sale portfolio. These actions were taken as a result of a significant
     deterioration in credit worthiness. The aggregate amortized cost of the
     securities transferred was $73 million and $27 million, respectively with
     gross unrealized investment losses of $.4 million and gross unrealized
     investment gains of $.6 million included during the years ended December
     31, 1998 and 1997, respectively, in "Accumulated other comprehensive
     income" at the time of the transfer.


                                       19
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)

     MORTGAGE LOANS ON REAL ESTATE

     The Company's mortgage loans were collateralized by the following property
     types at December 31:


                               AMOUNT     PERCENTAGE      AMOUNT      PERCENTAGE
                            (IN MILLIONS)  OF TOTAL    (IN MILLIONS)   OF TOTAL
                            ------------- ----------   -------------  ----------
                                        1998                       1997
                            ------------------------   -------------------------
     Office buildings         $  4,267       25.2%       $  4,692       28.5%
     Retail stores               3,021       17.9%          3,078       18.7%
     Residential properties        716        4.2%            891        5.4%
     Apartment complexes         4,362       25.8%          3,551       21.6%
     Industrial buildings        1,989       11.8%          1,958       11.9%
     Agricultural properties     1,936       11.4%          1,666       10.1%
     Other                         631        3.7%            618        3.8%
                              --------      -----        --------      ----- 
       Subtotal                 16,922      100.0%         16,454      100.0%
                                            =====                      =====
     Allowance for losses         (427)                      (450)
                              --------                   --------
     Net carrying value       $ 16,495                   $ 16,004
                              ========                   ========

     The mortgage loans are geographically dispersed throughout the United
     States and  Canada with the largest concentrations in California (23.8%)
     and New York (9.5%) at December 31, 1998. Included in the above balances
     are mortgage loans receivable from affiliated joint ventures of $87 million
     and $225 million at December 31, 1998 and 1997, respectively.

     Activity in the allowance for losses for all mortgage loans, for the years
     ended December 31, is summarized as follows:


                                                 1998       1997       1996
                                                 -----      -----      -----
                                                        (In Millions)

     Allowance for losses, beginning of year     $ 450      $ 515      $ 862
     Additions charged to operations               -          -          -
     Release of allowance for losses               -          (41)      (247)
     Charge-offs, net of recoveries                (23)       (24)      (100)
                                                 -----      -----      -----
     Allowance for losses, end of year           $ 427      $ 450      $ 515
                                                 =====      =====      =====


     The $41 million and $247 million reductions of the mortgage loan allowance
     for losses in 1997 and 1996, respectively, are primarily attributable to
     the improved economic climate, changes in the nature and mix of borrowers
     and underlying collateral and a significant decrease in impaired loans.


                                       20
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)

     Impaired mortgage loans identified in management's specific review of
     probable loan losses and related allowance for losses at December 31, are
     as follows:

                                                             1998        1997
                                                            -------     -------
                                                              (In Millions)

     Impaired mortgage loans with allowance for losses      $   149     $   330
     Impaired mortgage loans with no allowance for losses       924       1,303
     Allowance for losses                                       (45)        (97)
                                                            -------     -------
     Net carrying value of impaired mortgage loans          $ 1,028     $ 1,536
                                                            =======     =======

     Impaired mortgage loans with no provision for losses are loans where the
     fair value of the collateral or the net present value of the expected
     future cash flows related to the loan equals or exceeds the recorded
     investment. The average recorded investment in impaired loans before
     allowance for losses was $1,329 million, $2,102 million and $2,842 million
     during 1998, 1997 and 1996, respectively. Net investment income recognized
     on these loans totaled $94 million, $140 million and $265 million for the
     years ended December 31, 1998, 1997 and 1996, respectively.

     INVESTMENT REAL ESTATE

     The Company's "Investment real estate" of $801 million and $1,519 million
     at December 31, 1998 and 1997, respectively, is held through direct
     ownership. Of the Company's real estate, $675 million and $1,490 million
     consists of commercial and agricultural assets held for disposal at
     December 31, 1998 and 1997, respectively. Impairment losses aggregated $8
     million, $40 million and $38 million for the years ended December 31, 1998,
     1997 and 1996, respectively, and are included in "Realized investment
     gains, net."

     RESTRICTED ASSETS AND SPECIAL DEPOSITS

     Assets of $3,135 million and $2,783 million at December 31, 1998 and 1997,
     respectively, were on deposit with governmental authorities or trustees as
     required by certain insurance laws. Additionally, assets valued at $3,727
     million and $2,352 million at December 31, 1998 and 1997, respectively,
     were held in voluntary trusts. Of this amount, $3,131 million and $1,801
     million at December 31, 1998 and 1997, respectively, related to the
     multi-state policyholder settlement as described in Note 16. The remainder
     relates to trusts established to fund guaranteed dividends to certain
     policyholders. The terms of these trusts provide that the assets are to be
     used for payment of the designated settlement and dividend benefits, as the
     case may be. Assets valued at $403 million and $632 million at December 31,
     1998 and 1997, respectively, were maintained as compensating balances,
     which do not legally restrict the use of the funds, or pledged as
     collateral for bank loans and other financing agreements. Restricted cash
     and securities of $2,366 million and $1,835 million at December 31, 1998
     and 1997, respectively, were included in the consolidated financial
     statements in "Other assets." The restricted cash represents funds
     deposited by clients and funds accruing to clients as a result of trades or
     contracts.

     OTHER LONG-TERM INVESTMENTS

     The Company's "Other long-term investments" of $2,658 million and $2,489
     million as of December 31, 1998 and 1997, respectively, are comprised of
     $1,007 million and $1,498 million in real estate related interests and
     $1,651 million and $991 million of non-real estate related interests. The
     Company's share of net income from such entities was $285 million, $411
     million and $245 million for 1998, 1997 and 1996, respectively, and is
     reported in "Net investment income."


                                       21
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)


     INVESTMENT INCOME AND INVESTMENT GAINS AND LOSSES

     NET INVESTMENT INCOME arose from the following sources for the years ended
     December 31:

<TABLE>
<CAPTION>
                                                           1998          1997          1996
                                                         --------      --------      --------
                                                                     (In Millions)
<S>                                                      <C>           <C>           <C>     
     Fixed maturities - available for sale               $  5,366      $  5,074      $  4,871
     Fixed maturities - held to maturity                    1,406         1,622         1,793
     Trading account assets                                   677           504           444
     Equity securities  - available for sale                   54            52            81
     Mortgage loans on real estate                          1,525         1,555         1,690
     Investment real estate                                   230           565           685
     Policy loans                                             410           396           384
     Securities purchased under agreements to resell           18            15            11
     Receivables from broker-dealer clients                   836           706           579
     Short-term investments                                   725           697           702
     Other investment income                                  415           520           559
                                                         --------      --------      --------
     Gross investment income                               11,662        11,706        11,799
     Less investment expenses                              (2,035)       (2,038)       (2,130)
                                                         --------      --------      --------
     Subtotal                                               9,627         9,668         9,669
     Less amount relating to discontinued operations         (107)         (212)         (208)
                                                         --------      --------      --------
     Net investment income                               $  9,520      $  9,456      $  9,461
                                                         ========      ========      ========
</TABLE>

     REALIZED INVESTMENT GAINS, NET, for the years ended December 31, were from
     the following sources:

<TABLE>
<CAPTION>
                                                           1998          1997          1996
                                                         --------      --------      --------
                                                                     (In Millions)
<S>                                                      <C>           <C>           <C>     
     Fixed maturities                                    $  1,381      $    684      $    513
     Mortgage loans on real estate                             22            68           248
     Investment real estate                                   642           700            76
     Equity securities - available for sale                   427           363           267
     Other                                                    188           394            34
                                                         --------      --------      --------
     Subtotal                                               2,660         2,209         1,138
     Less amounts related to discontinued operations          (30)          (41)          (10)
                                                         --------      --------      --------
     Realized investment gains, net                      $  2,630      $  2,168      $  1,128
                                                         ========      ========      ========
</TABLE>

     Based on the carrying value, assets categorized as "non-income producing"
     for the year ended December 31, 1998 included in fixed maturities available
     for sale, mortgage loans on real estate and other long term investments
     totaled $1 million, $23 million and $13 million, respectively.


                                       22
<PAGE>



THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

4.   INVESTMENTS (CONTINUED)


     NET UNREALIZED INVESTMENT GAINS

     Net unrealized investment gains on securities available for sale are
     included in the Consolidated Statements of Financial Position as a
     component of "Accumulated other comprehensive income." Changes in these
     amounts include reclassification adjustments to avoid double-counting in
     "Comprehensive income," items that are included as part of "Net income" for
     a period that also had been part of "Other comprehensive income" in earlier
     periods. The amounts for the years ended December 31, are as follows:

<TABLE>
<CAPTION>
                                                                               1998         1997         1996
                                                                              -------      -------      -------
                                                                                        (In Millions)
<S>                                                                           <C>          <C>          <C>    
     Net unrealized investment gains, beginning of year                       $ 1,752      $ 1,136      $ 2,397
     Changes in net unrealized investment gains attributable to:
       Investments:
         Net unrealized investment gains (losses) on investments arising
           during the period                                                      522        1,706       (1,281)
         Reclassification adjustment for gains included in net income          (1,087)        (631)        (471)
                                                                              -------      -------      -------
         Change in net unrealized investment gains, net of adjustments           (565)       1,075       (1,752)
     Impact of net unrealized investment gains on:
         Future policy benefits                                                    23         (360)         318
         Deferred policy acquisition costs                                         62          (99)         173
                                                                              -------      -------      -------
     Change in net unrealized investment gains                                   (480)         616       (1,261)
                                                                              -------      -------      -------
     Net unrealized investment gains, end of year                             $ 1,272      $ 1,752      $ 1,136
                                                                              =======      =======      =======
</TABLE>

     Unrealized gains (losses) on investments arising during the periods
     reported in the above table are net of income tax expense (benefit) of $282
     million, $961 million and $(647) million for the years ended December 31,
     1998, 1997 and 1996, respectively.

     Reclassification adjustments reported in the above table for the years
     ended December 31, 1998, 1997 and 1996 are net of income tax expense of
     $588 million, $355 million and $238 million, respectively.

     The future policy benefits reported in the above table are net of income
     tax expense (benefit) of $15 million, $(203) million and $161 million for
     the years ended December 31, 1998, 1997 and 1996, respectively.

     Deferred policy acquisition costs in the above tables for the years ended
     December 31, 1998, 1997 and 1996 are net of income tax expense (benefit) of
     $36 million, $(55) million and $88 million, respectively.


                                       23
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5.   DEFERRED POLICY ACQUISITION COSTS

     The balances of and changes in deferred policy acquisition costs as of and
     for the years ended December 31, are as follows:

<TABLE>
<CAPTION>
                                                                  1998         1997         1996
                                                                 -------      -------      -------
                                                                           (In Millions)
<S>                                                              <C>          <C>          <C>    
     Balance, beginning of year                                  $ 6,083      $ 6,095      $ 5,892
     Capitalization of commissions, sales and issue expenses       1,313        1,409        1,260
     Amortization                                                 (1,139)      (1,176)      (1,261)
     Change in unrealized investment gains                            77         (154)         261
     Foreign currency translation                                    128          (91)         (57)
                                                                 -------      -------      -------
     Balance, end of year                                        $ 6,462      $ 6,083      $ 6,095
                                                                 =======      =======      =======
</TABLE>

6.   POLICYHOLDERS' LIABILITIES

     FUTURE POLICY BENEFITS at December 31, are as follows:

                                      1998       1997
                                    -------     -------
                                       (In Millions)

     Life insurance                 $48,927     $46,765
     Annuities                       15,360      15,469
     Other contract liabilities       4,842       5,133
                                    -------     -------
     Future policy benefits         $69,129     $67,367
                                    =======     =======

     Life insurance liabilities include reserves for death and endowment policy
     benefits, terminal dividends, premium deficiency reserves, and certain
     health benefits. Annuity liabilities include reserves for immediate
     annuities and non-participating group annuities. Other contract liabilities
     primarily consist of unearned premium and benefit reserves for group health
     products.


                                       24
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

6.   POLICYHOLDERS' LIABILITIES (CONTINUED)

     The following table highlights the key assumptions generally utilized in
     calculating these reserves:

<TABLE>
<CAPTION>

         PRODUCT                       MORTALITY                   INTEREST RATE               ESTIMATION METHOD
- ---------------------------     -------------------------     -------------------------     ------------------------
<S>                             <C>                               <C>                       <C>
Life insurance                  Generally rates                      2.5% to 7.5%           Net level premium
                                guaranteed in calculating                                   based on non-forfeiture
                                cash surrender values                                       interest rate

Individual immediate            1983 Individual                    3.5% to 11.25%           Present value of
annuities                       Annuity Mortality                                           expected future payments
                                Table with certain                                          based on historical
                                modifications                                               experience

Group annuities in              1950 Group                        3.75% to 17.35%           Present value of
payout status                   Annuity Mortality                                           expected future
                                Table with certain                                          payments
                                modifications                                               based on historical
                                                                                            experience

Other contract liabilities                     -                     5.3% to 7.0%           Present value of
                                                                                            expected future
                                                                                            payments
                                                                                            based on historical
                                                                                            experience
</TABLE>

     For the above categories, premium deficiency reserves are established, if
     necessary, when the liability for future policy benefits plus the present
     value of expected future gross premiums are insufficient to provide for
     expected future policy benefits and expenses and to recover any unamortized
     acquisition costs. A premium deficiency reserve has been recorded for the
     group single premium annuity business, which consists of limited-payment,
     long duration, traditional and non-participating annuities. A liability of
     $1,780 million and $1,645 million is included in "Future policy benefits"
     with respect to this deficiency for the years ended December 31, 1998 and
     1997, respectively.

       POLICYHOLDERS' ACCOUNT BALANCES at December 31, are as follows:

<TABLE>
<CAPTION>

                                                                 1998                1997
                                                               --------            --------
                                                                       (In Millions)
<S>                                                             <C>                <C>
   Individual annuities                                         $ 4,997            $  5,695
   Group annuities and guaranteed investment contracts           16,770              19,053
   Interest-sensitive life contracts                              3,566               3,258
   Dividend accumulations and other                               5,641               5,240
                                                                -------            --------
   Policyholders' account balances                              $30,974            $ 33,246
                                                                =======            ========

</TABLE>

 Policyholders' account balances for interest-sensitive life and
 investment-type contracts represent an accumulation of gross premium
 payments plus credited interest less withdrawals, expenses and mortality
 charges.

                                       25
<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

6.   POLICYHOLDERS' LIABILITIES (Continued)

     Certain contract provisions that determine the policyholder account
     balances are as follows:

     <TABLE>
     <CAPTION>
                                                                                 WITHDRAWAL/
                PRODUCT                       INTEREST RATE                   SURRENDER CHARGES
     ---------------------------------        -------------          -----------------------------------
     
     <S>                                      <C>                    <C>                      
     Individual annuities                      3.0% to 6.6%           0% to 8% for up to 8 years
     
     Group annuities                          5.0% to 13.4%           Contractually limited or subject
                                                                      to market value adjustment
     
     Guaranteed investment contracts          3.9% to 15.4%           Subject to market value withdrawal
     payout status                                                    provisions for any funds withdrawn
                                                                      other than for benefit responsive
                                                                      and contractual payments
     
     Interest-sensitive life contracts        4.0% to 6.5%            Various up to 10 years
     
     Dividend accumulations and other         3.0% to 4.5%                            --
     
     </TABLE>


                                       26

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

6.   POLICYHOLDERS' LIABILITIES (Continued)

     Unpaid Claims and Claim Adjustment Expenses. The following table provides
     a reconciliation of the activity in the liability for unpaid claims and
     claim adjustment expenses for property and casualty and accident and
     health insurance at December 31:

     <TABLE>
     <CAPTION>
                                                         1998                         1997                       1996
                                               --------------------------   --------------------------   ----------------------- 
                                                ACCIDENT       PROPERTY      ACCIDENT       PROPERTY      ACCIDENT     PROPERTY
                                               AND HEALTH    AND CASUALTY   AND HEALTH    AND CASUALTY   AND HEALTH AND CASUALTY
                                               ----------    ------------   ----------    ------------   ---------- ------------- 
                                                                                 (In Millions)
     <S>                                       <C>            <C>             <C>           <C>         <C>              <C>
     
     Balance at January 1                      $ 1,908        $ 2,956         $ 1,990       $ 3,076      $ 2,033         $ 3,053
       Less reinsurance recoverables               810            535              10           553           15             557
                                               -------        -------         -------       -------      -------         -------
     Net balance at January 1                    1,098          2,421           1,980         2,523        2,018           2,496
                                               -------        -------         -------       -------      -------         -------
                                                                                                                    
     Incurred related to:                                                                                            
                                                                                                                     
       Current year                              6,127          1,354           8,348         1,525        8,391           1,760
       Prior years                                   7           (194)            102           (91)         (66)            (25)
                                               -------        -------         -------       -------      -------         -------
                                                     
     Total incurred                              6,134          1,160           8,450         1,434        8,325           1,735
                                               -------        -------         -------       -------      -------         -------
     Paid related to:                                                                                                
                                                                                                                     
       Current year                              5,289            717           6,676           739        6,589             908
       Prior years                                 851            681           1,854           797        1,774             800
                                               -------        -------         -------       -------      -------         -------
                                                                                                                     
     Total paid                                  6,140          1,398           8,530         1,536        8,363           1,708
                                               -------        -------         -------       -------      -------         -------
                                                 
                                                                                                                     
     Net balance at December 31                  1,092          2,183           1,900         2,421        1,980           2,523
       Plus reinsurance recoverables                52            533               8           535           10             553
                                               -------        -------         -------       -------      -------         -------
     Balance at December 31                    $ 1,144        $ 2,716         $ 1,908       $ 2,956      $ 1,990         $ 3,076
                                               =======        =======         =======       =======      =======         =======
                                                                                                                  

     </TABLE>
                                                


     The Accident and Health balance at December 31 includes amounts
     attributable to the Company's discontinued HealthCare business: 1998 -
     $1,082; 1997 - $1,757 and 1996 - $1,750.

     In 1998 and 1997, the changes in provision for claims and claim adjustment
     expenses for property and casualty related to prior years are primarily
     driven by lower than anticipated losses for the Voluntary Auto line of
     business.

     The changes in provision for claims and claim adjustment expense for
     accident and health related to prior years are primarily due to such
     factors as changes in claim cost trends and an accelerated decline in the
     indemnity health business.

     The unpaid claims and claim adjustment expenses presented above consist of
     unpaid claim liabilities which include estimates for liabilities
     associated with reported claims and for incurred but not reported claims
     based, in part, on the Company's experience. Changes in the estimated cost
     to settle unpaid claims are charged or credited to the Consolidated
     Statement of Operations periodically as the estimates are revised.
     Accident and health unpaid claims liabilities for 1998, 1997 and 1996
     included above are discounted using interest rates ranging from 3.0%
     to 6.0%.

  
                                       27


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

7.    REINSURANCE

      The Company participates in reinsurance in order to provide greater
      diversification of business, provide additional capacity for future growth
      and limit the maximum net loss potential arising from large risks. Life
      reinsurance is accomplished through various plans of reinsurance,
      primarily yearly renewable term and coinsurance. Property-casualty
      reinsurance is placed on both a pro-rata and excess of loss basis.
      Reinsurance ceded arrangements do not discharge the Company or the
      insurance subsidiaries as the primary insurer. Ceded balances would
      represent a liability to the Company in the event the reinsurers were
      unable to meet their obligations to the Company under the terms of the
      reinsurance agreements. The Company periodically reviews the financial
      condition of its reinsurers and amounts recoverable therefrom, recording
      an allowance when necessary for uncollectible reinsurance.

      Reinsurance amounts included in the Consolidated Statements of Operations,
      excluding HealthCare, for the years ended December 31, were as follows:

                                          1998       1997       1996
                                        -------     ------    -------
                                                  (In Millions)     
Direct Premiums                         $9,615      $9,679    $10,690
  Reinsurance Assumed                       65          42         13
  Reinsurance Ceded                       (656)       (716)      (704)
                                        ------      ------    -------
Premiums                                $9,024      $9,005    $ 9,999
                                        ======      ======    =======
Policyholders' benefits ceded           $  519      $  530    $   571
                                        ======      ======    =======

      Reinsurance recoverables, included in "Other assets" in the Company's
      Consolidated Statements of Financial Position, at December 31, were as
      follows:

                                                      1998      1997
                                                     ------    ------
                                                       (In Millions)
Life insurance                                       $  620     $  685
Property-casualty                                       564        554
Other reinsurance                                        92         65
                                                     ------     ------
                                                     $1,276     $1,304
                                                     ======     ======

                                       28

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

8.    SHORT-TERM AND LONG-TERM DEBT

       Debt consists of the following at December 31:

SHORT-TERM DEBT                                                       
                                                 1998             1997
                                               -------           ------
                                                      (In Millions)  
Commercial paper                               $ 7,057           $4,268
Notes payable                                    2,164            2,151
Current portion of long-term debt                  861              355
                                               -------           ------
     Total short-term debt                     $10,082           $6,774
                                               =======           ======

The weighted average interest rate on outstanding short-term debt was
approximately 5.4% and 6.0% at December 31, 1998 and 1997, respectively.

The Company issues commercial paper primarily to manage operating cash flows and
existing commitments, meet working capital needs and take advantage of current
investment opportunities. Commercial paper borrowings are supported by various
lines of credit.

LONG-TERM DEBT

<TABLE>
<CAPTION>

DESCRIPTION                                          MATURITY DATES         RATE           1998        1997   
- -----------                                          --------------         ----           -----       ----
                                                                                             (In Millions) 
                                                                                                                   
<S>                                                  <C>                <C>               <C>         <C>

Floating rate notes ("FRN")                          1999 - 2005        4.04-14.00%(a)    $   729     $   324 
Long term notes                                      1999 - 2023         5.5% - 12%         1,318         910     
Zero coupon notes                                        1999              8.6% (b)           364         334     
Canadian dollar notes                                     -             7.0% - 9.125%           -         117     
Japanese yen notes                                   1999 - 2000          0.5% - 4.6%         160         178     
Swiss francs notes                                        -                3.875%               -         120     
Canadian dollar FRN                                      2003             5.25%-5.89%          96          96  
Surplus notes                                        2003 - 2025         6.875% - 8.3%        987         986     
Senior notes                                         1999 - 2006           6.375%             393          -     
Commercial paper backed by long-term
   credit agreements                                                                        1,500       1,500     
Other notes payable                                  1999 - 2017          4% - 7.5%            48          63     
                                                                                          -------     -------
Subtotal                                                                                    5,595       4,628     
    Less:  current portion of long-term debt                                                 (861)       (355)
                                                                                          -------     -------
Total long-term debt                                                                      $ 4,734     $ 4,273
                                                                                          =======     =======

</TABLE>

(a)  The Company issued an S&P 500 index linked note of $29 million in September
     of 1997. The interest rate on the note is based on the appreciation of the
     S&P 500 index, with a contractual cap of 14%. At December 31, 1998, this
     rate was 14%. Excluding this note, floating rate note interest rates were
     between 4.04% - 5.50%.

(b) The rate shown for zero coupon notes represents a level yield to maturity.


                                       29

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

8.    SHORT-TERM AND LONG-TERM DEBT (CONTINUED)

      Payment of interest and principal on the surplus notes issued after 1993,
      of which $686 million were outstanding at December 31, 1998, may be made
      only with the prior approval of the Commissioner of Insurance of the State
      of New Jersey.

      In order to modify exposure to interest rate and currency exchange rate
      movements, the Company utilizes derivative instruments, primarily interest
      rate swaps, in conjunction with some of its debt issues. The effect of
      these derivative instruments is included in the calculation of the
      interest expense on the associated debt, and as a result, the effective
      interest rates on the debt may differ from the rates reflected in the
      tables above. Floating rates are determined by formulas and may be subject
      to certain minimum or maximum rates.

      Scheduled principal repayments of long-term debt as of December 31, 1998,
      are as follows: $862 million in 1999, $560 million in 2000, $327 million
      in 2001, $1,816 million in 2002, $458 million in 2003 and $1,575 million
      thereafter.

      At December 31, 1998, the Company had $9,853 million in lines of credit
      from numerous financial institutions of which $8,330 million were unused.
      These lines of credit generally have terms ranging from one to five years.

      Interest expense for short-term and long-term debt is $920 million,
      $743 million and $618 million for the years ended December 31, 1998, 1997
      and 1996, respectively.

9.    EMPLOYEE BENEFIT PLANS

      PENSION AND OTHER POSTRETIREMENT PLANS

      The Company has funded non-contributory defined benefit pension plans
      which cover substantially all of its employees. The Company also has
      several non-funded non-contributory defined benefit plans covering
      certain executives. Benefits are generally based on career average
      earnings and credited length of service. The Company's funding policy is
      to contribute annually an amount necessary to satisfy the Internal
      Revenue Service contribution guidelines.

      The Company provides certain life insurance and health care benefits
      ("Other postretirement benefits") for its retired employees, their
      beneficiaries and covered dependents. The healthcare plan is
      contributory; the life insurance plan is non-contributory. Substantially
      all of the Company's employees may become eligible to receive benefits if
      they retire after age 55 with at least 10 years of service or under
      certain circumstances after age 50 with at least 20 years of continuous
      service. These benefits are funded as considered necessary by Company
      management.

      The Company has elected to amortize its transition obligation for other
      postretirement benefits over 20 years.


                                       30
<PAGE>



THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
9.    EMPLOYEE BENEFIT PLANS (CONTINUED)

       Prepaid and accrued benefit costs are included in "Other assets" and
       "Other liabilities", respectively, in the Company's Consolidated
       Statements of Financial Position. The status of these plans as of
       September 30, adjusted for fourth quarter activity, is summarized below:


<TABLE>
<CAPTION>
                                                                                                   OTHER
                                                                 PENSION BENEFITS           POSTRETIREMENT BENEFITS
                                                              ----------------------       ------------------------
                                                                1998           1997          1998           1997
                                                              --------       -------       -------         -------
                                                                   (In Millions)                (In Millions)
<S>                                                           <C>            <C>            <C>           <C>
CHANGE IN BENEFIT OBLIGATION:                                                            
Benefit obligation at the beginning of period                 $(5,557)       $(5,148)      $(2,128)        $(2,002)
Service cost                                                     (159)          (127)          (35)            (38)
Interest cost                                                    (397)          (376)         (142)           (149)
Plan participants' contributions                                    -              -           ( 6)             (4)
Amendments                                                        (58)             -             -              31
Actuarial losses                                                 (600)          (334)          (31)            (84)
Transfer to third party                                             -             32             -               -
Contractual termination benefits                                  (30)           (63)            -               -
Benefits paid                                                     485            460           128             117
Foreign currency changes                                            7             (1)            1               1
                                                              -------        -------       -------         -------
Benefit obligation at end of period                           $(6,309)       $(5,557)      $(2,213)        $(2,128)
                                                              =======        =======       =======         =======
                                                                                         
CHANGE IN PLAN ASSETS:                                                                   
                                                                                         
Fair value of plan assets at beginning of period              $ 8,489        $ 7,306       $ 1,354         $ 1,313
Actual return on plan assets                                      445          1,693           146             120
Transfer to third party                                            (4)           (32)           -                -
Contribution from pension plan                                      -              -            31              25
Employer contributions                                             25             16            13               9
Plan participants' contributions                                    -              -             6               4
Withdrawal under IRS Section 420                                  (36)           (35)            -               -
Benefits paid                                                    (485)          (460)         (128)           (117)
Foreign currency changes                                           (7)             1             -               -
                                                              -------        -------       -------         -------
Fair value of plan assets at end of period                    $ 8,427        $ 8,489       $ 1,422         $ 1,354
                                                              =======        =======       =======          =======
                                                                                       
FUNDED STATUS:                                                           
                                                                         
Funded status at end of period                                $ 2,118          $ 2,932     $  (791)         $  (774)
Unrecognized transition (asset) liability                        (554)            (661)        660              707
Unrecognized prior service cost                                   335              327           -                -
Unrecognized actuarial net gain                                  (813)          (1,644)       (353)            (364)
Effects of 4th quarter activity                                    (9)             (63)          2               33
                                                              -------          -------     -------          -------
Net amount recognized                                         $ 1,077          $   891     $  (482)         $  (398)
                                                              =======          =======     =======          =======
                                                                       
AMOUNTS RECOGNIZED IN THE STATEMENTS OF FINANCIAL
 POSITION CONSIST OF:
  Prepaid benefit cost                                        $  1,348        $  1,150     $     -        $       -
  Accrued benefit liability                                       (287)           (270)       (482)            (398)
  Intangible asset                                                   7               5           -                -    
  Accumulated other comprehensive income                             9               6           -                -
                                                              --------        --------     --------       ---------
Net amount recognized                                         $  1,077        $    891     $  (482)       $    (398)
                                                              ========        ========     ========       =========

</TABLE>
                                       31


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
9. EMPLOYEE BENEFIT PLANS (CONTINUED)

    The projected benefit obligation, accumulated benefit obligation and fair
    value of plan assets for the pension plan with accumulated benefit
    obligations in excess of plan assets were $384 million, $284 million and
    $0, respectively, as of September 30, 1998 and $319 million, $226 million
    and $ 0, respectively, as of September 30, 1997.

    The effects of fourth quarter activity are summarized as follows:

<TABLE>
<CAPTION>

                                                                                         OTHER
                                                    PENSION BENEFITS            POSTRETIREMENT BENEFITS
                                                ----------------------          -----------------------
                                                 1998            1997             1998           1997
                                                ------         -------           ------         ------
                                                                     (In Millions)              
<S>                                             <C>            <C>                <C>           <C>
Effect of IRS Section 420 transfer              $   -          $   (36)          $    -         $    -
Contractual termination benefits                  (14)             (30)               -              - 
Contribution from pension plan                      -                -                -             31
Employer contributions                              5                3                2              2
                                                -----          -------           ------         ------
Effects of 4th quarter activity                 $  (9)         $   (63)          $    2         $   33
                                                ======         =======           ======         ======
                                                                                     
</TABLE>

Pension plan assets consist primarily of equity securities, bonds, real estate
and short-term investments, of which $5,926 million and $6,022 million are
included in Separate Account assets and liabilities at September 30, 1998 and
1997, respectively.

Other postretirement plan assets consist of group and individual variable life
insurance policies, group life and health contracts, common stocks, U.S.
government securities and short-term investments. Plan assets include $1,018
million and $1,044 million of Company insurance policies and contracts at
September 30, 1998 and 1997, respectively.

Effective December 31, 1996, The Prudential Securities Incorporated Cash Balance
Plan (the "PSI Plan") was merged into The Retirement System for United States
Employees and Special Agents of The Prudential Insurance Company of America (the
"Prudential Plan"). The name of the merged plan is The Prudential Merged
Retirement Plan ("Merged Retirement Plan"). All of the assets of the Merged
Retirement Plan are available to pay benefits to participants and their
beneficiaries who are covered by the Merged Retirement Plan. The merger of the
plans had no effect on the December 31, 1996 results of operations.

During 1996, the Prudential Plan was amended to provide cost of living
adjustments for retirees. The effect of this plan amendment increased benefit
obligations and unrecognized prior service cost by $170 million at September 30,
1996. In addition, the Prudential Plan was amended to provide contractual
termination benefits to certain plan participants who were notified between
September 15, 1996 and December 31, 1998 that their employment had been
terminated. Costs related to these amendments are reflected below in contractual
termination benefits.

                                       32


<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
9. EMPLOYEE BENEFIT PLANS (CONTINUED)

   Net periodic benefit cost included in "General and administrative expenses"
   in the Company's Consolidated Statements of Operations for the years ended
   December 31, includes the following components:

<TABLE>
<CAPTION>

                                                                                                              OTHER
                                                          PENSION BENEFITS                           POSTRETIREMENT BENEFITS
                                                -----------------------------------            ------------------------------------
                                                   1998         1997          1996               1998          1997          1996
                                                -----------------------------------            ------------------------------------
                                                                                  (In Millions)
<S>                                             <C>           <C>           <C>                <C>           <C>           <C>
COMPONENTS OF NET PERIODIC BENEFITS COSTS:
Service cost                                    $   159       $   127       $   140            $    35       $    38       $    45
Interest cost                                       397           376           354                142           149           157
Expected return on plan assets                     (674)         (617)         (594)              (119)          (87)          (93)
Amortization of transition amount                  (106)         (106)         (107)                47            50            53
Amortization of prior service cost                   45            42            26                  -             -             -
Amortization of actuarial net (gain) loss             1             -             -               (13)          (13)            (3)
Curtailment gain (loss)                               5             -             -                  -             -            (9)
Contractual termination benefits                     14            30            63                  -             -             -
                                                -------       -------       -------            -------       -------        ------
Net periodic (benefit) cost                     $  (159)      $  (148)      $  (118)           $    92       $   137        $  150
                                                =======       =======       =======            =======       =======        ======
                                                                                                                  

</TABLE>

The assumptions at September 30, used by the Company to calculate the benefit
obligations as of that date and to determine the benefit cost in the subsequent
year are as follows:

<TABLE>
<CAPTION>
                                                                                                                OTHER
                                                           PENSION BENEFITS                      POSTRETIREMENT BENEFITS
                                                  ------------------------------         ----------------------------------------
                                                   1998        1997        1996              1998          1997          1996
                                                  ------------------------------         ----------------------------------------
<S>                                                <C>         <C>         <C>           <C>           <C>            <C>
WEIGHTED-AVERAGE ASSUMPTIONS:
Discount rate                                      6.50%       7.25%       7.75%            6.50%          7.25%         7.75%
Rate of increase in compensation levels            4.50%       4.50%       4.50%            4.50%          4.50%         4.50%
Expected return on plan assets                     9.50%       9.50%       9.50%            9.00%          9.00%         9.00%
Health care cost trend rates                         -           -           -           7.80-11.00%    8.20-11.80%   8.50-12.50%
Ultimate health care cost trend rate
    after gradual decrease until 2006                -           -           -              5.00%          5.00%         5.00%

</TABLE>


                                       33

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

9. EMPLOYEE BENEFIT PLANS (CONTINUED)

   Assumed health care cost trend rates have a significant effect on the
   amounts reported for the health care plan. A one-percentage point
   increase and decrease in assumed health care cost trend rates would have
   the following effects:

                                                               OTHER
                                                       POSTRETIREMENT BENEFITS
                                                       -----------------------
                                                                1998
                                                               ------
                                                           (In Millions)
   ONE PERCENTAGE POINT INCREASE
   Effect on total service and interest costs                  $  24
   Effect on postretirement benefit obligation                  (226)
                                                           
   ONE PERCENTAGE POINT DECREASE                           
   Effect on total service and interest costs                  $ (19)
   Effect on postretirement benefit obligation                   187
                                                           
   POSTEMPLOYMENT BENEFITS
   
   The Company accrues postemployment benefits primarily for life and health
   benefits provided to former or inactive employees who are not retirees. The
   net accumulated liability for these benefits at December 31, 1998 and 1997
   was $135 million and $144 million, respectively, and is included in "Other
   liabilities."
   
   OTHER EMPLOYEE BENEFITS
   
   The Company sponsors voluntary savings plans for employees (401(k) plans). 
   The  plans provide for salary reduction contributions by employees and 
   matching contributions by the Company of up to 3% of annual salary, 
   resulting in $54 million, $63 million and $57 million of expenses included in
   "General and  administrative expenses" for 1998, 1997 and 1996, respectively.
   
   DISCONTINUED OPERATIONS
   
   In connection with the disposal of the Company's HealthCare business, as more
   fully discussed in Note 3, the loss on disposal was reduced by an estimated
   curtailment gain of $30 million.
  
                                       34


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

10. INCOME TAXES

     The components of income tax expense for the years ended December 31, were
as follows:

                                           1998         1997         1996
                                          ------       ------       ------
                                                        (In Millions)
Current tax expense (benefit):                     
    U.S.                                  $  983       $  (14)      $  400
    State and local                           54           51          108
    Foreign                                  148           64           48
                                          ------       ------       ------
    Total                                 $1,185       $  101       $  556
                                          ======       ======       ======
                                                   
Deferred tax expense (benefit):                    
                                                   
    U.S.                                  $ (193)      $  269       $ (428)
    State and local                           (6)           4           (2)
    Foreign                                  (16)          33           54 
                                          ------       ------       ------
    Total                                 $ (215)      $  306       $ (376)
                                          ======       ======       ======
Total income tax expense                  $  970       $  407       $  180
                                          ======       ======       ======
                                                  

The Company's income tax expense for the years ended December 31, differs from
the amount computed by applying the expected federal income tax rate of 35% to
income from continuing operations before income taxes for the following reasons:

<TABLE>
<CAPTION>

                                                             1998        1997        1996
                                                            ------      ------      ------
                                                                   (In Millions)
<S>                                                         <C>         <C>         <C>
Expected federal income tax expense                         $  908      $  480      $  539
Equity tax (benefit)                                            75         (65)       (365)
State and local income taxes                                    31          37          69
Tax-exempt interest and dividend received deduction            (46)        (67)        (67)
Other                                                                               
                                                                 2          22           4
                                                            ------      ------      ------
Total income tax expense                                    $  970      $  407      $  180
                                                            ======      ======      ======
</TABLE>

                                       35

<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

10. INCOME TAXES (CONTINUED)

    Deferred tax assets and liabilities at December 31, resulted from the items
    listed in the following table:

                                                             1998       1997
                                                           -------    -------
                                                              (In Millions)
Deferred tax assets
     Insurance reserves                                    $ 1,584    $ 1,482
     Policyholder dividends                                    265        250 
     Net operating loss carryforwards                          260         80 
     Litigation related reserves                               104        178
     Employee benefits                                          63         42
     Other                                                     134        287 
                                                           -------    -------
     Deferred tax assets before valuation allowance          2,410      2,319 
     Valuation allowance                                       (13)       (18)
                                                           -------    -------
     Deferred tax assets after valuation allowance           2,397      2,301
                                                           -------    -------

Deferred tax liabilities
     Investments                                             1,414      1,867
     Deferred policy acquisition costs                       1,436      1,525
     Depreciation                                               64         36 
                                                           -------    -------
     Deferred tax liabilities                                2,914      3,428
                                                           -------    -------
Net deferred tax liability                                 $   517    $ 1,127
                                                           =======    =======

Management believes that based on its historical pattern of taxable income, the
Company will produce sufficient income in the future to realize its deferred tax
asset after valuation allowance. Adjustments to the valuation allowance will be
made if there is a change in management's assessment of the amount of the
deferred tax asset that is realizable. At December 31, 1998 and 1997,
respectively, the Company had federal life net operating loss carryforwards of
$540 million and $1,200 million, which expire by 2012. At December 31, 1998 and
1997, respectively, the Company had state non-life operating loss carryforwards
for tax purposes approximating $1,059 million and $800 million, which expire by
2018.

The Internal Revenue Service (the "Service") has completed all examinations of
the consolidated federal income tax returns through 1989. The Service has
examined the years 1990 through 1992. Discussions are being held with the
Service with respect to proposed adjustments. Management, however, believes
there are adequate defenses against, or sufficient reserves to provide for such
adjustments. The Service has begun their examination of the years 1993 through
1995.

                                       36


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

11.   STATUTORY EQUITY AND INCOME

      Applicable insurance department regulations require that the Company
      prepare statutory financial statements in accordance with statutory
      accounting practices prescribed or permitted by the New Jersey Department
      of Banking and Insurance. Statutory accounting practices primarily differ
      from GAAP by charging policy acquisition costs to expense as incurred,
      establishing future policy benefits reserves using different actuarial
      assumptions, not providing for deferred taxes, and valuing securities on a
      different basis. The Company's statutory net income, as filed with the New
      Jersey Department of Banking and Insurance was $1,247 million, $1,471
      million and $1,402 million for the years 1998, 1997 and 1996,
      respectively. Statutory capital and surplus, as filed, at December 31,
      1998 and 1997 was $8,536 million and $9,242 million, respectively.

12.   OPERATING LEASES

      The Company and its subsidiaries occupy leased office space in many
      locations under various long-term leases and have entered into numerous
      leases covering the long-term use of computers and other equipment. At
      December 31, 1998, future minimum lease payments under non-cancelable
      operating leases are estimated as follows:

                                                (In Millions)
               
               1999                               $   295
               2000                                   263
               2001                                   231
               2002                                   198
               2003                                   157
               Remaining years after 2003             753
                                                  -------
               Total                              $ 1,897
                                                  =======

      Amounts presented in the table above include operating leases relating to
      the Company's HealthCare business. See Note 3 for a discussion of the
      pending sale of this business. Amounts applicable to the HealthCare
      business are $65 million in 1999, $58 million in 2000, $52 million in
      2001, $45 million in 2002, $34 million in 2003 and $89 million thereafter.
      Rental expense incurred for the years ended December 31, 1998, 1997 and
      1996 was approximately $320 million, $352 million and $343 million,
      respectively.

13.   FAIR VALUE OF FINANCIAL INSTRUMENTS

      The estimated fair values presented below have been determined using
      available information and valuation methodologies. Considerable judgment
      is applied in interpreting data to develop the estimates of fair value.
      Accordingly, such estimates presented may not be realized in a current
      market exchange. The use of different market assumptions and/or estimation
      methodologies could have a material effect on the estimated fair values.
      The following methods and assumptions were used in calculating the
      estimated fair values (for all other financial instruments presented in
      the table, the carrying value approximates estimated fair value).

                                       37

<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- -------------------------------------------------------------------------------
13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

    FIXED MATURITIES AND EQUITY SECURITIES

    Estimated fair values for fixed maturities and equity securities, other
    than private placement securities, are based on quoted market prices or
    estimates from independent pricing services. Fair values for private
    placement securities are estimated using a discounted cash flow model
    which considers the current market spreads between the U.S. Treasury yield
    curve and corporate bond yield curve, adjusted for the type of issue, its
    current credit quality and its remaining average life. The fair value of
    certain non-performing private placement securities is based on amounts
    estimated by management.

    MORTGAGE LOANS ON REAL ESTATE

    The estimated fair value of the mortgage loan portfolio is primarily based
    upon the present value of the scheduled future cash flows discounted at
    the appropriate U.S. Treasury rate, adjusted for the current market spread
    for a similar quality mortgage. For certain non-performing loans, the
    estimated fair value is based upon the present value of expected future
    cash flows discounted at the appropriate U.S. Treasury rate adjusted for
    current market spread for a similar quality mortgage.

    POLICY LOANS

    The estimated fair value of policy loans is calculated using a discounted
    cash flow model based upon current U.S. Treasury rates and historical loan
    repayments.

    DERIVATIVE FINANCIAL INSTRUMENTS

    The fair value of swap agreements is estimated based on the present value
    of future cash flows under the agreements discounted at the applicable
    zero coupon U.S. Treasury rate and swap spread. The fair value of
    forwards, futures and options is estimated based on market quotes for a
    transaction with similar terms. The estimated fair value of loan
    commitments is derived by comparing the contractual stream of fees with
    such fee streams adjusted to reflect current market rates that would be
    applicable to instruments of similar type, maturity, and credit standing.

    POLICYHOLDERS' ACCOUNT BALANCES

    Estimated fair values of policyholders' account balances are derived by
    using discounted projected cash flows, based on interest rates being
    offered for similar contracts, with maturities consistent with those
    remaining for the contracts being valued. For interest sensitive life
    contracts, fair value approximates carrying value.

    DEBT

    The estimated fair value of short-term and long-term debt is derived by
    using discount rates based on the borrowing rates currently available to
    the Company for debt with similar terms and remaining maturities.

                                       38


<PAGE>


- -------------------------------------------------------------------------------
13. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

      The following table discloses the carrying amounts and estimated fair
      values of the Company's financial instruments at December 31:

<TABLE>
<CAPTION>

                                                                        1998                             1997
                                                               -----------------------          ------------------------
                                                               CARRYING     ESTIMATED           CARRYING     ESTIMATED
                                                                AMOUNT      FAIR VALUE           AMOUNT      FAIR VALUE
                                                               --------     ----------          --------     ----------
                                                                                     (In Millions)
<S>                                                            <C>           <C>                <C>           <C>
FINANCIAL ASSETS:
Other than trading:
  Fixed maturities:
        Available for sale                                     $ 80,158      $ 80,158           $ 75,270      $ 75,270
        Held to maturity                                         16,848        17,906             18,700        19,894
  Equity securities                                               2,759         2,759              2,810         2,810
  Mortgage loans on real estate                                  16,495        17,265             16,004        16,703
  Policy loans                                                    7,476         8,037              7,034         7,201
  Securities purchased under agreements to resell                 1,737         1,737                 -             - 
  Short-term investments                                          9,781         9,781             12,106        12,106
  Cash                                                            1,943         1,943              1,859         1,859
  Restricted Assets                                               2,366         2,366              1,835         1,835
  Separate Account assets                                        81,621        81,621             73,839        73,839
  Derivative financial instruments                                  132           135                 93            92

Trading:
  Trading account assets                                       $  8,888      $  8,888           $  6,347      $  6,347
  Broker-dealer related receivables                              10,142        10,142              8,442         8,442
  Derivative financial instruments                                  765           765                910           910
  Securities purchased under agreements to resell                 8,515         8,515              8,661         8,661
  Cash collateral for borrowed securities                         5,622         5,622              5,047         5,047
                                                                    
                                          
FINANCIAL LIABILITIES:
Other than trading:
  Policyholders' account balances                              $ 30,974      $ 31,940           $ 33,246      $ 34,201
  Securities sold under agreements to repurchase                  7,085         7,085                 85            85
  Cash collateral for loaned securities                           2,450         2,450              9,647         9,647
  Short-term and long-term debt                                  14,816        15,084             11,047        11,131
  Securities sold but not yet purchased                           2,215         2,215                  -             - 
  Separate Account liabilities                                   80,931        80,931             73,451        73,451
  Derivative financial instruments                                  390           391                100            99
                                   
Trading:
  Broker-dealer related payables                                $ 6,530      $  6,530           $  3,338      $  3,338
  Derivative financial instruments                                  725           725              1,019         1,019
  Securities sold under agreements to repurchase                 14,401        14,401             12,262        12,262
  Cash collateral for loaned securities                           4,682         4,682              4,470         4,470
  Securities sold but not yet purchased                           3,556         3,556              3,648         3,648


</TABLE>
                                        
                                       39


<PAGE>



THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

14. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS

    INTEREST RATE SWAPS

    The Company uses interest rate swaps to reduce market risks from changes in
    interest rates and to alter interest rate exposures arising from mismatches
    between assets and liabilities. Under interest rates swaps, the Company
    agrees with other parties to exchange, at specified intervals the difference
    between fixed-rate and floating-rate interest amounts calculated by
    reference to an agreed notional principal amount. Generally, no cash is
    exchanged at the outset of the contract and no principal payments are made
    by either party. Cash is paid or received based on the terms of the swap.
    These transactions are entered into pursuant to master agreements that
    provide for a single net payment to be made by one counterparty at each due
    date. The fair value of swap agreements is estimated based on the present
    value of future cash flows under the agreements, discounted at the
    applicable zero coupon U.S. Treasury rate and swap spread.

    If swap agreements meet the criteria for hedge accounting, net interest
    receipts or payments are accrued and recognized over the life of the swap
    agreements as an adjustment to interest income or expense of the hedged
    item. Any unrealized gains or losses are not recognized until the hedged
    item is sold or matures. Gains or losses on early termination of interest
    rate swaps are deferred and amortized over the remaining period originally
    covered by the swaps. If the criteria for hedge accounting are not met, the
    swap agreements are accounted for at market value with changes in fair value
    reported in current period earnings.

    FUTURES AND OPTIONS

    The Company uses exchange-traded Treasury futures and options to reduce
    market risks from changes in interest rates, to alter mismatches between the
    duration of assets in a portfolio and the duration of liabilities supported
    by those assets, and to hedge against changes in the value of securities it
    owns or anticipates acquiring. The Company enters into exchange-traded
    futures and options with regulated futures commissions merchants who are
    members of a trading exchange. The fair value of futures and options is
    based on market quotes for transactions with similar terms.

    Under exchange-traded futures, the Company agrees to purchase a specified
    number of contracts with other parties and to post variation margin on a
    daily basis in an amount equal to the difference in the daily market values
    of those contracts. Futures are typically used to hedge duration mismatches
    between assets and liabilities by replicating Treasury performance. Treasury
    futures move substantially in value as interest rates change and can be used
    to either modify or hedge existing interest rate risk. This strategy
    protects against the risk that cash flow requirements may necessitate
    liquidation of investments at unfavorable prices resulting from increases in
    interest rates. This strategy can be a more cost effective way of
    temporarily reducing the Company's exposure to a market decline than selling
    fixed income securities and purchasing a similar portfolio when such a
    decline is believed to be over.

    If futures meet hedge accounting criteria, changes in their fair value are
    deferred and recognized as an adjustment to the carrying value of the hedged
    item. Deferred gains or losses from the hedges for interest-bearing
    financial instruments are amortized as a yield adjustment over the remaining
    lives of the hedged item. Futures that do not qualify as hedges are carried
    at fair value with changes in value reported in current period earnings. The
    gains and losses associated with anticipatory transactions are not material.


                                       40
<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

14.   DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

      When the Company anticipates a significant decline in the stock market
      which will correspondingly affect its diversified portfolio, it may
      purchase put index options where the basket of securities in the index is
      appropriate to provide a hedge against a decrease in the value of the
      equity portfolio or a portion thereof. This strategy effects an orderly
      sale of hedged securities. When the Company has large cash flows which it
      has allocated for investment in equity securities, it may purchase call
      index options as a temporary hedge against an increase in the price of the
      securities it intends to purchase. This hedge permits such investment
      transactions to be executed with the least possible adverse market impact.

      Option premium paid or received is reported as an asset or liability and
      amortized into income over the life of the option. If options meet the
      criteria for hedge accounting, changes in their fair value are deferred
      and recognized as an adjustment to the hedged item. Deferred gains or
      losses from the hedges for interest-bearing financial instruments are
      recognized as an adjustment to interest income or expense of the hedged
      item. If the options do not meet the criteria for hedge accounting, they
      are fair valued, with changes in fair value reported in current period
      earnings.

      CURRENCY DERIVATIVES

      The Company uses currency derivatives, including exchange-traded currency
      futures and options, currency forwards and currency swaps to reduce market
      risks from changes in currency values of investments denominated in
      foreign currencies that the Company either holds or intends to acquire and
      to alter the currency exposures arising from mismatches between such
      foreign currencies and the U.S. Dollar.

      Under currency forwards, the Company agrees with other parties upon
      delivery of a specified amount of specified currency at a specified future
      date. Typically, the price is agreed upon at the time of the contract and
      payment for such a contract is made at the specified future date. Under
      currency swaps, the Company agrees with other parties to exchange, at
      specified intervals, the difference between one currency and another at a
      forward exchange rate and calculated by reference to an agreed principal
      amount. Generally, the principal amount of each currency is exchanged at
      the beginning and termination of the currency swap by each party. These
      transactions are entered into pursuant to master agreements that provide
      for a single net payment to be made by one counterparty for payments made
      in the same currency at each due date.

      If currency derivatives are effective as hedges of foreign currency
      translation and transaction exposures, gains or losses are recorded in
      "Accumulated other comprehensive income." If currency derivatives do not
      meet hedge accounting criteria, gains or losses from those derivatives are
      recognized in current period earnings.

      The tables below summarize the Company's outstanding positions by
      derivative instrument types as of December 31, 1998 and 1997. The amounts
      presented are classified as either trading or other than trading, based on
      management's intent at the time of contract inception and throughout the
      life of the contract. The table includes the estimated fair values of
      outstanding derivative positions only and does not include the changes in
      fair values of associated financial and non-financial assets and
      liabilities, which generally offset derivative notional amounts. The fair
      value amounts presented also do not reflect the netting of amounts
      pursuant to right of setoff, qualifying master netting agreements with
      counterparties or collateral arrangements.


                                       41

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

14. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

                        DERIVATIVE FINANCIAL INSTRUMENTS
                                DECEMBER 31, 1998
                                  (In Millions)

<TABLE>
<CAPTION>

                                    TRADING                    OTHER THAN TRADING                      TOTAL
                           -------------------------        -------------------------        -------------------------
                                          ESTIMATED                        ESTIMATED                        ESTIMATED
                           NOTIONAL       FAIR VALUE        NOTIONAL       FAIR VALUE        NOTIONAL       FAIR VALUE
                           --------       ----------        --------       ----------        --------       ----------
<S>                        <C>             <C>              <C>              <C>           <C>               <C>

Swaps:
  Assets                   $  4,564        $    309         $  2,200         $    96        $  6,764         $    405
  Liabilities                 4,734             274            3,065             349           7,799              623

Forwards:
  Assets                     45,651             282            1,004              14          46,655              296
  Liabilities                39,153             280            2,039              37          41,192              317

Futures:
  Assets                      3,272              61            1,786              23           5,058               84
  Liabilities                 4,371              47              531               5           4,902               52
              
Options:
  Assets                      8,310             113              130               2           8,440              115
  Liabilities                 6,388             124              213               -           6,601              124
                           --------        --------         --------         -------        --------         --------
Total:
  Assets                   $ 61,797        $    765         $  5,120         $   135        $ 66,917         $    900
                           ========        ========         ========         =======        ========         ========
  Liabilities              $ 54,646        $    725         $  5,848         $   391        $ 60,494         $  1,116
                           ========        ========         ========         =======        ========         ========

</TABLE>

                                       42


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

14. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

                        DERIVATIVE FINANCIAL INSTRUMENTS
                                DECEMBER 31, 1997
                                  (In Millions)

<TABLE>
<CAPTION>

                                      TRADING                  OTHER THAN TRADING                    TOTAL
                             --------------------------     -------------------------      --------------------------
                                            ESTIMATED                      ESTIMATED                       ESTIMATED
                             NOTIONAL       FAIR VALUE      NOTIONAL       FAIR VALUE      NOTIONAL        FAIR VALUE
                             --------       -----------     --------      -----------      --------        ---------- 
<S>                          <C>             <C>            <C>             <C>             <C>             <C>
Swaps:
  Assets                     $ 5,798         $  316         $ 1,446         $   67          $ 7,244         $  383
  Liabilities                  5,439            418           1,197             70            6,636            488
                                                                             

Forwards:
  Assets                      29,947            438           1,171             25           31,118            463 
  Liabilities                 29,985            461             687              8           30,672            469
                                                                              

Futures:
  Assets                       4,103             51              46             -             4,149             51
  Liabilities                  3,064             50           3,320             21            6,384             71
                                                                                

Options:
  Assets                       6,893            105             239             -             7,132            105
  Liabilities                  3,946             90             224             -             4,170             90
                             -------        -------         -------         ------          -------        -------
Total:
  Assets                     $46,741        $   910         $ 2,902         $   92          $49,643        $ 1,002
                             =======        =======         =======         ======          =======        =======
  Liabilities                $42,434        $ 1,019         $ 5,428         $   99          $47,862        $ 1,118
                             =======        =======         =======         ======          =======        =======

</TABLE>

CREDIT RISK

The current credit exposure of the Company's derivative contracts is limited to
the fair value at the reporting date. Credit risk is managed by entering into
transactions with creditworthy counterparties and obtaining collateral where
appropriate and customary. The Company also attempts to minimize its exposure to
credit risk through the use of various credit monitoring techniques. At December
31, 1998 and 1997 approximately 97% and 95%, respectively, of the net credit
exposure for the Company from derivative contracts is with investment-grade
counterparties.

Net trading revenues for the years ended December 31, 1998, 1997 and 1996
relating to forwards, futures and swaps were $67 million, $(5) million and $(13)
million; $59 million, $37 million and $(13) million; and $42 million, $32
million and $(11) million, respectively. Net trading revenues for options were
not material. Average fair values for trading derivatives in an asset position
during the years ended December 31, 1998 and 1997 were $1,165 million and $1,015
million, respectively, and for derivatives in a liability position were $1,140
million and $1,166 million, respectively. Of those derivatives held for trading
purposes at December 31, 1998, 63% of the notional amount consisted of interest
rate derivatives, 32% consisted of foreign currency derivatives, and 5%
consisted of equity and commodity derivatives. Of those derivatives held for
purposes other than trading at December 31, 1998, 60% of notional consisted of
interest rate derivatives, 31% consisted of foreign currency derivatives, and 9%
consisted of equity and commodity derivatives.


                                       43

<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

14. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (CONTINUED)

    OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS

    During the normal course of its business, the Company utilizes financial
    instruments with off-balance sheet credit risk such as commitments,
    financial guarantees, loans sold with recourse and letters of credit.
    Commitments include commitments to purchase and sell mortgage loans, the
    underfunded portion of commitments to fund investments in private placement
    securities, and unused credit card and home equity lines. In connection
    with the Company's commercial banking business, loan commitments for credit
    cards and home equity lines of credit include agreements to lend up to
    specified limits to customers. It is anticipated that commitment amounts
    will only be partially drawn down based on overall customer usage patterns,
    and, therefore, do not necessarily represent future cash requirements. The
    Company evaluates each credit decision on such commitments at least
    annually and has the ability to cancel or suspend such lines at its option.
    The total available lines of credit card and home equity commitments were
    $3.0 billion of which $2.2 billion remains available at December 31, 1998.

    Also in connection with the Company's investment banking activities, the
    Company enters into agreements with mortgage originators and others to
    provide financing on both a secured and unsecured basis. Aggregate
    financing commitments on a secured basis approximate $6.1 billion of which
    $3.3 billion remains available at December 31, 1998. Unsecured commitments
    approximate $65.0 million, the majority of which is outstanding at December
    31, 1998.

    Other commitments substantially include commitments to purchase and sell
    mortgage loans and the underfunded portion of commitments to fund
    investments in private placement securities. These mortgage loans and
    private commitments were $2.5 billion of which $1.8 billion remain
    available at December 31, 1998. Additionally, mortgage loans sold with
    recourse were $0.5 billion at December 31, 1998.

    The Company also provides financial guarantees incidental to other
    transactions and letters of credit that guarantee the performance of
    customers to third parties. These credit-related financial instruments have
    off-balance sheet credit risk because only their origination fees, if any,
    and accruals for probable losses, if any, are recognized until the
    obligation under the instrument is fulfilled or expires. These instruments
    can extend for several years and expirations are not concentrated in any
    period. The Company seeks to control credit risk associated with these
    instruments by limiting credit, maintaining collateral where customary and
    appropriate, and performing other monitoring procedures. At December 31,
    1998 these were immaterial.

15. DIVESTITURE

    On July 31, 1996, the Company sold a substantial portion of its Canadian
    Branch business to the London Life Insurance Company ("London Life"). This
    transaction was structured as a reinsurance transaction whereby London Life
    assumed total liabilities of the Canadian Branch equal to $3,291 million as
    well as a related amount of assets equal to $3,205 million. This transfer
    resulted in a reduction of policy liabilities of $3,257 million and a
    corresponding reduction in invested assets. The Company recognized an
    after-tax gain in 1996 of $116 million as a result of this transaction,
    recorded in "Realized investment gains, net."

16. CONTINGENCIES AND LITIGATION

    STOP-LOSS REINSURANCE AGREEMENT

    In connection with the sale in 1995 of its wholly-owned subsidiary
    Prudential Reinsurance Company ("Pru Re"), the Company's subsidiary,
    Gibraltar Casualty Insurance Company ("Gibraltar") entered into a stop-loss
    reinsurance agreement with Pru Re whereby Gibraltar has reinsured up to
    $375 million of the first $400 million of aggregate adverse loss
    development on reserves recorded by Pru Re at June 30, 1995. The Company
    has guaranteed

                                       44

<PAGE>

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

16. CONTINGENCIES AND LITIGATION (CONTINUED)


    Gibraltar's obligations arising under the stop-loss agreement subject to a
    limit of $375 million. Through December 31, 1998, Gibraltar has incurred
    $375 million in losses under the stop-loss agreement, including $90 million
    in 1998. Gibraltar has paid $197 million to Pru Re under the stop-loss
    agreement.

    ENVIRONMENTAL AND ASBESTOS-RELATED CLAIMS

    Certain of the Company's subsidiaries received claims under expired
    contracts which assert alleged injuries and/or damages relating to or
    resulting from toxic torts, toxic waste and other hazardous substances. The
    liabilities for such claims cannot be estimated by traditional reserving
    techniques. As a result of judicial decisions and legislative actions, the
    coverage afforded under these contracts may be expanded beyond their
    original terms. Extensive litigation between insurers and insureds over
    these issues continues and the outcome is not predictable. In establishing
    the liability for unpaid claims for these losses, management considered the
    available information. However, given the expansion of coverage and
    liability by the courts and legislatures in the past, and potential for
    other unfavorable trends in the future, the ultimate cost of these claims
    could increase from the levels currently established.

    MANAGED CARE REIMBURSEMENT

    The Company has reviewed its obligations under certain managed care
    arrangements for possible failure to comply with contractual and regulatory
    requirements. It is the opinion of management that adequate reserves have
    been established to provide for appropriate reimbursements to customers.

    REINSURANCE AND PARTICIPATION AGREEMENT

    The Company and a number of other insurers ("the Consortium") entered into
    a Reinsurance and Participation Agreement (the "Agreement") with MBL Life
    Assurance Corporation ("MBLLAC") and others, under which the Company and
    the other insurers agreed to reinsure certain payments to be made to
    contract holders by MBLLAC in connection with the plan of rehabilitation of
    Mutual Benefit Life Insurance Company. Under the agreement, the Consortium,
    subject to certain terms and conditions, will indemnify MBLLAC for the
    ultimate net loss sustained by MBLLAC on each contract subject to the
    Agreement. The ultimate net loss represents the amount by which the
    aggregate required payments exceed the fair market value of the assets
    supporting the covered contracts at the time such payments are due. The
    Company's share of any net loss is 30.55%. The Company has determined that
    it does not expect to make any payments to MBLLAC under the agreement. The
    Company concluded this after testing a wide range of potentially adverse
    scenarios during the rehabilitation period for MBLLAC. In November 1998,
    the Rehabilitation Court approved the sale of MBLLAC's individual life
    insurance and individual group annuity business to affiliates of SunAmerica
    Inc. Upon the end of the rehabilitation period, expected during 1999, the
    agreement will terminate.

    LITIGATION

    Various lawsuits against the Company have arisen in the course of the
    Company's business. In certain of these matters, large and/or indeterminate
    amounts are sought.

    Two putative class actions and approximately 320 individual actions were
    pending against the Company in the United States as of January 31, 1999
    brought on behalf of those persons who purchased life insurance policies
    allegedly because of deceptive sales practices engaged in by the Company
    and its insurance agents in violation of state and federal laws. Additional
    suits may be filed by individuals who opted out of the class action
    settlement described below. The sales practices alleged to have occurred
    are contrary to Company policy. Some of these cases seek substantial
    damages while others seek unspecified compensatory, punitive and treble
    damages. The Company intends to defend these cases vigorously.

                                       45

<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
16. CONTINGENCIES AND LITIGATION (CONTINUED)

    A Multi-State Life Insurance Task Force (the "Task Force"), comprised of
    insurance regulators from 29 states and the District of Columbia, was
    formed in April 1995 to conduct a review of sales and marketing practices
    throughout the life insurance industry. The Company was the initial focus
    of the Task Force examination. On July 9, 1996, the Task Force released its
    report on the Company's activities. The Task Force found that some sales of
    life insurance policies by the Company had been improper and that the
    Company's efforts to prevent such practices were not sufficiently
    effective. Based on the findings, the Task Force recommended, and the
    Company agreed to, various changes to its sales and business practices
    controls, and a series of fines allocated to all 50 states and the District
    of Columbia. In addition, the Task Force recommended a remediation program
    pursuant to which the Company would offer relief to the policyowners who
    were misled when they purchased permanent life insurance policies in the
    United States from 1982 to 1995.

    On October 28, 1996, the Company entered into a Stipulation of Settlement
    with attorneys for the plaintiffs in the consolidated class action lawsuit
    pending in a Multi-District Litigation proceeding in the U.S. District
    Court for the District of New Jersey. The class action suit involved
    alleged improprieties in connection with the Company's sale, servicing and
    operation of permanent life insurance policies from 1982 through 1995.
    Pursuant to the settlement, the Company agreed to provide certain
    enhancements and changes to the remediation program previously accepted by
    the Task Force, including some additional remedies. In addition, the
    Company agreed that it would incur a minimum cost of $410 million in
    providing remedies to policyowners under the program and, in specified
    circumstances, agreed to make certain other payments and guarantees. Under
    the terms of the settlement, the Company agreed to a minimum average cost
    per remedy of $2,364 for up to 330,000 claims remedied and also agreed to
    provide additional compensation to be determined by formula that will range
    in aggregate amount from $50 million to $300 million depending on the total
    number of claims remedied. At the end of the remediation program's claim
    evaluation process, the Court will determine how the additional
    compensation will be distributed.

    The terms of the remediation program described above were enhanced again in
    February 1997 pursuant to agreements reached with several states that had
    not previously accepted the terms of the program. These changes were
    incorporated as amendments to the above-described Stipulation of Settlement
    and related settlement documents, and the amended Stipulation of Settlement
    was approved as fair to class members by the U.S. District Court in March
    1997. By that point in time, the Company had entered into agreements with
    all 50 states and the District of Columbia pursuant to which each
    jurisdiction had accepted the remediation plan and the Company had agreed
    to pay approximately $65 million in fines, penalties and related payments.

    The decision of the U.S. District Court to certify a class in the
    above-described litigation for settlement purposes only and to approve the
    class action settlement as described in the amended Stipulation of
    Settlement was affirmed by the U.S. Court of Appeals for the Third Circuit
    in July 1998 although the issue of class counsel's fees was sent back to
    the U.S. District Court for review. The Supreme Court denied certiorari in
    January 1999, thereby making final the approval of the class action
    settlement.

    While the approval of the class action settlement is now final, the Company
    remains subject to oversight and review by insurance regulators and other
    regulatory authorities with respect to its sales practices and the conduct
    of the remediation program. The releases granted by the state insurance
    regulators pursuant to the individual state settlement agreements do not
    become final until the remediation program has been completed without any
    material changes to which those regulators have not agreed. The U.S.
    District Court has also retained jurisdiction as to all matters relating to
    the administration, consummation, enforcement and interpretation of the
    class action settlement.

    Pursuant to the state agreements and the amended Stipulation of Settlement,
    as approved by the U.S. District Court, the Company initiated its
    remediation program in 1997. The Company mailed packages and provided broad
    class notice to the owners of approximately 10.7 million policies eligible
    to participate in the remediation program in


                                       46


<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
16. CONTINGENCIES AND LITIGATION (CONTINUED)

    October 1996, informing them of their rights. Owners of approximately
    21,800 policies elected to be excluded from the class action settlement. Of
    those eligible to participate in the settlement, policyowners who believed
    they were misled were invited to file a claim through an Alternative
    Dispute Resolution ("ADR") process. The ADR process was established to
    enable the Company to discharge its liability to the affected policyowners.
    Policyowners who did not wish to file a claim in the ADR process were
    permitted to choose from options available under Basic Claim Relief, such
    as preferred rate premium loans, or annuities, mutual fund shares or life
    insurance policies that the Company will enhance.

    In January 1997 the U.S. District Court sanctioned and fined the Company
    $1 million for failure to properly implement procedures for its employees
    to retain documents in violation of the Courts' order that required the
    parties to preserve all documents relevant to the class action and
    remediation program. The Court ordered the Company to implement a document
    retention policy and directed that an independent expert be engaged to
    investigate the extent of document destruction and its impact on the
    remediation program.

    In response to the class notices, the owners of approximately 503,000
    policies indicated an interest in a Basic Claim Relief remedy. Management
    believes that costs associated with providing Basic Claim Relief will not
    be material to the Company's financial position or results of operations.

    The owners of approximately 1.16 million policies responded to the class
    notices by indicating an intent to file an ADR claim. All policyholders
    who responded were provided an ADR claim form for completion and
    submission. The ADR process generally requires that individual claim forms
    and files be reviewed by the Company and by one or more independent claim
    evaluators. Approximately 649,000 claim forms were completed and returned
    and approximately 591,000 decision letters had been mailed to claimants as
    of January 31, 1999. In many instances, claimants have the right to
    "appeal" the Company's decision to an independent reviewer. Management
    believes that the bulk of such appeals will be resolved in 1999.

    In 1996, the Company recorded in its Consolidated Statement of Operations
    the cost of $410 million as a guaranteed minimum remediation expense
    pursuant to the settlement agreement. Management had no better information
    available at that time upon which to make a reasonable estimate of losses
    associated with the settlement. In 1997, based on additional information
    derived from claim sampling techniques, the terms of the settlement and
    the number of claim forms received, management increased the estimated
    liability for the cost of remedying policyholder claims in the ADR process
    by $1.64 billion before taxes to approximately $2.05 billion before taxes,
    of which $1.80 billion was funded in a settlement trust. Management
    expressly noted that additional cost items were anticipated that could not
    be fully evaluated at that time.

    In 1998, based on estimates derived from an analysis of claims actually
    remedied (including interest), a sample of claims still to be remedied, an
    estimate of additional liability associated with the results of the
    investigation by the independent expert regarding the impact of document
    destruction on the ADR program, and an estimate of additional liabilities
    associated with a claimant's right to "appeal" the Company's decision,
    management increased the estimated liability for the cost of ADR remedies
    by $.51 billion before taxes to a total of $2.56 billion before taxes, all
    of which has been funded in a settlement trust as discussed in Note 4. The
    Company has also recorded from 1996 through 1998 additional charges to
    reflect ongoing administrative costs related to the ADR program,
    regulatory fines, penalties and related payments, litigation costs and
    settlements, and other fees and expenses associated with the resolution of
    sales practices issues. While management believes the foregoing provisions
    are reasonable estimates based on information currently available, the
    ultimate amount of the total cost of remedied policyholder claims and
    other related costs is dependent on complex and varying factors, including
    the relief options still to be chosen by claimants, the dollar value of
    those options, and the number and type of claims that may successfully be
    appealed.

                                       47
<PAGE>


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
16. CONTINGENCIES AND LITIGATION (CONTINUED)


    The Company's litigation is subject to many uncertainties, and given the
    complexity and scope, the outcomes cannot be predicted with precision. It
    is possible that the results of operations or the cash flow of the Company,
    in particular quarterly or annual periods, could be materially affected by
    an ultimate unfavorable outcome of the matters specifically discussed
    above. Management believes, however, that the ultimate resolution of all
    such matters, after consideration of applicable reserves, should not have a
    material adverse effect on the Company's financial position.


                                     ******


                                       48






<PAGE>
   
                DETERMINATION OF ACCUMULATION UNIT VALUES AND
                  OF THE AMOUNT OF MONTHLY VARIABLE ANNUITY
                                   PAYMENTS


A. ACCUMULATION UNIT VALUES

The value for each accumulation unit is computed as of the end of each valuation
period, also referred to in this section as business day.

On any given business day the value of accumulation units in each subaccount
will be determined by multiplying the value of a unit of that subaccount for the
preceding business day by the net investment factor for that subaccount for the
current business day. The net investment factor for any business day is
determined by dividing the value of the assets of the subaccount for that day by
the value of the assets of the subaccount for the preceding business day
(ignoring, for this purpose, changes resulting from new purchase payments and
withdrawals), and subtracting from the result the daily equivalent of the 1.2%
annual charge for expense risks and mortality risks. The value of the assets of
a subaccount is determined by multiplying the number of shares of the Series
Fund held by that subaccount by the net asset value of each share and adding the
value of dividends declared by the Series Fund but not yet paid.

B. DETERMINATION OF THE AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENT

When a contractowner elects to convert his or her variable account into monthly
variable annuity payments (an option available under the WVA-83 contract and the
VIP-84 contract, but NOT under the VIP-86 contract), the number of accumulation
units credited to him or her in each subaccount is first reduced to take into
account any applicable sales charge and any state premium taxes that may be
payable. The remaining accumulation units are then converted into a number of
annuity units of equal total value. As with accumulation units, the value of
each annuity unit also changes daily in accordance with the investment results
of the underlying Series Fund portfolio, after deduction of the daily equivalent
of the 1.2% annual charge for assuming expense and mortality risks.

Built into the value of annuity units is an assumption that the value of a
subaccount will grow by 3.5% each year. The reason for making this assumption is
explained more fully below. Accordingly, the value of an annuity unit always
increases by an amount that is somewhat less than the increase would have been
had this assumption not been made and decreases by an amount that is somewhat
greater than the decrease would have been had the assumption not been made. If
the value of the assets of a subaccount increases from one day to the next at a
rate equivalent to 4.7% per year (3.5% plus the annual charge of 1.2%), the
annuity unit value will not change. If the increase is less than at a rate
equivalent to 4.7% per year, the annuity unit value will decrease.

To determine the amount of each monthly variable annuity payment, the first step
is to refer to the Schedule of Annuity Rates set forth in the contract, relating
to the form of annuity selected by the contractowner. For example, for a man of
65 years of age who has selected a lifetime annuity with a guaranteed minimum of
120 payments, the applicable schedules currently provide that 1000 annuity units
will result in the payment each month of an amount equal to the value of 5.73
annuity units. (Due to the fact that the Schedule of Annuity Rates set forth in
the WVA-83 contract differs from that set forth in the VIP-84 contract, the
preceding sentence, as it applies to the WVA-83 contract, is modified. See item
4 under DIFFERENCES UNDER THE WVA-83 CONTRACT in this Statement of Additional
Information.) The amount of the first variable annuity payment made on the first
day of the month will be equal to that number of annuity units multiplied by the
annuity unit value at the end of that day, if a business day, or otherwise at
the end of the last preceding business day. The amount of each subsequent
variable annuity payment made on the first day of the month will be equal to the
number of annuity units multiplied by the annuity unit value at the end of the
last business day which is at least 5 days before the date the annuity payment
is due. (Under the WVA-83 contract, the amount of each variable annuity payment
made after the first payment is not determined as described in the preceding
sentence. See item 5 under DIFFERENCES UNDER THE WVA-83 CONTRACT in this
Statement of Additional Information.)

As stated above, the annuity unit values change in accordance with the
investment results of the subaccount but will not increase ??the amount of each
monthly variable payment unless the assets in the subaccount increase, after
deducting the 1.2% annual charge, at a rate greater than 3.5% per year. This
compensates for the fact that the annuity rate schedules have been constructed
upon the assumption that there will be a 3.5% annual increase in the value of
each subaccount. Although a different assumption could have been made, namely
that the subaccounts will not increase in value, this would have resulted in
smaller variable annuity payments immediately after annuitization and larger
payments in later years. This would have been advantageous for annuitants who
happen to live very long but disadvantageous to those who happen to die earlier.
Prudential believes that the 3.5% annual growth assumption is better for
contractowners, because it produces a better balance between early and later
variable annuity payments.




                                      C-1
    
<PAGE>



   

                QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
                          VARIABLE ANNUITY CONTRACTS


















                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                751 BROAD STREET
                          NEWARK, NEW JERSEY 07102-3777
                            TELEPHONE: (888) PRU-2888

    
<PAGE>
   
                                    PART C

                              OTHER INFORMATION

    
<PAGE>




   
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a)  FINANCIAL STATEMENTS

(1) Financial Statements of The Prudential Qualified Individual Variable
    Contract Account (Registrant) consisting of the Statements of Net Assets, as
    of December 31, 1998; the Statements of Operations for the year ended
    December 31, 1998; the Statements of Changes in Net Assets for the years
    ended December 31, 1998 and 1997; and the Notes relating
    thereto appear in the Statement of Additional Information (Part B of the
    Registration Statement).

(2) Consolidated Financial Statements of The Prudential Insurance Company of
    America (Depositor) and Subsidiaries, consisting of the Consolidated
    Statements of Financial Position as of December 31, 1998 and 1997; the
    Consolidated Statements of Operations, Consolidated Statements of Changes
    in Equity and Consolidated Statements of Cash Flows for the years ended
    December 31, 1998, 1997 and 1996 and the Notes relating thereto appear in
    the statement of additional information (Part B of the Registration
    Statement).

(b)  EXHIBITS

(1) Resolution of the Board of Directors of The Prudential Insurance Company
    of America establishing The Prudential Individual Variable Contract
    Account. (Note 6)

(2) Agreements for custody of securities and similar investments--Not Applicable

(3) (a)  Distribution Agreement between Pruco Securities Corporation
         (Underwriter) and The Prudential Insurance Company of America
         (Depositor). (Note 6)

    (b)  Proposed form of Selected Broker Agreement between Pruco Securities
         Corporation and brokers with respect to sale of the Contracts. (Note 6)

(4) (a) Individual Variable Annuity Contract (Form WVA-83). (Note 1)

    (b)  Special Page One to the Contract (Form WVA-83) for N.Y. State issues.
         (Note 1)

    (c)  Endorsement WVA2-83 to the Contract (Form WVA-83) for use in New Jersey
         issues. (Note 1)

    (d)  Special Page Six WVA-83 to the Contract (Form WVA-83) for use in
         Oklahoma issues. (Note 1)

    (e)  Special Page Six WVA-83 to the Contract (Form WVA-83) for use in
         California issues. (Note 1)

    (f)  Endorsement WVA 3-83 to the Contract (Form WVA-83) for use in Tennessee
         issues. (Note 1)

    (g)  Endorsement WVA 4-83 to the Contract (Form WVA-83 and VIP-84) for use
         in Texas issues. (Note 1)

    (h)  Endorsement WVA 5-83 to the Contract (Form WVA-83) for use in Texas and
         Pennsylvania issues. (Note 1)

    (i)  Endorsement WVA 6-83 to the Contract (Form WVA-83) for use in
         California issues. (Note 1)

    (j)  Endorsement COMB 84889-83 to the Contract (Form WVA -83) for use in the
         District of Columbia and in all states except New York. (Note 1)

    (k)  Endorsement COMB 84890-83 to the Contract (Form WVA-83) for use in the
         District of Columbia and in all states except New York. (Note 1)

    (l) Individual Variable Annuity Contract (Form VIP-84). (Note 1)

    (m) Special Page One to the Contract (Form VIP-84) (Note 1)

    (n)  Special Page Nineteen to the Contract (Form VIP-84) for use in N.Y.
         issues. (Note 1)

    (o)  Special Page Four to the Contract (Form VIP-84) for use in Oklahoma
         issues. (Note 1)

    (p)  Special Page Seven to the Contract Form VIP-84) for use in Oklahoma
         issues. (Note 1)

    (q)  Special Page Four to the Contract (Form VIP-84) for use in California
         issues. (Note 1)

    (r)  Special Page Seven to the Contract (Form VIP-84) for use in California
         issues. (Note 1)

    (s)  Endorsement VIP 3-84 to the Contract (Form VIP-84) for use in
         California issues. (Note 1)

    (t)  Endorsement WVA 13-85 to the Contract (Form VIP-84) for use in all the
         states so that the Contract meets Internal Revenue Code Section 72(s)
         requirements for an annuity. (Note 1)

    (u)  Endorsement VIP 6-85 to the Contract (Form VIP-84) for use in all the
         states so that the Contract meets Internal Revenue Code Section 72(s)
         requirements for an annuity. (Note 1)

                                      C-1
    
<PAGE>

   
    (v) Individual Variable Annuity Contract (Form VIP-86). (Note 1)

    (w) Individual Variable Annuity Contract (Form VIP-86) revised. (Note 6)

    (x)  Special Jacket VIP-86 MN to the VIP-86 Contract for use in Minnesota
         issues. (Note 1)

    (y)  Special Jacket VIP-86 Y to the VIP-86 Contract for use in New York
         issues. (Note 1)

    (z)  Special Contract Data Page 3 (VIP-86) (MIN) to the VIP-86 Contract for
         use in Minnesota issues. (Note 1)

    (aa) Special Page 7 (VIP-86) Y to the VIP-86 Contract for use in New York
         issues. (Note 1)

    (bb) Special Page 7 (VIP-86) (OK) to the VIP-86 Contract for use in
         Oklahoma issues. (Note 1)

    (cc) Special Page 8 (VIP-86)(SC) to the VIP-86 Contract for use in South
         Carolina issues. (Note 1)

    (dd) Special Page 8 (VIP-86) (OK) to the  VIP-86 Contract for use in
         Oklahoma issues. (Note 1)

    (ee) Special Page 11 (VIP-86) (WA) to the VIP-86 Contract for use in
         Washington issue. (Note 1)

    (ff) Special Page 11 (VIP-86) (SC) to the VIP-86  Contract for use in
         South Carolina issues. (Note 1)

    (gg) Special Page 11 (VIP-86) (Y) to the VIP-86 Contract for use in New
         York issues. (Note 1)

    (hh) Special Page 11 (VIP-86) (WI) to the VIP-86 Contract for use in
         Wisconsin issues. (Note 1)

    (ii) Special Page 12 (VIP-86) (SC) to the VIP-86 Contract for use in South
         Carolina and Washington issues. (Note 1)

    (jj) Special Page 12 (VIP-86) (Y) to the VIP-86 Contract for use in New
         York issue. (Note 1)

    (kk) Special Page 12 (VIP-86) (WI) to the VIP-86 Contract for use in
         Wisconsin issues. (Note 1)

    (ll) Special Page 13 (VIP-86) (WI) to the VIP-86 Contract for use in
         Wisconsin issues. (Note 1)

    (mm) Special Page 14 (VIP-86) (WI) to the VIP-86 Contract for use in
         Wisconsin issues. (Note 1)

    (nn) Special Back Jacket Page 18 (VIP-86) (MN) to the VIP-86 Contract for
         use in Minnesota issues. (Note 1)

    (oo) Special Back Jacket Page 18 (VIP-86) (Y) to the VIP-86 Contract for use
         in New York issues. (Note 1)

    (pp) Special Jacket VIP-86-P to the VIP-86 Contract for use in
         Pennsylvania issues. (Note 1)

    (qq) Special Contract Data Page 3 (VIP-86) (MA) to the VIP-86 Contract for
         use in Massachusetts issues. (Note 1)

    (rr) Special Page 7 (VIP-86) (PA) to the  VIP-86 Contract for use in
         Pennsylvania issues. (Note 1)

    (ss) Special Blank Page 13 (VIP-86) (MA) to the VIP-86 Contract for use
         in Massachusetts issues. (Note 1)

    (tt) Special Bank Page 17 VIP-86-P  to the VIP-86 Contract for use in
         Pennsylvania issues. (Note 1)

    (uu) Special Back Jacket Page 18 VIP-86-P to the VIP-86 Contract for use
         in Pennsylvania issues. Note 1)

    (vv) Endorsement VIP 501-86 to the VIP-86 Contract for use in all states
         except Delaware, Georgia, Massachusetts, North Dakota, New York,
         Oregon, Pennsylvania and Texas. (Note 1)

    (ww) Endorsement COMB 84890-83 to the VIP-86 Contract for use in Montana.
         (Note 1)

    (xx) Endorsement Certification PLI 254-86 to the VIP-86 Contract for use in
         Pennsylvania. (Note 1)

    (yy) Endorsement PLI 288-88 to the VIP-86 Contract. (Note 1)

    (zz) Waiver of Withdrawal Charges rider ORD 88753-92 to the VIP-86
         Contract (at issue). (Note 1)

   (aaa) Waiver of Withdrawal Charges rider ORD 88754-92 to the VIP-86 Contract
         (after issue).
         (Note 1)

   (bbb) Spousal Continuance Rider ORD 89011-93 to the VIP contract (at issue).
         (Note 2)

   (ccc) Endorsement altering the Assignment provision ORD 83922-95. (Note 3)

(5) Application for Individual Variable Annuity Contract:

    (a)  Application Form VA 200 ED 07/83 for Individual Variable Annuity
         Contract (Form WVA-83). (Note 1)

    (b)  Application Form VA 200 ED 5/84 for Individual Variable Annuity
         Contract (Form VIP-84) for use by Prudential representatives. (Note 1)

    (c)  Application Form VA 200B ED 5/84 for Individual Variable Annuity
         Contract (Form VIP-84) for use by Prudential Securities account
         executives. (Note 1)

                                      C-2
    
<PAGE>


   
    (d)  Revised Application Form VA 200 ED 5/84-Non-Qualified for Individual
         Annuity Contract (Form VIP-84) for use by Prudential representatives.
         (Note 1)

    (e)  Revised Application Form VA 200 Ed. 5/86-Non-Qualified. (Note 1)

    (f)  Revised Application Form VA 200 Ed. 5/86-Non-Qualified (NY) for use in
         New York. (Note 1)

    (g)  Revised Application Form VA 200 Ed. 9/86-Non-Qualified. (Note 1)

    (h)  Revised Application Form VA 200 Ed. 11/86-Non-Qualified. (Note 1)

    (i)  Application for VIP annuity contract ORD 87348-92. (Note 2)

    (j)  Supplement to the Application for a VIP contract ORD 87454-92. (Note 2)

(6) (a)  Charter of The Prudential Insurance Company of America, as amended
         November 14, 1995. (Note 8)

    (b)  By-Laws of The Prudential  Insurance  Company of America,  as amended
         May. 12, 1998 (Note 5)

(7)      Contract of reinsurance in connection with variable annuity
         contract--Not Applicable.

(8)      Other material contracts performed in whole or part after the date the
         registration statement is filed:

    (a)  Purchase  Agreement  between The Prudential Series Fund, Inc. and The
         Prudential Insurance Company of America. (Note 1)

(9)      Opinion of Counsel and consent to its use as to legality of the
         securities being registered. (Note 1)

(10)     Written consent of PricewaterhouseCoopers LLP, independent accountants.
         (Note 1)

(11)     All financial statements omitted from Item 23, Financial
         Statements--Not Applicable.

(12)     Agreements in consideration for providing initial capital between or
         among Registrant, Depositor, Underwriter, or initial contract
         owners--Not Applicable

(13)     Schedule of Performance Computations. (Note 1)

(14)     Powers of Attorney.

    (a)  F. Agnew, F. Becker, M. Berkowitz, R. Carbone, J. Cullen, C. Davis, R.
         Enrico, A. Gilmour, W. Gray, J. Hanson, G. Hiner, C. G. Kelley, Horner,
         B. Malkiel, A. Ryan, I. Schmertz, C. Sitter, D. Staheli, R. Thomson, J.
         Unruh, P. Vagelos, S. Van Ness, P. Volcker, J. Williams. (Note4)

    (b) A. Piszel. (Note 7)

- ----------
(Note 1)    Filed herewith.

(Note 2)  Incorporated by reference to Post-Effective Amendment No. 19 to
          Form S-6, Registration No. 2-80897, filed April 28, 1994.

(Note 3)  Incorporated by reference to Post-Effective Amendment No. 20 to Form
          S-6, Registration No. 2-80897, filed February 27, 1995.

(Note 4) Incorporated by reference to Post-Effective  Amendment No. 10 to Form
         S-1, Registration No. 33-20083, filed April 9, 1998, on behalf of
         The Prudential Variable Contract Real Property Account.

(Note 5) Incorporated by reference to Form S-6, Registration No. 333-64957,
         filed on September 30, 1998, on behalf of The Prudential Variable
         Appreciable Account.

(Note 6) Incorporated by reference to Post-Effective  Amendment No. 24 to Form
         N-4, Registration No. 2-80897, filed on April 24, 1998, on behalf of
         The Prudential Individual Variable Contract Account.

(Note 7) Incorporated by reference to Post-Effective  Amendment No. 4 for Form
         N-4, Registration No. 333-23271, filed February 23, 1999, on behalf
         of The Prudential Discovery Select Group Variable Contract Account.

(Note 8) Incorporated by reference to Post-Effective Amendment No. 9 to Form
         S-1, Registration No. 33-20083, filed April 9, 1997 on behalf of the
         Prudential Variable Contract Real Property Account.

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Incorporated by reference to The Prudential Individual Variable Contract Account
statement of additional information under "Directors and Officers" which is
located in Part B of this Registration Statement.

                                      C-3
    
<PAGE>

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

The Prudential Insurance Company of America ("Prudential") is a mutual life
insurance company organized under the laws of New Jersey.

Prudential may be deemed to control The Prudential Series Fund, Inc., a Maryland
corporation which is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, all the shares of
which are held by Prudential and the following separate accounts which are
registered as unit investment trusts under the Investment Company Act of 1940:
The Prudential Variable Appreciable Account, The Prudential Individual Variable
Contract Account (Registrant), The Prudential Qualified Individual Variable
Contract Account, The Prudential Variable Contract Account-24 (separate accounts
of Prudential); the Pruco Life PRUvider Variable Appreciable Account, the Pruco
Life Variable Universal Account, The Pruco Life Variable Insurance Account, the
Pruco Life Variable Appreciable Account, the Pruco Life Single Premium Variable
Life Account, the Pruco Life Flexible Premium Variable Annuity Account, the
Pruco Life Single Premium Variable Annuity Account (separate accounts of Pruco
Life Insurance Company ("Pruco Life"); the Pruco Life of New Jersey Variable
Insurance Account, the Pruco Life of New Jersey Variable Appreciable Account,
the Pruco Life of New Jersey Single Premium Variable Life Account, and the Pruco
Life of New Jersey Single Premium Variable Annuity Account (separate accounts of
Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"). Pruco
Life, an insurance company organized under the laws of Arizona, is a direct
wholly-owned subsidiary of Prudential. Pruco Life of New Jersey, an insurance
company organized under the laws of New Jersey, is a direct wholly-owned
subsidiary of Pruco Life, and an indirect wholly-owned subsidiary of Prudential.

Prudential holds all of the shares of Prudential's Gibraltar Fund, a Delaware
corporation, in three of its separate accounts. Each of these separate account
is a unit investment trust registered under the Investment Company Act of 1940.
Prudential's Gibraltar Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940.

In addition, Prudential may also be deemed to be under common control with The
Prudential Variable Contract Account-2, The Prudential Variable Contract
Account-10, and The Prudential Variable Contract Account-11, separate accounts
of Prudential, all of which are registered as open-end, diversified, management
investment companies under the Investment Company Act of 1940.

The subsidiaries of Prudential and short descriptions of each are listed under
Item 25 of Post-Effective Amendment No .34 to the Form N-IA Registration
Statement for The Prudential Series Fund, Inc., Registration No. 2-80896, filed
on or about April 24, 1998, the text of which is hereby incorporated.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of March 29, 1999 there were 246,114 contractowners of non-qualified
contracts offered by the Registrant.

ITEM 28. INDEMNIFICATION

The Registrant, in conjunction with certain affiliates, maintains insurance on
behalf of any person who is or was a trustee, director, officer, employee or
agent of the Registrant, or who is or was serving at the request of the
Registrant as a trustee, director, officer, employee or agent of such other
affiliated trust or corporation, against any liability asserted against and
incurred by him or her arising out of his or her position with such trust or
corporation.

New Jersey, being the state of organization of Prudential Insurance Company of
America ("Prudential"), permits entities organized under its jurisdiction to
indemnify directors and officers with certain limitations. The relevant
provisions of New Jersey law permitting indemnification can be found in Section
14A:3-5 of the New Jersey Statutes Annotated. The text of Prudential's By-law
27, which relates to indemnification of officers and directors, is incorporated
by reference to Exhibit (8)(ii) of Post-Effective Amendment No. 12 to Form N-4,
Registration No. 33-25434, filed April 30, 1997, on behalf of the Prudential
Individual Variable Contract Account.

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

ITEM 29. PRINCIPAL UNDERWRITERS

     (a) Pruco Securities Corporation also acts as principal underwriter for the
         Pruco Life PRUvider Variable Appreciable Account, the Pruco Life
         Variable Universal Account, the Pruco Life Variable Insurance Account,
         the Pruco Life Variable Appreciable Account, the Pruco Life Single
         Premium Variable Life Account, the Pruco Life Flexible 


                                       C-4
    
<PAGE>

   
         Premium Variable Annuity Account, the Pruco Life Single Premium
         Variable Annuity Account, the Pruco Life of New Jersey Variable
         Insurance Account, the Pruco Life Account, the Pruco Life of New
         Jersey Single Premium Variable Annuity Account, The Prudential
         Variable Appreciable Account, ThePrudential Qualified Individual
         Variable Contract Account, the Prudential Annuity Plan Account, the
         Prudential Investment Plan Account, the Prudential Annuity Plan
         Account-2, Prudential's Gibraltar Fund, and The Prudential Series
         Fund, Inc.

     (b) Incorporated by Reference to item 29(b) of Post-Effective No. 13 to
         Form N-4, Registration No. 33-25434 filed April 24, 1998, on behalf of
         The Prudential Individual Variable Contract Account.

     (c) Not Applicable

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books or other documents required to be maintained by Section
31(a) of the 1940 Act and the rules promulgated thereunder are maintained by the
Registrant through The Prudential Insurance Company of America, 751 Broad
Street, Newark, New Jersey 07102-3777.

ITEM 31. MANAGEMENT SERVICES

Summary of any contract not discussed in Part A or Part B of the Registration
Statement under which management-related services are provided to the
Registrant--Not applicable.

ITEM 32. UNDERTAKINGS

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

     (b) Registrant undertake to include either (1) as part of any application
         to purchase a contract offered by the prospectus, a space that an
         applicant can check to request a statement of additional information or
         (2) a postcard or similar written communication affixed too or included
         in the prospectus that the applicant can remove to send for a statement
         of additional information.

     (c) Registrant undertakes to deliver any statement of additional
         information and any financial statements required to be made available
         under this Form promptly upon written or oral request.

     (d) The Prudential Insurance Company of America ("Prudential") hereby
         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 Prudential.

                                      C-5
    
<PAGE>

   
                                  SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that this Amendment is filed solely for one or more of the purposes
specified in Rule 485(b)(1) under the Securities Act of 1933 and that no
material event requiring disclosure in the prospectus, other than one listed in
Rule 485(b)(1), has occurred since the effective date of the most recent
Post-Effective Amendment to the Registration Statement which include a
prospectus and has caused this Registration Statement to be signed on its behalf
by the undersigned thereunto duly authorized, and its seal hereunto affixed and
attested, all in the city of Newark and the State of New Jersey, on this 23rd
day of April, 1999
    
    SEAL:

                  THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

                                          (Registrant)

    BY:                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                                          (Depositor)


Attest: /s/  THOMAS C. CASTANO                  *By: /s/ ESTHER H. MILNES
       ------------------------------------         ---------------------------
         THOMAS C. CASTANO                            ESTHER H. MILNES
         ASSISTANT SECRETARY                          VICE PRESIDENT AND ACTUARY

     As required by the Securities Act of 1933, this Post-Effective Amendment
No. 26 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.

        SIGNATURE AND TITLE
        -------------------
      /s/ *                                            April 23, 1999
    ---------------------------------------
         ARTHUR F. RYAN
         CHAIRMAN OF THE BOARD, PRESIDENT,
         AND CHIEF EXECUTIVE OFFICER


   
      /s/ *
    ---------------------------------------
         ANTHONY S. PISZEL
         VICE PRESIDENT AND CONTROLLER
         (CHIEF ACCOUNTING OFFICER)
    


      /s/ *
    ---------------------------------------
         FRANKLIN E. AGNEW
         DIRECTOR


      /s/ *                                     *By: /s/ THOMAS C. CASTANO
    ---------------------------------------         ---------------------------
         RICHARD J. CARBONE                           THOMAS C. CASTANO
         SENIOR VICE PRESIDENT AND                    (ATTORNEY-IN-FACT)
         PRINCIPAL FINANCIAL OFFICER                  


      /s/ *
    ---------------------------------------
         FRANKLIN K. BECKER
         DIRECTOR


      /s/ *
    ---------------------------------------
         JAMES G. CULLEN
         DIRECTOR


      /s/ *
    ---------------------------------------
         CAROLYNE K. DAVIS
         DIRECTOR

                                      C-6

<PAGE>
   
         SIGNATURE AND TITLE
         -------------------


      /s/ *
    ---------------------------------------      April 23, 1999
         ROGER A. ENRICO
         DIRECTOR


      /s/ *
    ---------------------------------------
         ALLAN D. GILMOUR
         DIRECTOR


      /s/ *                                       By: /s/ THOMAS C. CASTANO
    ---------------------------------------         ---------------------------
         WILLIAM H. GRAY, III                         THOMAS C. CASTANO
         DIRECTOR                                     (ATTORNEY-IN-FACT)


      /s/ *
    ---------------------------------------
         JON F. HANSON
         DIRECTOR


      /s/ *
    ---------------------------------------
         GLEN H. HINER, JR.
         DIRECTOR


      /s/ *
    ---------------------------------------
         CONSTANCE J. HORNER
         DIRECTOR


      /s/ *
    ---------------------------------------
         GAYNOR N. KELLEY
         DIRECTOR


      /s/ *
    ---------------------------------------
         BURTON G. MALKIEL
         DIRECTOR


      /s/ *
    ---------------------------------------
         IDA F.S. SCHMERTZ
         DIRECTOR


      /s/ *
    ---------------------------------------
         CHARLES R. SITTER
         DIRECTOR


      /s/ *
    ---------------------------------------
         DONALD L. STAHELI
         DIRECTOR


      /s/ *
    ---------------------------------------
         RICHARD M. THOMSON
         DIRECTOR


                                      C-7
    
<PAGE>


   
      /s/ *
    ---------------------------------------
         JAMES A. UNRUH
         DIRECTOR


      /s/ *                                       April 23, 1999
    ---------------------------------------
         ROY VAGELOS, M.D.
         DIRECTOR


      /s/ *                                  
    ---------------------------------------
         STANLEY C. VAN NESS
         DIRECTOR


      /s/ *                                  
    ---------------------------------------
         PAUL A. VOLCKER
         DIRECTOR


      /s/ *                                       *By: /s/ THOMAS C. CASTANO
    ---------------------------------------           -------------------------
         JOSEPH H. WILLIAMS                             THOMAS C. CASTANO
         DIRECTOR                                       (ATTORNEY-IN-FACT)


                                      C-8
    
<PAGE>


                                EXHIBIT INDEX
                                -------------


   
  (4)(a) through 4(ee) and 4(gg) through 4(mmm)
          Qualified Individual Variable Annuity Contract
          (Form WVQ-83)    with Endorsements and Special Pages
    

  (5)(a) through (f)
          Application for Qualified Individual Variable Annuity Contracts
          (all Forms)

  (8)(a)  Purchase Agreement between The Prudential Series Fund, Inc.
          and The Prudential Insurance Company of America

  (9)     Opinion of Counsel and consent to its use as to legality of
          the securities being registered

  (10)    Written consent of PricewaterhouseCoopers LLP, independent accountants

  (13)    Schedule of Performance Computations



                                      C-9





                                   The Prudential Insurance Company of America
                                   Corporate Office
                                   Newark, New Jersey
                           
   Annuitant                                                     Contract Number

Annuity Date                                                     Contract Date


      Agency




We will make monthly payments starting on the annuity date we show in the window
of this page. We make this promise subject to all the provisions of this
contract.

Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or there is
a claim, just see one of our representatives or get in touch with one of our
offices.

The benefits, payments and values under this contract are on a variable basis.
They will reflect the investment experience of the separate account to which the
contract is related; they are subject to change both up and down and are not
guaranteed as to dollar amount except as provided under the Death of Annuitant
and Settlement Provisions for the Beneficiary sections.

We make this contract available in connection with pension, profit-sharing and
annuity purchase plans and Individual Retirement Annuities intended to qualify
for special Federal Income Tax treatment under the Internal Revenue Code of
1954, as amended. In order to obtain or retain that tax treatment the exercise
of rights and privileges under the contract by the Annuitant may be restricted.
We assume no responsibility for determining that a particular plan or Individual
Retirement Annuity is so qualified, that a particular Annuitant is eligible
under the plan or Individual Retirement Annuity or that the exercise of such
rights and privileges complies with the restrictions.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value on the date your request is received,
without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.


     /s/ Isabella L. Kirchner                /s/ [ILLEGIBLE]
             Secretary                           President


Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on annuity date. Payment as stated upon death before annuity
date. Purchase payments payable during Annuitant's lifetime until annuity date.
                                                     

<PAGE>



                                CONTRACT SUMMARY

We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.

This is a contract to provide income to begin on the annuity date. If on the
annuity date the Annuitant is entitled to payment and no other settlement has
been chosen, we will make monthly payments to the Annuitant for as long as he or
she lives, with 120 payments assured. But if the contract value available to
provide the payment is less than $2000 or the amount of the initial payment
would be less than $20, we will, instead, pay the cash value in one sum. We
describe other options we offer on pages 9 and 10.

Purchase payments may be made at any time until the annuity date. Their amounts
may be restricted by the retirement arrangement that covers the Annuitant. The
purchase payments will be allocated as you direct to one or more of the
subaccounts of The Prudential Qualified Individual Variable Contract Account, a
variable contract account of Prudential, created under New Jersey law and
registered as a unit investment trust under the Investment Company Act of 1940.
Assets of these subaccounts are invested in shares of corresponding Portfolios
of The Prudential Series Fund, Inc. For example, assets of the Bond Subaccount
are invested in shares of the Bond Portfolio. Assets of the Money Market
Subaccount are invested in shares of the Money Market Portfolio, etc. Your
interests in subaccounts are recorded in terms of full or fractional units of
the selected subaccount(s).

On the annuity date, if an annuity option takes effect, your subaccount units
are converted to subaccount annuity units. These units will be used to provide
an annuity under the Variable Payout Provisions. We explain this on pages 9 and
10. The dollar value of the subaccount units and the amount of annuity payments
will vary in accord with the investment results of the subaccounts.

We describe below the amount payable, if any, at the death of the Annuitant.
Subject to the retirement arrangement that covers the Annuitant, proceeds which
may arise from the Annuitant's death before the annuity date may be paid to the
beneficiary in cash; or they may be applied by the beneficiary for a variable
payout option. We describe the available choices under Settlement Provisions for
the Beneficiary on page 13.

You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:

o    You may change the beneficiary under it.
o    You may surrender it for its cash value.
o    You may make withdrawals.
o    You may transfer shares from one subaccount to another.

                               DEATH OF ANNUITANT

We will pay the beneficiary the proceeds promptly if we receive due proof that
the Annuitant died before the annuity date.

If the Annuitant dies before his or her 65th birthday, proceeds will be the
greater of (a) the sum of all of the purchase payments paid to us, minus any
withdrawals made, or (b) the amount of your variable account (which we define on
page 4) as of the date we receive due proof of death. If the Annuitant dies on
or after his 65th birthday, the proceeds will be your variable account as of the
date we receive due proof of death.

If the Annuitant dies on or after the annuity date, the settlement then in
effect will govern whether and to whom we will make any payment(s).


Page 2 (WVQ-83)
<PAGE>




                                  CONTRACT DATA


     ANNUITANT'S SEX AND ISSUE AGE M--35
                 DATE OF BIRTH     MAR. 15, 1947
    
   ANNUITANT        JOHN DOE                  XXX XXX XXX     CONTRACT NUMBER
ANNUITY DATE        JUL. 1, 2012              JUL. 1, 1982    CONTRACT DATE




                        
                    R-NK 1

        

       BENEFICIARY      CLASS 1       MARY DOE, WIFE
                        CLASS 2       ROBERT DOE, SON










                     ALLOCATION OF INITIAL PURCHASE PAYMENT

                                   SUBACCOUNTS
                                   
                     BOND                               XX%
                     MONEY MARKET                       XX%
                     COMMON STOCK                       XX%
                     AGGRESSIVELY MANAGED FLEXIBLE      XX%
                     CONSERVATIVELY MANAGED FLEXIBLE    XX%











THE MAINTENANCE CHARGE IS $30.00 ANNUALLY. WE EXPLAIN THIS ON PAGE 7.

SERVICE OFFICE -- PLEASE DIRECT ANY COMMUNICATIONS ABOUT THIS CONTRACT TO: THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, P.O. BOX 2925, PHOENIX, ARIZONA 85062



                                                    
<PAGE>




                               GENERAL PROVISIONS

Definitions.--We define here some of the words and [ILLEGIBLE] used all through
this contract. We explain others, defined here, in other parts of the text.
                                                            
[ILLEGIBLE] Period.--The period of time between the [ILLEGIBLE] Date and the
Annuity Date.

[ILLEGIBLE] or Contract Anniversary.--The same day and month as the Contract
Date in each later year.

[ILLEGIBLE]: If the contract date is March 9, 1983, the first [ILLEGIBLE] is
March 9, 1984. The second is March 9, 1985 and so on.
                                                            
[ILLEGIBLE]--The person whose name is in the window of [ILLEGIBLE] page. He or
she need not be the owner.

[ILLEGIBLE] Date.--The date the first annuity payment is due.

Business Day--A day on which the New York Stock Exchange is open for business.
                                                              
[ILLEGIBLE]--Variable Account less any withdrawal [ILLEGIBLE] that apply.

[ILLEGIBLE].--Internal Revenue Code of 1954, as amended.     

[ILLEGIBLE] Year.--A year which starts on the Contract Date [ILLEGIBLE]
anniversary.
                                                            
[ILLEGIBLE].--If the contract date is March 9, 1983, the first [ILLEGIBLE] Year
starts then and ends on March 8, 1984. [ILLEGIBLE] starts on March 9, 1984 and
ends on March 8, 1985 and so on. 

[ILLEGIBLE].--The Contract Date.
                                                            
Prudential Qualified Individual Variable Contract [ILLEGIBLE] (the Account).--A
separate account of Prudential [ILLEGIBLE] as a unit investment trust under the
Investment [ILLEGIBLE] Act of 1940.
                                                            
Prudential Series Fund, Inc. (the Fund).--A mutual [ILLEGIBLE] separate
portfolios one or more of which you choose as the underlying investment for your
[ILLEGIBLE]. The Fund was established by Prudential. It is [ILLEGIBLE] under the
Investment Company Act of 1940, as [ILLEGIBLE], as an open-end diversified
management [ILLEGIBLE] company.
                                                            
[ILLEGIBLE] Office.--The Prudential office designated by it to [ILLEGIBLE]
contracts such as this. Its mailing address is the [ILLEGIBLE] shown on the
Contract Data page, unless [ILLEGIBLE] specifies another address by notice to
you.

[ILLEGIBLE].--A  division of the Account the assets of  [ILLEGIBLE]  invested in
the shares of a corresponding [ILLEGIBLE] of the Fund.

Account Annuity Unit.--A measure used to find the [ILLEGIBLE]     
of a variable annuity monthly payment.                            

Subaccount Annuity Unit Value.--The monthly income produced by one Subaccount
Annuity Unit.

Subaccount Unit.--A measure used to find the value of your interest in a
subaccount during the accumulation period.

Subaccount Unit Value.--The dollar value of one Subaccount Unit of a specified 
subaccount.

Variable Account.--Your Variable Account for any business day is found by
multiplying your number of units in each subaccount by the Subaccount Unit Value
at the end of that business day and then adding the results.

We, Our, and Us.--Prudential.

You and Your.--The owner of the contract.

Contract Modifications.--Only a Prudential officer may agree to modify this
contract, and then only in writing.

Change of Annuity Date.--Unless the retirement arrangement that covers you
provides otherwise, not later than the present annuity date, you may ask us to
change that date to another date. We must have your request in writing at our
Service Office and in a form which meets our needs. You must send the contract
to us to be endorsed. We will change the date to one you ask for in your
request. But, unless we consent, it may not be before the first of the next
month after the Annuitant's 75th birthday or such earlier date as may be
required by law or the applicable retirement plan. Further, unless we consent,
you may not make more than one change in the annuity date.

Ownership and Control.--Unless we endorse this contract to say otherwise:(1) the
owner of the contract is the Annuitant; and (2) while the Annuitant is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.

We will mail to the owner, at least once in each Contract Year after the first,
a statement with respect to all subaccounts in which the owner has an interest.
The statement will be as of a date not more than two months before the date of
mailing. It will show the number of Units credited and the value per Unit. We
will also send the owner a statement of the investments of the portfolios of the
Fund, the underlying investment mediums for this contract.

Currency.--Any money we pay, or which is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.

                            (Continued on Next Page)

                                                                  



<PAGE>



                         GENERAL PROVISIONS (continued)

Misstatement of Age or Sex.--lf the Annuitant's or any contingent annuitant's
stated date of birth or sex or both are not correct, we will change each benefit
and the amount of each annuity payment to that which the purchase payment would
have bought for the correct date of birth and sex. Also, we will adjust the
amount of any payments we have already made. Here is how we will do it: (1) We
will deduct any overpayments, with interest at 5% a year, from any payment(s)
due then or later. (2) We will add any underpayments, with interest at 5% a
year, to the next payment we make after we receive proof of the correct date of
birth and sex.

Incontestability.--We will not contest this contract except for non-payment of
the purchase payment due on the contract date.
                                                                  
Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If the Annuitant is living on the annuity
date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum.

Asset Charges. --We will apply a Mortality Risk Charge and an Expense Risk
Charge daily at effective annual rates of 0.8% and 0.4%, respectively, on the
value of the net assets of each subaccount attributable to Subaccount Units and
Subaccount Annuity Units credited to contracts like this one. We guarantee that
the expense and mortality results of the Account will not adversely affect the
dollar amounts of values, benefits or payments under this contract.

Changes by Prudential.--We reserve the right, upon 90 days notice to you, to:

(1) change the minimum amount requirements specified for purchases, withdrawals
and transfers in the Variable Accumulation Provisions;
                                                               
(2) refuse to accept any request for purchase;                   
                              
(3) increase the amount of the Annual Maintenance charge (see page 7);

(4) change the number of Subaccount Units credited, change or discontinue
subaccounts, change to a different variable contract account, or substitute fund
shares in the account (see page 8);

(5) Make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
compromise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing the proportional
interest of the Annuitant. The instruction form may be signed and returned to
us. If for any meeting there are Fund shares for which we have not received
voting instruction, this is what we will do. We will vote Fund shares on each
matter in the same proportion as we vote the Fund shares held in the subaccount
for which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four-year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00A.M. to 2:00P.M. in
our office at the Secretary's address shown here. After this contract has been
in force for one year, you may vote either in person or by mail. We will send
you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, you must be at least 18 years
old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable during the accumulation period. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.




                              
Page 5 (WVQ-83)               

                              

<PAGE>

                                  BENEFICIARY

[ILLEGIBLE] the retirement arrangement under which the [ILLEGIBLE] is purchased
provides otherwise, you may [ILLEGIBLE] or change a beneficiary. Your request
must be in [ILLEGIBLE] and in a form which meets our needs. It will take
[ILLEGIBLE] only when we file it at our Service Office; this will be [ILLEGIBLE]
you send the contract to us to be endorsed, if we ask [ILLEGIBLE] to do so. Then
any previous beneficiary's interest will [ILLEGIBLE] as of the date of the
request. It will end then even if [ILLEGIBLE] Annuitant is not living when we
file the request. [ILLEGIBLE] otherwise stated, we will make payment to the
beneficiary only if the Annuitant dies before the annuity [ILLEGIBLE]. Any
beneficiary's interest is subject to the rights of assignee of whom we know.

[ILLEGIBLE] a beneficiary is designated, any relationship shown [ILLEGIBLE] the
Annuitant, unless otherwise stated. To show [ILLEGIBLE], we may use numbered
classes, so that the class [ILLEGIBLE] first priority is called class 1, the
class with next [ILLEGIBLE] is called class 2, and so on. When we use numbered
classes, these statements apply to beneficiaries [ILLEGIBLE] the form states
otherwise:

One who survives the Annuitant will have the right to [ILLEGIBLE] only if no one
in a prior class survives the [ILLEGIBLE].

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the annuity date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living. we owe him the proceeds. If none of them is living, we owe the
Annuitant's estate.

Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.

                        VARIABLE ACCUMULATION PROVISIONS

Purchase Payments.--Purchase payments made through payroll deductions or similar
arrangements with an employer must be at a rate of at least $300 during any
[ILLEGIBLE] month period. Any other purchase payment must be at [ILLEGIBLE] $50.

[ILLEGIBLE] purchase payment will be allocated to the [ILLEGIBLE] accounts in
accord with your instructions. If, after you [ILLEGIBLE] made at least one
purchase, we receive a purchase payment without instructions, we will allocate
it in the [ILLEGIBLE] proportions as the most recent purchase payment
[ILLEGIBLE] made.

[ILLEGIBLE] 1: On the Contract Date you make a $1500 [ILLEGIBLE] and allocate
$500 to each of Subaccounts A, B [ILLEGIBLE] C. Later in the year you send us a
$900 purchase payment, but you don't tell us how it is to be applied.
[ILLEGIBLE] on the most recent purchase, the one made on the [ILLEGIBLE] Date,
we would make a $300 purchase for each Subaccounts A, B and C.

[ILLEGIBLE] of Subaccount Units.--This contract will be [ILLEGIBLE] with the
number of Subaccount Units which [ILLEGIBLE] from dividing (1) the amount of any
purchase payment allocated to a subaccount by (2) that subaccount's Unit Value
for the Business Day the purchase is made. The first purchase payment will be
credited on the first Business Day which is the later of: (a) the Contract Date.
(b) the date the purchase payment is received at the Service Office, or (c) the
date we approve the request for the contract, or on a later date if you request
and we agree. For any purchase payment after the first, the shares will be
credited on the first Business Day not earlier than the day we receive it at our
Service Office or on a later day if you request and we agree.

Subaccount Unit Value.--The Unit Value for a subaccount for any Business Day is
found by multiplying that subaccount's Net Investment Factor for that day by its
Unit Value for the last preceding Business Day. A subaccount Net Investment
Factor for any Business Day equals (1) 1.00 plus the rate of net investment
income earned, after provision for taxes, for the period from the end of the
last preceding Business Day to the end of the current Business Day: plus (2) the
rate of asset value changes in the subaccount during the same period, minus (3)
the rates of the Mortality Risk Charge and the Expense Risk Charge (which we
describe on Page 5)

                            (Continued on Next Page)



Page 6 (WVQ-83)






<PAGE>



                  VARIABLE ACCUMULATION PROVISIONS (continued)

[ILLEGIBLE] number of calendar days involved. The Unit Value [ILLEGIBLE] and
therefore the total value of shares of [ILLEGIBLE] credited to you at any time
and the number [ILLEGIBLE] Units provided by a given purchase payment
[ILLEGIBLE] will vary. They will increase or decrease in accord [ILLEGIBLE]
investment results of the subaccount.

[ILLEGIBLE] of each Subaccount Unit was set at $1.00 on [ILLEGIBLE] the first
purchase payment was applied to that [ILLEGIBLE].

[ILLEGIBLE] Maintenance Charge.--On each contract [ILLEGIBLE] before the annuity
date or at the time of total [ILLEGIBLE] we will deduct a maintenance charge
from your [ILLEGIBLE] account. The amount of the charge is shown on [ILLEGIBLE]
of this contract. If on any contract anniversary [ILLEGIBLE] Subaccount Units
credited to this contract in [ILLEGIBLE] one subaccount, we will divide the
charge [ILLEGIBLE] the subaccounts on a pro-rata basis, according to [ILLEGIBLE]
value of each subaccount. We will [ILLEGIBLE] enough of your Subaccount Units or
fractions of a [ILLEGIBLE] Unit to pay this charge.

[ILLEGIBLE].--Unless restricted by provisions of the [ILLEGIBLE] arrangement
that covers you, you may be able [ILLEGIBLE] withdrawals from your variable
account on or [ILLEGIBLE] the annuity date. To make a withdrawal you must
[ILLEGIBLE] in writing in a form which meets our needs. If you [ILLEGIBLE] a
partial withdrawal, we will liquidate as many full [ILLEGIBLE] Subaccount Units
as may be needed to [ILLEGIBLE] the amount asked for and any charges that apply.
[ILLEGIBLE] tell us the amount and the subaccount from [ILLEGIBLE] it is to be
withdrawn. Our consent is needed for a [ILLEGIBLE] withdrawal if (1) the amount
to be withdrawn is [ILLEGIBLE] $300; or (2) it would reduce the value of your
[ILLEGIBLE] a subaccount to less than $300.

[ILLEGIBLE] for a total withdrawal you must send the [ILLEGIBLE] to us. We will
liquidate all the subaccount units [ILLEGIBLE] to the contract. After deducting
the Annual [ILLEGIBLE] Charge and the sales charges, if any, we will [ILLEGIBLE]
balance. Any amount withdrawn will be paid within [ILLEGIBLE] calendar days
after the date we receive your request [ILLEGIBLE] Service Office.

[ILLEGIBLE] Charges (Deferred Contingent Sales [ILLEGIBLE]).--Although no sales
charges are deducted from purchase payments when they are made, your purchase
payments may be subject to a sales charge upon withdrawal. Earnings are not
subject to sales charges.

[ILLEGIBLE] contract year, any amount(s) withdrawn which do [ILLEGIBLE] total
exceed 10% of your variable account, valued as [ILLEGIBLE] date of the first
withdrawal in that year, will [ILLEGIBLE] not a sales charge. A sales charge may
be imposed on [ILLEGIBLE] withdrawn in excess of this 10% limitation.

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made. Purchase payments are considered to be withdrawn on a
first-in, first-out basis. Withdrawals are considered to consist of purchase
payments until an amount equal to your aggregate purchase payments has been
withdrawn.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accordance with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal, the rate is 8%.

If the duration from the start of the contract
year of purchase payment to the start of the       The charge
contract year of withdrawal is.........            rate is...

One year .....................................        7%
Two years ....................................        6%
Three years ..................................        5%
Four years ...................................        4%
Five years ...................................        3%
Six years ....................................        2%
Seven years ..................................        1%
Eight years or more ..........................        0%

In determining the amount of sales charge, if any. we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so, even if that purchase payment was to a
different subaccount than that from which withdrawal is being made or if the
shares being withdrawn are no longer subject to a withdrawal charge. Depending
on the amount of the withdrawal, one or more sales charge rates may be used if
the withdrawal is of purchase payments made in more than one contract year.


Example.--

Year                                    Transaction
- ----                                    -----------

Contract year one                  --Payment of $500 in the Money Market 
                                        Subaccount 
Contract year two                  --Payment of $400 in the Bond
                                        Subaccount 
Contract year four                 --Payment of $800 in the Common
                                        Stock Subaccount

In contract year four the contractholder requests a partial withdrawal of $600
from his Common Stock subaccount. The value of his variable account is $2000 on
the date of withdrawal. This means that $200 (10%} may be withdrawn without a
sales charge. A sales charge is required on the remaining $400 being withdrawn.

                            (Continued on Next Page)



Page 7 (WVQ-83)




<PAGE>



                  VARIABLE ACCUMULATION PROVISIONS {continued)

To determine the sales charge we assume that $500 of the amount being withdrawn
is the payment made to the Money Market Subaccount in contract year one. The
remaining $100 being withdrawn is assumed to be a part of the $400 payment made
to the Bond Subaccount in contract year two. Of the first $500 payment we have
seen that $200 (10% of $2000) may be withdrawn without sales charge. A 5% sale
charge is due on the withdrawal of the other $300 of the payment (5% X
$300=$15). The $100 portion being withdrawn from the second payment requires a
6% sales charge (6% X $100=$6). Thus the total sales charge for withdrawing $600
in year four is $21.

Transfers.--You may transfer all or part of your interest in a subaccount to one
or more of the other subaccounts. To make a transfer you must ask us in writing
in a form which meets our needs. You must tell us the amount to be transferred
and the names of the subaccounts involved. Our consent is needed for the
transfer if (1) the amount to be transferred is less than the smaller of $300
and your interest in the subaccount, (2) the value of any of your Units
remaining in the subaccount after the transfer would be less than $300, or (3)
four or more transfers of subaccount Units have been made under your contract in
the current Contract Year. The transfer will be made on !the first Business Day
after we receive your request.

To make the transfer this is what we will do. First, we will liquidate, without
charge, the number of your Units in the subaccount from which the transfer is to
be made to provide the amount requested. Then, we will use that amount to
purchase Units in the subaccount to which the transfer is to be made. The result
will be that, while the contract value will not change, the total number of
Subaccount Units credited to this contract may increase or decrease depending on
the Subaccount Unit Values. The original purchase date of record used to
determine the rate of charge for any future withdrawal is not changed as a
result of a transfer

Example.--You ask that we transfer $600 from Subaccount A to Subaccount B. The
Subaccount A Unit Value is $10 on the date of the transfer. We would liquidate
60 shares in Subaccount A to provide the $600 The share value in Subaccount B on
the date of the transfer is $5. The $600 will buy 120 shares in Subaccount B. If
the Unit Value were $20, the $600 would buy only 30 Units. While the number of
Units may have changed on the date of transfer, their value remained the same,
$600.

Changing the Number of Subaccount Units Credited.--We have the right to change
the number of Subaccount Units if we deem the Subaccount Unit Value to be either
so large or so small as to not be in your best interest, or ours. If we make
such a change, the amount of the Variable Account will not change.

Substitution of Shares.--Shares of another registered, open-end investment
company may be substituted for the shares held in the account or any subaccount
or to be purchased by future purchase payments or transfers if (1) shares in the
subaccount are no longer available for purchase or (2) in our judgement further
investment in such shares is no longer appropriate for the subaccount.

Effect of Loss of Tax-Qualified Status or Failure to Qualify.--If, for any
reason, you become ineligible to participate or cease to be a participant in the
pension, profit-sharing or annuity purchase plan or Individual Retirement
Annuity in connection with which this contract is issued, or if the plan is
discontinued or loses its taxqualified status, we may refuse to accept further
purchase payments under this contract. In addition, if this happens before the
annuity date, we may terminate the contract, and liquidate all the subaccount
units credited to the contract. After deducting the Annual Maintenance Charge
and the sales charge, if any, we will pay you the balance within seven calendar
days after the termination of the contract.

Page 8 (WVQ-83)

<PAGE>




                           VARIABLE PAYOUT PROVISIONS

Choosing an Option.--Subject to the retirement arrangement that covers you, you
may be able to have the amount of your variable account on the Annuity Date paid
to the Annuitant as an annuity under one of the options we describe below. But,
for any annuity settlement, we may first deduct from that amount any charge for
state premium taxes. And under some conditions we may also deduct an
Annuitization Charge as described on page 10. An Annuitization Charge may be
deducted if the Annuity Date is within three years of the Contract Date, or if
the form of annuity chosen is Option D.

Conditions.--Your right to make this choice is subject to a11 these conditions:
(1) You must ask for the option in writing and in a form which meets our needs.
(2) You must send the contract to us to be endorsed. (3) You must give us proof
of the date of birth of the Annuitant and of any contingent annuitant. (4) We
must have your request, the contract and the proof(s) of the date(s) of birth
before the Annuity Date.

Your choice of an option will take effect on the Annuity Date but only if: (1)
the Annuitant is living on that date; (2) the contingent annuitant, if any. is
living on that date; (3) the first payment under the option will be at least
$20; (4) the amount applied to provide the option is at least $2000, and (5) you
do not void the choice by making a later choice before the Annuity Date.

When No Option Chosen.--If no choice of Option A, C or D, which we describe
below, takes effect on the annuity date, settlement under Option B will become
effective. But the conditions described in the preceding paragraph will apply.
And we have the right to require proof of the date of birth of the Annuitant
before we make payment.

Options Described.--The first payment under these options is due on the annuity
date.

Option A (Life Annuity).--We will make monthly payments for as long as the
Annuitant lives. They will end with the last one due before the Annuitant's
death.

Option B (Life Annuity, 10-Year Minimum Period).--We will make monthly payments
for as long as the Annuitant lives, with 120 monthly payments assured. Unless
otherwise stated. if the Annuitant dies before the 120th payment is payable, we
will pay the residue in one sum to the Annuitant's designated beneficiary or
estate. We will compute the residue as of the first Business Day on or after the
date the Annuitant died. We will adjust the amount for the change in the
Subaccount Annuity Unit Value between; that Business Day and the first Business
Day on or after which we receive at our Service Office the items we need for
settlement. But if the Annuitant dies after the due date of the last payment
certain. no further payments will be due.

Option C (Joint and Survivor Life Annuity).--We will make monthly payments for
as long as the Annuitant or the contingent annuitant lives. Unless otherwise
stated, we will make them to the Annuitant while he or she is living. After the
Annuitant dies, we will make them to the contingent annuitant if he or she is
living. The payments will end with the last one due before the death of the
second to die of the Annuitant and the contingent annuitant.

Option D (Annuity for Specified Period).--We will make monthly payments for the
period you elect. The period may be 5, 10, 15 or 20 years. It may be a different
number of years if you request it and we agree. Unless otherwise stated, if the
Annuitant dies when one or more payments remain unpaid in the period elected, we
will pay the residue in one sum to the Annuitant's designated beneficiary or
estate. We will compute the residue as of the first Business Day on or after the
date the Annuitant died. We will adjust the amount for the change in the
Subaccount Annuity Unit Value between that Business Day and the first Business
Day on or after which we receive at our Service Office the items we need for
settlement.

Residue Described.--For Option B. residue on any Business Day means the then
present value of such of the 120 payments as may remain unpaid. Residue does not
include the value of any payments which may become due after the 120th payment.

For Option D. residue on any Business Day means the then present value of any
unpaid payments for the specified period of the annuity.

For Options B and D, for the purpose of computing the present value, we assume
that the Annuity Unit Value for

                            (Continued on Next Page)

Page 9 (WVQ-83)



<PAGE>


the Business Day as of which the calculation is made will not change after that
date. We will compute residue at an effective interest rate of 3 1/2% a year.

Annuitization Charge.--If the Annuity Date is less than three years after the
Contract Date, or if the annuity option chosen is Option D, an Annuitization
Charge may be deducted from your Variable Account on the last Business Day on or
before the Annuity Date. The amount of the charge will be the same as the
Withdrawal Charge that would have applied if a total withdrawal had been made on
the Annuity Date. We explain how that charge is computed under Withdrawal
Charges on page 7.

Determination of Amount of Annuity.--Your Variable Account on the last Business
Day on or before the Annuity Date will be reduced by any Annuitization Charge
and any premium taxes that may apply. The balance will be used to determine the
first monthly annuity payment based on the option chosen and in accord with the
annuity settlement tables.

The number of your Annuity Units in each subaccount is found by dividing the
amount of the first monthly annuity payment attributable to your investment in
that subaccount by the Subaccount Annuity Unit Value on the last Business Day on
or preceding the Annuity Date. After that the number of Annuity Units for each
subaccount will remain fixed unless a transfer is made as we describe below. The
dollar amount of annuity payments will change from month to month to reflect the
investment experience of the subaccounts involved. The actual amount of any
annuity payments after the first will be determined by multiplying the number of
Annuity Units in each subaccount by the Annuity Unit Value for that subaccount
at the end of the Business Day on which the annuity payment is due or, if that
day is not a Business Day, at the end of the last preceding Business Day, and
then adding the resulting values.

Example.--The  Contract Value is $10,000. Of that amount, $3000 is in Subaccount
A and $7000 is in Subaccount  B. The annuity  option is B and the Annuitant is a
man age 65 on the Annuity Date.  The first annuity  payment equals $62.80 ($6.28
per $1000 of Contract Value).

Subaccount A provides $18.84 of that payment, and Subaccount B provides $43.96.
To find the number of Annuity Units for each Subaccount we divide each of these
amounts by the respective Annuity Unit Value for the subaccount on the Annuity
Date.

For this example assume that the Annuity Unit Value is $3 for Subaccount A, and
$2 for Subaccount B. Dividing these into the respective annuity payments
provides the number of Annuity Units for each subaccount ($18.84 / $3 = 6.28
Units for Subaccount A, and $43.96 / $2 = 21. 98 Units for Subaccount B). To
find the amount of each Subsequent annuity payment we multiply the number of
your Annuity Units in each subaccount by the Annuity Unit Value for that
subaccount and add the results.

Subaccount Annuity Unit Value.--The value of an Annuity Unit for each subaccount
was set at $1.00 on the date the first purchase payment was applied to that
account. The value for any subsequent Business Day is determined by multiplying
the subaccount's Net Investment Factor for that day by its Annuity Share Value
for the last preceding Business Day.

The Net Investment Factor for each subaccount for any Business Day equals (a)
1.00 plus the rate of net investment income earned by the subaccount, after
providing for taxes, for the period from the end of the last preceding Business
Day to the end of the current Business Day, plus the rate of asset value changes
in the subaccount during the same period, minus the rate of the Asset Charge
(which we explain on page 5) for the number of calendar days involved, divided
by (b} 1.00 plus the interest rate for the number of days involved, at the
effective annual rate assumed in the calculation of the annuity rates. (See page
11.)

Transfers During the Annuity Period.--During the annuity period the person who
has the right to receive variable annuity payments may choose to have the
payments reflect the investment results of different subaccounts. The annuity
units from one subaccount may be transferred to another subaccount subject to
these conditions: (1) only one transfer may be made in each Contract Year
without our consent. (2) All the shares in a subaccount must be transferred.

The transfer will be made effective for the first Business Day after the date we
receive the request for transfer except that if the request is received within
seven days before an annuity payment date, it will be made effective on the
first Business Day after the annuity payment date. To find the number of units
added to the subaccount(s) this is what we do. We multiply the number of Annuity
Units in the subaccount from which the transfer is to be made by the Annuity
Unit Value of that subaccount. We divide the result by the Annuity Unit Value
for the subaccount to which the transfer is being made. The result is the number
of Annuity Units to be transferred to the subaccount.

Example.--The Annuity Units in Subaccount A are to be transferred to Subaccount
B. There are 1000 Annuity Units in Subaccount A and the Annuity Unit Value for
that subaccount is $2.00 on the date of transfer. We multiply the number of
Annuity Units (1000) by the Annuity Unit Value ($2.00) and arrive at the figure
$2000. The number of Units to be added to Subaccount B is found by dividing this
figure by the Annuity Unit Value for Subaccount B. The Annuity Unit Value for
Subaccount B is $1.00. In this case the number of Units added to Subaccount B
would be 2000 ($2000 / $1.00). If the Annuity Unit Value of Subaccount B were
$4.00, only 500 Units would have been added ($2000 / $4.00).

We may stop, suspend or modify the transfer provisions. If we do, we will give
you 30 days' notice.

Page 10 (WVQ-83)



<PAGE>

                           ANNUITY SETTLEMENT TABLES

Amounts Payable.--If the annuity date is a contract anniversary, for Options A,
B and C we will use the tables below to compute the amount of the first monthly
payment. The amounts we show for Options A and B are based on the Annuitant's
sex and age last birthday on the annuity date. The amounts we show for Option C
are based on both the Annuitant's and the contingent annuitant's sex and age
last birthday on the annuity date.

If the annuity date is not a contract anniversary, for each completed quarter
year after the most recent anniversary we will adjust the amounts.

When we computed the amounts we show in the tables we adjusted the 1971
individual Annuity Mortality Table to an age last birthday basis, less one year;
we used an interest rate of 3 1/2% a year. For combinations of ages which we do
not show, we will compute the first monthly payment in the same basis. We will
let you know the amounts if you ask for them. Settlements under Options A, B and
C will share in our surplus to the extent and in the way we decide.

We computed the amounts of the first monthly payments we show in Table D using
an interest rate of 3 1/2%. Those amounts are not based on the age or sex of the
annuitant.

Other forms of annuity may be provided,  subject to Prudential's  consent, or as
may be required by any applicable law or regulation.

                                     TABLE A

            Amount of first monthly payment under Option A for each
                       $1000 applied on the annuity date.

- --------------------------------------------------------------------------------
    AGE       MALE       FEMALE         AGE           MALE         FEMALE
================================================================================
     41      $4.12        $3.84          61          $5.98          $5.34
     42       4.18         3.88          62           6.14           5.46
     43       4.23         3.93          63           6.30           5.60
     44       4.30         3.98          64           6.48           5.74
     45       4.36         4.03          65           6.67           5.90
     46       4.43         4.08          66           6.88           6.07
     47       4.51         4.13          67           7.10           6.26
     48       4.58         4.19          68           7.33           6.46
     49       4.66         4.25          69           7.58           6.68
     50       4.74         4.32          70           7.86           6.92
     51       4.83         4.39          71           8.15           7.18
     52       4.92         4.46          72           8.47           7.46
     53       5.02         4.54          73           8.81           7.77
     54       5.12         4.62          74           9.17           8.10
     55       5.22         4.71          75           9.57           8.47
     56       5.33         4.80          76          10.00           8.86
     57       5.45         4.89          77          10.47           9.30
     58       5.57         5.00          78          10.97           9.77
     59       5.70         5.10          79          11.52          10.29
     60       5.84         5.22          80          12.11          10.85
- --------------------------------------------------------------------------------
                                                                          
                                    TABLE B

             Amount of first monthly payment under Option B for each
                       $1000 applied on the annuity date.

- --------------------------------------------------------------------------------
    AGE       MALE       FEMALE         AGE           MALE         FEMALE 
================================================================================

     41      $4.12        $3.84          61          $5.98          $5.34 
     42       4.18         3.88          62           6.14           5.46 
     43       4.23         3.93          63           6.30           5.60 
     44       4.30         3.98          64           6.48           5.74 
     45       4.36         4.03          65           6.67           5.90 
     46       4.39         4.06          66           6.43           5.87 
     47       4.46         4.12          67           6.58           6.02 
     48       4.53         4.17          68           6.74           6.19 
     49       4.60         4.23          69           6.91           6.36 
     50       4.67         4.30          70           7.08           6.53 
     51       4.75         4.36          71           7.26           6.72 
     52       4.83         4.43          72           7.43           6.92 
     53       4.92         4.50          73           7.61           7.12 
     54       5.00         4.58          74           7.80           7.32 
     55       5.10         4.66          75           7.98           7.53 
     56       5.19         4.74          76           8.16           7.74 
     57       5.29         4.83          77           8.33           7.95 
     58       5.40         4.92          78           8.52           8.15 
     59       5.51         5.02          79           8.68           8.35 
     60       5.62         5.12          80           8.85           8.54 
- --------------------------------------------------------------------------------
                            (Continued on Next Page)

Page 11(WVQ-83)


<PAGE>

                     ANNUITY SETTLEMENT TABLES (Continued)

                                     TABLE C

             Amount of first monthly payment under Option C for each
                       $1000 applied on the annuity date.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
FEMALE                                              MALE AGE
AGE    --------------------------------------------------------------------------------------------------------------
       60     61     62      63      64      65     66      67      68     69      70      71      72     73      74
=====================================================================================================================
<S>  <C>    <C>    <C>     <C>     <C>     <C>    <C>     <C>     <C>    <C>     <C>     <C>     <C>    <C>     <C>  
55   $4.39  $4.42  $4.44   $4.46   $4.47   $4.49  $4.51   $4.52   $4.54  $4.55   $4.57   $4.58   $4.59  $4.60   $4.61
56    4.45   4.47   4.49    4.52    4.54    4.56   4.57    4.59    4.61   4.62    4.64    4.65    4.67   4.68    4.69
57    4.50   4.53   4.55    4.58    4.60    4.62   4.64    4.66    4.68   4.70    4.71    4.73    4.74   4.76    4.77
58    4.55   4.58   4.61    4.64    4.66    4.69   4.71    4.73    4.75   4.77    4.79    4.81    4.83   4.84    4.86
59    4.61   4.64   4.67    4.70    4.73    4.76   4.78    4.81    4.83   4.85    4.87    4.89    4.91   4.93    4.94
60    4.66   4.70   4.73    4.76    4.79    4.82   4.85    4.88    4.91   4.93    4.96    4.98    5.00   5.02    5.04
61    4.72   4.75   4.79    4.83    4.86    4.90   4.93    4.96    4.99   5.02    5.04    5.07    5.09   5.11    5.13
62    4.77   4.81   4.85    4.89    4.93    4.97   5.00    5.04    5.07   5.10    5.13    5.16    5.19   5.21    5.23
63    4.82   4.87   4.91    4.96    5.00    5.04   5.08    5.12    5.16   5.19    5.22    5.26    5.29   5.31    5.34
64    4.88   4.93   4.98    5.02    5.07    5.11   5.16    5.20    5.24   5.28    5.32    5.35    5.39   5.42    5.45
65    4.93   4.98   5.04    5.09    5.14    5.19   5.24    5.29    5.33   5.38    5.42    5.46    5.50   5.53    5.57
66    4.98   5.04   5.10    5.15    5.21    5.27   5.32    5.37    5.42   5.47    5.52    5.56    5.61   5.65    5.69
67    5.04   5.10   5.16    5.22    5.28    5.34   5.40    5.46    5.51   5.57    5.62    5.67    5.72   5.77    5.81
68    5.09   5.15   5.22    5.29    5.35    5.42   5.48    5.55    5.61   5.67    5.73    5.78    5.84   5.89    5.94
69    5.14   5.21   5.28    5.35    5.42    5.49   5.56    5.63    5.70   5.77    5.84    5.90    5.96   6.02    6.08
70    5.19   5.26   5.34    5.42    5.49    5.57   5.65    5.72    5.80   5.87    5.94    6.02    6.08   6.15    6.22
71    5.24   5.32   5.40    5.48    5.56    5.64   5.73    5.81    5.89   5.97    6.13    6.21    6.29   6.21    6.36
72    5.28   5.37   5.45    5.54    5.63    5.72   5.81    5.90    5.99   6.08    6.16    6.25    6.34   6.42    6.50
73    5.33   5.42   5.51    5.60    5.69    5.79   5.88    5.98    6.08   6.18    6.27    6.37    6.46   6.56    6.65
74    5.37   5.46   5.56    5.65    5.75    5.86   5.96    6.06    6.17   6.27    6.38    6.49    6.59   6.70    6.80
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
  




                                     TABLE D

            Amount of first monthly payment under Option D for each
                       $1000 applied on the annuity date.


                     ------------------- -------------------
                         NUMBER OF YEARS MONTHLY PAYMENT
                     ------------------- -------------------
                              5                 $18.12
                              10                  9.83
                              15                  7.10
                              20                  5.75
                     ------------------- -------------------

Page 12 (WVQ-83)

<PAGE>



                   SETTLEMENT PROVISIONS FOR THE BENEFICIARY

Payee Defined.--In these provisions the word Payee means a beneficiary or a
contingent payee who has a right to receive a settlement under the contract.

Choosing an Option.--Unless the retirement arrangement that covered you provides
otherwise, a Payee may choose an option for all or part of any proceeds, residue
or the then present value of any unpaid payments which become payable to him or
her in one sum. We explain residue under Residue Described.

In some cases a Payee will need our consent to choose an option. We describe
these cases under Conditions.

Options Described.--Here are the options we offer. We may also consent to other
arrangements.

Option 1 (Payments for a Fixed Period).--We will make monthly payments for the
period the Payee selects. The period may be 5, 10, 15 or 20 years.

Option 2 (Life Income, 10-Year Minimum Period).--We will make monthly payments
for as long as the person on whose life the settlement is based lives, with 120
monthly payments assured. We must have proof of the date of birth of that
person. The settlement will share in our surplus to the extent and in the way we
decide.

Determination of Amount of Payment Under Option 1 or 2.--Monthly payments are
determined as described in the Determination of Amount of Annuity provision,
except that no premium tax or annuitization charge will be deducted from the
amount payable. The applicable rates for Option will be the same as rates shown
in the Option D Table and for Option 2, the same as rates shown in the Option B
Table.

First Payment Due Date.--Unless a later date is requested when the option is
chosen, the first payment will be due on the first day of the earliest calendar
month on or after the Service Office has received the request for the settlement
and due proof of the Annuitant's death and such claim forms and other evidence
as may be satisfactory to us.

Residue Described.--For Option 1, residue on any Business Day means the then
present value of any unpaid payments for the balance of the fixed payment
period.

For Option 2, it means the then present value of such of the 120 payments as may
remain unpaid. Residue does not include the value of any payments which may
become due after the 120th payment.

For Options 1 and 2, for the purpose of computing the present value, we assume
that the Annuity Unit Value for the Business Day as of which the calculation is
made will not change after that date. We will compute residue at an effective
interest rate of 3 1/2% a year.

Conditions.--Our permission is needed for an option to be used for any person
under any of these conditions:

1.   The person is not a natural person who will be paid in his or her own
     right.

2.   The person will be paid as assignee.

3.   The first payment to the person under the option would be less than $20.

Death of Payee.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.


Page 13 (WVQ-83) 





<PAGE>



                                  ENDORSEMENTS

                      (Only we can endorse this contract.)




Page 14 (WVQ-83)

<PAGE>




                                GUIDE TO CONTENTS

                                                                        Page

Contract Summary...........................................................2

Death of Annuitant ........................................................2

General Provisions.........................................................4
 Definitions; Contract Modifications; 
 Change of Annuity Date; 
 Ownership and Control; 
 Currency; Misstatement of Age 
 or Sex; Incontestability; Nonforfeitability;
 Nontransferability; Proof of Survival or
 Death; Asset Charges; Changes by Prudential;
 Voting Rights; Participation

Beneficiary................................................................6
Variable Accumulation Provisions...........................................6
 Purchase Payments; Crediting
 of Subaccount Units; Subaccount Unit Value;
 Annual Maintenance Charge;
 Withdrawals;
 Withdrawal Charges; Transfers;
 Changing the Number of Subaccount
 Units Credited; Substitution of Shares;
 Effect of Loss of Tax-Qualified
 Status or Failure to QualifY

Variable Payout Provisions.................................................9
 Choosing an Option; Conditions; 
 When No Option Chosen;
 Options Described; Residue
 Described; Annuitization
 Charge; Determination of Amount
 of Annuity; Subaccount Annuity Unit Value; 
 Transfers During the Annuity Period

Annuity Settlement Tables.................................................11

Settlement Provisions for the Beneficiary.................................13

Page 15

Variable  Annuity  Contract with  Flexible  Purchase  Payments--Monthly  annuity
payments  starting on annuity date.  Payment as stated upon death before annuity
date. Purchase payments payable during Annuitant's  lifetime until annuity date.

WVQ-83





                                     The Prudential Insurance Company of America
                                     Corporate Office
                                     Newark, New Jersey



          Annuitant                                        Contract Number  
       Annuity Date                                        Contract Date   




            Agency








We will make monthly payments starting on the annuity date we show in the window
of this page. We make this promise subject to all the provisions of this
contract.

Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or there is
a claim, just see one of our representatives or get in touch with one of our
offices.

The benefits, payments and values under this contract are on a variable basis.
They will reflect the investment experience of the separate account to which the
contract is related; they are subject to change both up and down and are not
guaranteed as to dollar amount except as provided under the Death of Annuitant
and Settlement provisions for the Beneficiary sections.

We make this contract available in connection with pension, profit-sharing and
annuity purchase plans and Individual Retirement Annuities intended to qualify
for special Federal Income Tax treatment under the Internal Revenue Code of
1954, as amended. In order to obtain or retain that tax treatment the exercise
of rights and privileges under the contract by the Annuitant may be restricted.
We assume no responsibility for determining that a particular plan or Individual
Retirement Annuity is so qualified, that a particular Annuitant is eligible
under the plan or Individual Retirement Annuity or that the exercise of such
rights and privileges complies with the restrictions.

The assets of the separate account, The Prudential Qualified Individual Variable
Contract Account, would have to earn an investment return of 4.7% per annum in
order that the dollar amount of annuity payments made under the Variable Payout
provisions of this contract will not decrease. A Mortality Risk Charge and an
Expense Risk Charge are applied daily at effective annual rates of 0.8% and
0.4%, respectively (for a total of 1.2% per year), against the net assets of The
Prudential Qualified Individual Variable Contract Account attributable to
Subaccount Units and Subaccount Annuity Units under this contract.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value on the date your request is received,
without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.


   /s/ Isabella L. Kirchner                      /s/ [ILLEGIBLE]
            Secretary                                  President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on annuity date. Payment as stated upon death before annuity
date. Purchase payments payable during Annuitant's lifetime until annuity date.

WQ-83 (N.Y.)      
II-42                                                      




Prudential        The Prudential        
- ----------        Insurance Company               
                  of America

                                                
Annuitant                                              Contract No.
- ---------------------------------------------------    -------------------------
                              LIMITATION PROVISIONS
   
The contract is amended at issue to include these provisions. They apply even
though the contract may state otherwise:

NON-FORFEITABLE AND NON-TRANSFERABLE

1.   The Annuitant will always be the owner of this contract except when a
     transfer is made to a former spouse in accord with a divorce decree as
     provided in Section 408 (d) (6) of the Internal Revenue Code of 1954, as
     amended (the "Code"). The rights of an Annuitant cannot be forfeited.

2.   This contract may not be sold, assigned, discounted or pledged for any
     purpose to anyone except us. No part of the value of this contract may be
     used to buy life insurance.

RET1REMENT OPTIONS

For settlements that start while the Annuitant is living:

1.   A last survivor type settlement may be chosen only if the Annuitant's then
     spouse is the contingent payee.

2.   Option D may be chosen only if the period will not exceed the life
     expectancy, as we determine for persons of the same age, of the Annuitant.
     If the Annuitant's then spouse is the contingent payee the period may not
     exceed their joint life and last survivor expectancy, as we determine for
     persons of the same age.

3.   Any payments we make will be made as we describe in the Variable Annuity
     Payout Provisions of this contract.

DEATH OPTIONS

Except for a settlement with the Annuitant's spouse, or one made in accord with
the Retirement Options above, a settlement may not be chosen unless the amount
available for settlement with the beneficiary or contingent payee will be
distributed within five years of the date of death of the person by reason of
whose death the amount became available.

ANNUITY DATE

The annuity date may not be changed to a date which is later than the contract
anniversary on or just before the date six months after the Annuitant's 70th
birthday.

So that this contract may meet the requirements of an individual retirement
annuity within the meaning of Section 408 (b) of the Code:

1.   We do not expect that any dividends will be payable during the accumulation
     period. If any dividends are declared, they will be credited on the next
     contract anniversary and only used to increase the annuity benefits.

2.   The maximum purchase payment we will accept for any one tax year of the
     Annuitant is (a) the lesser of $2,000 or 100% of the amount that is
     included in the gross income of the Annuitant; or (b) a greater amount if
     allowed under the Code. But a purchase payment will not be considered in
     applying the maximum if we have been furnished with evidence that it came
     from one of these distributions:

     a.   A qualifying rollover paid to a participant or, if he or she is
          deceased, to his or her spouse from a plan described in Section 401(a)
          or 403 (a) of the Code.

     b.   A qualifying one paid to a participant or, if he or she is deceased,
          to his or her spouse from an annuity contract described in Section 403
          (b) of the Code.

     c.   One from an individual retirement account or annuity as described in
          Section 408 (a) or (b) of the Code, that is not an inherited
          individual retirement account or annuity as described in Section 408
          (d) (3) (c) of the Code.

A change might be needed later to conform this contract to the requirements of
the Internal Revenue Code, regulations or published rulings or to the
requirements of the Employee Retirement Income Security Act of 1974 If so, we
will have the right to make the change(s) without a signed request and to
provide a form of amendment to the contract.

                           Endorsed by attachment on the Contract Date
                              The Prudential Insurance Company of America,

                              By /s/ Isabella L. Kirchner
- -----                                                          Secretary.
WVQ 2 84
- -----                                      II-12



                   
Prudential         The Prudential     
- ----------         Insurance Company  
                   of America         
                   




Annuitant                                                        Contract No.

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

                              LIMITATION PROVISIONS

The contract is amended at issue to include these provisions. They apply even
though the contract may state otherwise:

NON-TRANSFERABLE

This contract may not be sold, assigned, discounted. or pledged for any purpose
to anyone except us.
- --------------------------------------------------------------------------------

RETIREMENT OPTIONS

For settlements which start while the Annuitant is living:

Option D may be chosen only if the period will not exceed the life expectancy,
as we determine for persons of the same age and sex, of the Annuitant. If the
Annuitant's then spouse is the contingent payee the period may not exceed their
joint life and last survivor expectancy, as we determine for persons of the same
age and sex.

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

A change might be needed later to conform this contract to the requirements of
the Internal Revenue Code, regulations or published rulings or to the
requirements of the Employee Retirement Income Security Act of 1974. If so, we
will have the right to make the change(s) without a signed request and to
provide a form of amendment to the contract.



                                    Endorsed by attachment on the Contract
                                    The Prudential Insurance Company of America

                                    By /s/ Isabella L. Kirchner
                                                               Secretary


Printed in U.S.A.   
- -----
WVQ-3-83  
- -----
                                      T-44





   Prudential                       The Prudential
  ------------                      Insurance Company
                                   of America


Annuitant                                                        Contract No.
- --------------------------------------------------------------------------------

                              LIMITATION PROVISIONS

The contract is amended at issue to include the following provisions. They apply
even though the contract may state otherwise.

A.   RIGHTS

     As stated in the retirement  plan under which this contract is issued,  the
     Employer is________________________________________________________________

     The administrator is [_] the Employer [_] _________________________________

     Except as we state below, any right or privilege granted by the contract or
     by us may be exercised by the Annuitant only with the written consent of
     the Administrator

     The Annuitant, with no one else's consent, may designate and change the
     beneficiary and may exercise the voting rights.

     If we receive written notice from the Administrator that the Internal
     Revenue Service has stated that the retirement plan initially fails to
     qualify under Sections 401 or 403(a) of the Code, this will be the effect.
     Within one year after the date of denial of qualification, the Employer
     will have the right to liquidate the contract for its cash value less the
     annual maintenance charge.

     The retirement plan might be amended so that it is not in accord with this
     Limitation Provision. If so, the Administrator, with only our consent, will
     have the right to amend this form accordingly.


B.   NON-TRANSFERABLE

     This contract may not be sold, assigned, discounted, or pledged for any
     purpose to anyone except us.


C.   RETIREMENT OPTIONS

     For settlements which start while the Annuitant is living:

     1.   A last survivor type settlement may be chosen only if the Annuitant's
          then spouse is the contingent payee.

     2.   Payment will be made under Option C if, on the annuity starting date,
          all of these statements are true:

               a.   The Annuitant is married.

               b. His or her spouse is then living.

               c.   No contrary form of payment, chosen by the Annuitant in
                    writing, has been received at our Service Office.

          But the amount of any payment under Option C to the Annuitant's spouse
          after the Annuitant's death will be one-half the amount that was
          payable while both of them were living.

     3.   Option D may be chosen only if the period will not exceed the life
          expectancy, as we determined for persons of the same age and sex, of
          the Annuitant. If the Annuitant's then spouse is the contingent payee
          the period may not exceed their joint life and last survivor
          expectancy, as we determine for persons of the same age and sex.


D.   DEATH OPTIONS

     Except for one made in accord with the Retirement Options above, a
     settlement may not be chosen unless the amount available for settlement
     with the beneficiary or contingent payee will be distributed within five
     years of the date of death of the person by reason of whose death the
     amount became available.


E.   ANNUITY DATE

     In the case of a key employee, as defined in the Code, the annuity date may
     not be changed to a date which is later than the contract anniversary on or
     just before the date six months after the Annuitant's 70th birthday.


     A change might be needed later to conform this contract to the requirements
     of the Internal Revenue Code, regulations or published rulings or to the
     requirements of the Employee Retirement Income Security Act of 1974. If so,
     we will have the right to make the change(s) without a signed request and
     to provide a form of amendment to the contract.

                           Endorsed by attachment on the contract Date
                                The  Prudential  Insurance Company of America,

                                By  /s/ Isabella L. Kirchner

                                                   Secretary.

                                      II-45
Printed in U.S.A.




Prudential          The Prudential 
- -----------         Insurance Company
                    of America



Annuitant                                              Annuity Contract No.

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








                                     Endorsed by attachment

                                     The Prudential Insurance Company of America


                                     By /s/ ISABELLA L. KIRCHNER

                                                                      Secretary


                                     Date              Attest
                                         ------------        -------------------




                                      T-46



Printed in U.S.A.


- -----
WVQ 5  83
- -----





Prudential                          The Prudential
- ----------                          Insurance Company
                                    of America



  
Annuitant                                        Annuity Contract Number

- --------------------------------------------------------------------------------
                                                      
This contract is amended at issue to include this provision. It applies even
though the contract may state otherwise:

               As required by Section 36.105 of Title ll0B of the Texas Revised
               Civil Statutes, the right to withdraw values may be exercised
               only in event of the annuitant's death, retirement, or
               termination of employment in all institutions of higher education
               as defined in Section 6 1.003 of the Texas Education Code. But
               contract values may be transferred to other contracts or other
               carriers during the period of the annuitant's participation in
               the Optional Retirement Program.







                   Endorsed by attachment on the Contract Date

                  The Prudential Insurance Company of America,

                   By  /s/ Isabella L. Kirchner
                                       
                                        Secretary.
- -----
WVQ-6-83
- -----
                                      T-49



                                                                       
                                   ENDORSEMENT
                       (Only we can endorse this contract)

                               ALTERATION OF TEXT
                  
The second paragraph of the section "Determination of Amount of Annuity" in the
Variable Payout Provisions is amended as of the issue date to read as follows:

The number of your Annuity Units in each subaccount is found by dividing the
amount of the first monthly annuity payment attributable to your investment in
that subaccount by the Subaccount Annuity Unit Value on the last Business Day on
or preceding the Annuity Date. After that the number of Annuity Units for each
subaccount will remain fixed unless a transfer is made as we describe below. The
dollar amount of annuity payments will vary from month to month and may increase
or decrease to reflect the investment experience of the subaccounts involved.
The actual amount of any annuity payments after the first will be determined by
multiplying the number of Annuity Units in each subaccount by the Annuity Unit
Value for that subaccount at the end of the Business Day on which the annuity
payment is due or, if that day is not a Business Day, at the end of the last
preceding Business Day, and then adding the resulting values.


                                    The Prudential Insurance Company of America

                                    By   /s/ Isabella L. Kirchner
                                                         Secretary

- -----
WVQ-7-83
- -----
                                     II-11



                                   BENEFICIARY

Unless the retirement arrangement under which the contract is purchased provides
otherwise, you may designate or change a beneficiary. Your request must be in
writing and in a form which meets our needs. It will take effect only when we
file it at our Service Office; this will be after you send the contract to us to
be endorsed, if we ask you to do so. Then any previous beneficiary's interest
will end as of the date of the request. It will end then even if the Annuitant
is not living when we file the request. Unless otherwise stated, we will make
payment to the beneficiary only if the Annuitant dies before the annuity date.
Any beneficiary's interest is subject to the rights of any assignee of whom we
know.

When a beneficiary is designated, any relationship shown is to the Annuitant,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise;

1.   One who survives the Annuitant will have the right to be paid only if no
     one in a prior class survives the Annuitant.

2.   One who has the right to be paid will be the only one paid if no one else
     in the same class survives the Annuitant.

3.   Two or more in the same class who have the right to be paid will be paid in
     equal shares.

4.   If none survives the Annuitant, we will pay in one sum to the Annuitant's
     estate.

Example: Suppose the class I beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the annuity date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living, we owe him the proceeds. If none of them is living, we owe the
Annuitant's estate.

                        VARIABLE ACCUMULATION PROVISIONS

Purchase Payments.--Purchase payments made through payroll deductions or similar
arrangements with an employer must be at a rate of at least $300 during any
12-month period. Any other purchase payment must be at least $50.

The initial purchase payment will be allocated to the subaccounts in accord with
your instructions. If, after you have made at least one purchase, we receive a
purchase payment without instructions, we will allocate it in the same
proportions as the most recent purchase payment you made.

Example 1: On the Contract Date you make a $1500 purchase and allocate $500 to
each of Subaccounts A, B and C. Later in the year you send us a $900 purchase
payment, but you don't tell us how it is to be applied. Based on the most recent
purchase, the one made on the Contract Date, we would make a $300 purchase for
each of Subaccounts A, B and C.

Crediting of Subaccount Units.--This contract will be credited with the number
of Subaccount Units which results from dividing (1) the amount of any purchase
payment allocated to a subaccount by (2) that subaccount's Unit Value for the
Business Day the purchase is made. The first purchase payment will be credited
on the first Business Day which is the later of: (a) the Contract Date, (b) the
date the purchase payment is received at the Service Office, or (c) the date we
approve the request for the contract, or on a later date if you request and we
agree. For any purchase payment after the first, the shares will be credited on
the first Business Day not earlier than the day we receive it at our Service
Office or on a later day if you request and we agree.

Subaccount Unit Value.--The Unit Value for a subaccount for any Business Day is
found by multiplying that subaccount s Net Investment Factor for that day by its
Unit Value for the last preceding Business Day. A subaccount's Net Investment
Factor for any Business Day equals (1) 1.00 plus the rate of net investment
income earned, after provision for taxes, for the period from the end of the
last preceding Business Day to the end of the current Business Day; plus (2) the
rate of asset value changes in the subaccount during the same period, minus (3)
the rates of the Mortality Risk Charge and the Expense Risk Charge (which we
describe on Page 5)

                            (Continued on Next Page)

Page 6 (WVQ-83) (OKLA)
                                     II-12



BENEFICIARY

Unless the retirement arrangement under which the contract is purchased provides
otherwise, you may designate or change a beneficiary. Your request must be in
writing. It will take effect only when we receive it at our Service Office. Then
any previous beneficiary's interest will end as of the date of the request. It
will end then even if the Annuitant is not living when we receive the request.
We may, upon receiving the request, require you to submit the contract for
endorsement, but this action will not affect the effective date of the
beneficiary designation. Unless otherwise stated, we will make payment to the
beneficiary only if the Annuitant dies before the annuity date. Any
beneficiary's interest is subject to the rights of any assignee of whom we know.

When a beneficiary is designated, any relationship shown is to the Annuitant,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:

1. One who survives the Annuitant will have the right to be paid only if no one
in a prior class survives the Annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the annuity date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living, we owe him the proceeds. If none of them is living, we owe the
Annuitant's estate.

Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.

VARIABLE ACCUMULATION PROVISIONS

Purchase Payments.--Purchase payments made through payroll deductions or similar
arrangements with an employer must be at a rate of at least $300 during any
12-month period. Any other purchase payment must be at least $50.

The initial purchase payment will be allocated to the subaccounts in accord with
your instructions. If, after you have made at least one purchase, we receive a
purchase payment without instructions, we will allocate it in the same
proportions as the most recent purchase payment you made.

Example 1: On the Contract Date you make a $1500 purchase and allocate $500 to
each of Subaccounts A, B and C. Later in the year you send us a $900 purchase
payment, but you don't tell us how it is to be applied. Based on the most recent
purchase, the one made on the Contract Date, we would make a $300 Purchase for
each of Subaccounts A, B and C.

Crediting of Subaccount Units.--This contract will be credited with the number
of Subaccount Units which results from dividing (1) the amount of any purchase
payment allocated to a subaccount by (2) that subaccount's Unit Value for the
Business Day the purchase is made. The first purchase payment will be credited
on the first Business Day which is the later of: (a) the Contract Date, (b) the
date the purchase payment is received at the Service Office, or (c) the date we
approve the request for the contract, or on a later date if you request and we
agree. For any purchase payment after the first, the shares will be credited on
the first Business Day not earlier than the day we receive it at our Service
Office or on a later day if you request and we agree.

Subaccount Unit Value.--The Unit Value for a subaccount for any Business Day is
found by multiplying that subaccount's Net Investment Factor for that day by its
Unit Value for the last preceding Business Day. A subaccount's Net Investment
Factor for any Business Day equals (1) 1.00 plus the rate of net investment
income earned, after provision for taxes, for the period from the end of the
last preceding Business Day to the end of the current Business Day; plus (2) the
rate of asset value changes in the subaccount during the same period, minus (3)
the rates of the Mortality Risk Charge and the Expense Risk Charge (which we
describe on Page 5)

(Continued on Next Page)
                                     II-13
 Page 6 (WVQ-83) (CAL.)       


                  VARIABLE ACCUMULATION PROVISIONS (continued)

To determine the sales charge we assume that $500 of the amount being withdrawn
is the payment made to the Money Market Subaccount in contract year one. The
remaining $100 being withdrawn is assumed to be a part of the $400 payment made
to the Bond Subaccount in contract year two. Of the first $500 payment we have
seen that $200 (10% of $2000) may be withdrawn without sales charge. A 5% sales
charge is due on the withdrawal of the other $300 of the payment (5% X $300 =
$15). The $100 portion being withdrawn from the second payment requires a 6%
sales charge (6% x $100 = $6). Thus the total sales charge for withdrawing $600
in year four is $21.

Transfers.--You may transfer all or part of your interest in a subaccount to one
or more of the other subaccounts. To make a transfer you must ask us in writing
in a form which meets our needs. You must tell us the amount to be transferred
and the names of the subaccounts involved. Our consent is needed for the
transfer if (1) the amount to be transferred is less than the smaller of $300
and your interest in the subaccount, (2) the value of any of your Units
remaining in the subaccount after the transfer would be less than $300, or (3)
four or more transfers of Subaccount Units have been made under your contract in
the current Contract Year. The transfer will be made on the first Business Day
after we receive your request.

To make the transfer this is what we will do. First, we will liquidate, without
charge, the number of your Units in the subaccount from which the transfer is to
be made to provide the amount requested. Then, we will use that amount to
purchase Units in the subaccount to which the transfer is to be made. The result
will be that, while the contract value will not change, the total number of
Subaccount Units credited to this contract may increase or decrease depending on
the Subaccount Unit Values. The original purchase date of record used to
determine the rate of charge for any future withdrawal is not changed as a
result of a transfer.

Example.--You ask that we transfer $600 from Subaccount A to Subaccount B. The
Subaccount A Unit Value is $10 on the date of the transfer. We would liquidate
60 shares in Subaccount A to provide the $600. The share value in Subaccount B
on the date of the transfer is $5. The $600 will buy 120 shares in Subaccount B.
If the Unit Value were $20, the $600 would buy only 30 Units. While the number
of Units may have changed on the date of transfer, their value remained the
same, $600.

Changing the Number of Subaccount Units Credited.--We have the right to change
the number of Subaccount Units if we deem the Subaccount Unit Value to be either
so large or so small as to not be in your best interest, or ours. If we make
such a change, the amount of the Variable Account will not change.

Substitution of Shares.--Shares of another registered, open-end investment
company may be substituted for the shares held in the account or any subaccount
or to be purchased by future purchase payments or transfers if (1) shares in the
subaccount are no longer available for purchase or (2) in our judgement further
investment in such shares is no longer appropriate for the subaccount.

Effect of Loss of Tax-Qualified Status or Failure to Qualify.--If, for any
reason, you become ineligible to participate or cease to be a participant in the
pension, profit-sharing or annuity purchase plan or Individual Retirement
Annuity in connection with which this contract is issued, or if the plan is
discontinued or loses its tax-qualified status, we may refuse to accept further
purchase payments under this contract.

If we determine that an applicable pension, profit-sharing or annuity purchase
plan was not tax-qualified when this contract was issued, or, if applicable,
that you were not eligible to establish an Individual Retirement Annuity for
which this contract was issued, here is what we may do: (1) If, when we make the
determination, we then provide a similar contract for the non-tax-qualified
market, we may offer to exchange this contract for such a non-tax-qualified
contract. Any such exchange will be made without redemption charge, but will be
subject to any conditions or adjustment which we determine to be necessary. Or
(2), if we do not then offer a similar contract for the non-tax-qualified
market, we may terminate this contract and liquidate all the subaccount units
credited to it. After deducting the Annual Maintenance Charge and the sales
charge, if any, we will pay you the balance within seven days after the
termination of the contract.

Page 8(WVQ-83) (N.Y.)
                                     II-12



                                   ENDORSEMENT
                       (Only we can endorse this contract)


                               ALTERATION OF TEXT

The paragraph titled "Changes by Prudential" under the provision of this
contract titled "GENERAL PROVISIONS" is replaced at issue by the following:

Changes by Prudential.--We reserve the right, upon 90 days' notice to you, to:

(1)  change the minimum amount requirements specified for purchases, withdrawals
     and transfers in the Variable Accumulation Provisions;

(2)  refuse to accept any request for purchase;

(3)  increase the amount of the Annual Maintenance Charge (see page 7),
     provided, however, that any such increase will be made effective only after
     it has been submitted and approved by the Tennessee Department of
     Insurance;

(4)  change the number of Subaccount Units credited, change or discontinue
     subaccounts, change to a different variable contract account, or substitute
     fund shares in the account (see page 8);

(5) make any changes required by law.

                                   The Prudential Insurance Company of America

                                   By  /s/ Isabella L. Kirchner

                                                       Secretary





Prudential
- -----------      
               

         The Prudential                     Individual Variable Annuity Contract
         Insurance Company                  Used to Fund an Individual
         of America                         Retirement Annuity Program

1.   Within seven days after sending his initial contribution to Prudential
     under an Individual Variable Annuity Contract to be used in connection with
     an IRA, the applicant may cancel his participation under that Contract by
     notifying Prudential in writing, and Prudential will refund all of his
     contributions under the Contract or, if greater, the amount credited to his
     accumulation accounts under the Contract computed as of the business day
     Prudential receives his notice of cancellation. This seven-day period may
     or may not coincide with any part of the ten-day cancellation period
     described in the Contract.

2.   An application has been made to the Internal Revenue Service for approval
     of the Individual Variable Annuity Contract to fund an Individual
     Retirement Annuity, as described in Section 408(b) of the Internal Revenue
     Code. When obtained, this approval is a determination as to the form of the
     Contract and does not represent a determination of the merits of the
     Contract. The Individual Variable Annuity Contract provides for purchase
     payments in an amount and frequency to be determined by the applicant,
     subject to the limits described in the accompanying Individual Retirement
     Annuities pamphlet. The value of the Contract may be used to provide the
     applicant with an income beginning at any time between the attainment of
     age 59 1/2 and the end of the taxable year in which the applicant attains
     age 70 1/2.

3.   Key financial information, including information concerning charges under
     the Contracts, is shown in the prospectus for Individual Variable Annuity
     Contracts of The Prudential Qualified Individual Variable Contract Account.

     No deductions are made from purchase payments when they are received;
     however, an annual maintenance charge of $30 will be made one year after
     you purchase your Contract and annually thereafter on the Contract
     anniversary date, or upon total withdrawal or the use of your Variable
     Account to effect an annuity, if either of those events occurs between
     Contract anniversary dates. This charge is not made after an annuity is
     effected.

     Also, although no sales charges are deducted from your purchase payments
     when they are made, your purchase payments may be subject to a sales charge
     upon withdrawal. In each Contract Year you may make withdrawal from your
     Variable Account of up to 10% of the value of the account, valued as of the
     date of first withdrawal in that Contract Year, without incurring a sales
     charge. If you withdraw all or a part of a purchase payment before the end
     of the Contract Year during which it was made, the sales charge will be 8%
     of the purchase payment you withdraw, subject to the 10% free withdrawal
     privilege. The sales charge imposed on withdrawal during the next Contract
     Year after it was made is 7% and continues to decrease by 1% per year- to
     6% upon the withdrawal of purchase payments during the second Contract Year
     after they were made, and so on - so that no sales charge is made upon
     withdrawal of any purchase payment made during the eighth Contract Year
     beginning after the payment was made or during any later Contract Year.
     Withdrawals are deemed for sales charge purposes to consist of purchase
     payments until all purchase payments have been withdrawn. Purchase payments
     are considered to be withdrawn on a first-in, first-out basis. Earnings are
     not subject to sales charges.

     Illustration........ Assuming an employee begins an Individual Retirement
     Annuity purchase program with a contribution of $1,000 and makes a $1,000
     purchase payment each year thereafter, the maximum sales charge for
     withdrawing $8,000 or any greater amount is $360, broken down as follows:




<PAGE>





          CHARGE                           YEAR OF PURCHASE PAYMENT
          ------                           ------------------------
     $80 (8% X $1000) ....................Year of Withdrawal
     $70 (7% X $1000) ....................1st Preceding Contract Year
     $60 (6% X $1000) ....................2nd Preceding Contract Year
     $50 (5% X $1000) ....................3rd Preceding Contract Year
     $40 (4% X $1000) ....................4th Preceding Contract Year
     $30 (3% X $1000) ....................5th Preceding Contract Year
     $20 (2% X $1000) ....................6th Preceding Contract Year
     $10 (1% X $1000) ....................7th Preceding Contract Year
     NONE ................................8th Preceding Contract Year or Earlier

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

     $360 Total

     The $360 charge would be less if any part of the $8,000 subject to a sales
     charge were subject to the 10% free withdrawal privilege described above.

4.   Values under the Contract before retirement and monthly annuity payments
     after retirement are dependent upon the portfolio investment results of one
     or more of the underlying subaccounts of The Prudential Series Fund, Inc.
     and cannot be guaranteed. Should this plan be discontinued, the value of
     the Contract at the time of discontinuance may be less than the
     considerations paid to that date.



Prudential
- ----------

           The Prudential Insurance Company of America      TEXAS VARIABLE
                                                            ANNUITY ENDORSEMENT

The Variable Annuity Contract was modified prior to its execution by addition of
the following:

     1. This Variable Annuity Contract is issued subject to the laws and
regulations of the State of Texas, including the application of such laws and
rules and requirements to the Contract and to the interpretation of its
provisions, and is amended to conform therewith.

     2. Prudential may effect the transfer of assets between Prudential's
Qualified Individual Variable Contract Account and other accounts for the
purpose of making adjustments necessitated by this Contract, including
adjustment for any surplus or deficit which may arise in Prudential's Qualified
Individual Variable Contract Account by virtue of mortality experience or
required by governmental authorities having jurisdiction over Prudential. Such
adjustments shall be made by cash transfer only, except as is authorized or
required by regulatory authority.

     3. Prudential's Qualified Individual Variable Contract Account is divisible
for various purposes in respect of regulation and compliance with law, including
divisibility as it is applicable to any functions arising from the provisions of
the Contract or provisions of law and regulation.

     4. The Variable Annuity Contract is subject to endorsement from time to
time as may be necessary to comply with valid and appropriate rules and
regulations adopted by regulatory authorities, or as a court of final
jurisdiction shall determine, and is executed subject to that condition.

     5. The Variable Annuity Contract is issued subject to the laws of the state
where the Annuitant resides at the time of the making of the Contract and is
subject also to the rules and regulations of the state administrative agency
responsible for variable annuity regulation in such state, including the
application of such laws and rules and requirements to the Contract and to the
interpretation of its provisions; except, however, in the circumstance and only
to the extent the application of this provision to any person or circumstance is
expressly contrary to and excluded by superior law or valid statute having and
determined to have supremacy in the circumstance.

     6. Prudential guarantees that the actual expense and actual mortality will
not adversely affect the dollar amounts of variable annuity benefits or other
contractual payments or value; and Prudential will transfer such amounts of
general corporate funds into Prudential's Qualified Individual Variable Contract
Account as are necessary to carry out this guarantee. However, no transfer shall
be made, and Prudential does not obligate itself to make any transfer which
would result in an impairment of the statutory reserves of Prudential, and this
guarantee is accordingly limited.

     7. The variable annuity benefits of the Variable Annuity Contract are
funded solely from the assets of Prudential's Qualified Individual Variable
Contract Account and except to the extent of such limited expense and mortality
guarantees, shall have no claim against any other assets of Prudential.

     8. The monthly annuity for ages not shown in the Annuity Settlement Tables
will be provided by Prudential upon request.

     9. Variations in the values or cost of Subaccount Units or Subaccount
Annuity Units or the amount of payments applied to Prudential's Qualified
Individual Variable Contract Account are or will be made to effect requirements
of law or regulation.

     10. Prudential will mail to the Annuitant such reports and information
periodically as the law and regulation of appropriate jurisdictions shall
require (irrespective of any provision of this Contract which may be contrary to
such law or regulation).

                                  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
               
                                  By /s/ Isabella L. Kirchner
                                     --------------------------
                                                       Secretary




                                   ENDORSEMENT
                       (Only we can endorse this contract)


The paragraph titled "Changes by Prudential" on page 5, under the provision of
this contract titled "GENERAL PROVISIONS", is amended as of the Contract Date to
provide that Prudential does not reserve the right to increase the amount of the
Annual Maintenance Charge. The Charge will never be greater than the amount
shown on page 3.


                                   The Prudential Insurance Company of America

                                   By /s/ Isabella L. Kirchner

                                                        Secretary




                                     NOTICE


This contract is for use with plans intended to qualify under the Internal
Revenue Code for tax favored status. Language contained in this contract
referring to Federal tax statutes or rules is informational and instructional
and this language is not subject to approval or disapproval by the state in
which the contract is issued for delivery.

Your qualifying status is the controlling factor as to whether your funds will
receive tax favored treatment rather than the contract. Please ask your tax
advisor if you have any questions as to whether or not you qualify.


                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA




                                  ENDORSEMENT
                      (Only we can endorse this contract.)
                               
                               ALTERATION OF TEXT

The Definitions section of the General Provisions on page 4 is amended as of the
Contract Date to add the following definitions:

Proof of Death (as required under Death of Annuitant on page 2).-- Any of the
following: (1) a copy of a certified official certificate of death; (2) a
statement by the attending physician, or an abstract of the record of the
hospital where the Annuitant died, certifying to the Annuitant's death; (3) a
copy of a decree by a court of competent jurisdiction as to a finding of death;
or (4) any other proof of death acceptable to Prudential.

The Subaccount Unit Value section of the Variable Accumulation Provisions on
pages 6 and 7 is amended as of the Contract Date to further define as follows
two items which help determine the Net Investment Factor for any Business Day:

The rate of net investment income earned for any Business Day is the rate of any
dividends declared by the corresponding Portfolio of The Prudential Series Fund,
Inc., but not yet paid to the subaccount.

The rate of asset value changes in the subaccount for any Business Day is the
rate determined by dividing the value of the assets of the subaccount for that
day by the value of the assets of the subaccount for the preceding Business Day
(not considering changes resulting from new purchase payments and withdrawals)
and subtracting 1.0 from the result.

                                     The Prudential Insurance Company of America

                                     By /s/Isabella L. Kirchner

                                                        Secretary


    
                                  ENDORSEMENT
                      (Only we can endorse this contract.)

This endorsement is attached to and made a part of this contract on the contract
date:

Any reference, in any provision of this contract, to the sex of any person will
be ignored except for the purpose of identification. For any participating
settlement payable for the lifetime of one or more payees, the female rates we
show in the contract will apply to both male and female payees.

This form was approved by the New York State Insurance Department under an
accelerated procedure to help employers in complying with the United States
Supreme Court decision in Arizona vs. Norris. The Department has reserved the
right to require changes in this form to comply with the New York law and
regulations that apply.

                                     The Prudential Insurance Company of America

                                     By /s/ Isabelle L. Kirchner  
                                        -------------------------------  
                                                      Secretary


                                                                                
- -------------
COMB 84889-83
- ------------- 





                                   ENDORSEMENT
                      (Only we can endorse this contract.)


This endorsement is attached to and made a part of this contract on the contract
date:

Any reference, in any provision of this contract, to the sex of any person will
be ignored except for the purpose of identification. For any participating
settlement payable for the lifetime of one or more payees, the female rates we
show in the contract will apply to both male and female payees.

                                    The Prudential Insurance Company of America

                                    By  /s/Isabella L. Kirchner

                                                        Secretary




  Prudential                         The Prudential Insurance Company of America
  ----------                         Corporate Office 
                                     Newark, New Jersey

   Annuitant                                                Contract Number
Annuity Date                                                Contract Date

      Agency 

We will make monthly payments starting on the annuity date we show in the window
of this page. We make this promise subject to all the provisions of this
contract.

Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or there is
a claim, just see one of our representatives or get in touch with one of our
offices.

Except with respect to any fixed-dollar payout which you may elect, the
benefits, payments and values under this contract are on a variable basis. They
will reflect the investment experience of the separate account to which the
contract is related; they are subject to change both up and down and are not
guaranteed as to dollar amount except as provided under the Death of Annuitant
and Settlement Provisions for the Beneficiary sections.

We make this contract available in connection with pension, profit-sharing and
annuity purchase plans and Individual Retirement Annuities intended to qualify
for special Federal Income Tax treatment under the Internal Revenue Code of
1954, as amended. In order to obtain or retain that tax treatment the exercise
of rights and privileges under the contract by the Annuitant may be restricted.
We assume no responsibility for determining that a particular plan or Individual
Retirement Annuity is so qualified, that a particular Annuitant is eligible
under the plan or Individual Retirement Annuity or that the exercise of such
rights and privileges complies with the restrictions.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value, determined as of the date your request is
received, without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.

      /s/ Isabelle L. Kirchner                    /s/ [ILLEGIBLE]
              Secretary                                President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.

QVIP-84
                                     II-14
<PAGE>

                                CONTRACT SUMMARY

We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.

This is a contract to provide variable or fixed dollar income or both to begin
on the Annuity Date. If on the Annuity Date the Annuitant is entitled to payment
and no other settlement has been chosen, we will make variable monthly payments
to the Annuitant for as long as he or she lives, with 120 payments certain. But
if the amount of the initial payment would be less than $20, we will, instead,
pay the cash value in one sum. We describe other options we offer on page 10.

Purchase payments may be made at any time until the Annuity Date. Their amounts
may be restricted by the retirement arrangement that covers the Annuitant. The
purchase payments will be reduced by any state premium taxes we are required to
deduct, and the balance will be allocated as you direct to one or more of the
subaccounts of The Prudential Qualified Individual Variable Contract Account, a
variable contract account of Prudential, created under New Jersey law and
registered as a unit investment trust under the Investment Company Act of 1940.
Assets of these subaccounts are invested in shares of corresponding Portfolios
of The Prudential Series Fund, Inc. For example, assets of the Bond Subaccount
are invested in shares of the Bond Portfolio. Assets of the Money Market
Subaccount are invested in shares of the Money Market Portfolio, etc. Your
interests in subaccounts are recorded in terms of full or fractional units of
the selected subaccount(s).

On the Annuity Date, if a variable annuity option takes effect, the number of
your subaccount units that are needed to provide the option are converted to
subaccount annuity units. These units will be used to provide a variable annuity
under the Payout Provisions. We explain this on pages 11 and 12. The dollar
value of the subaccount units and the amount of the annuity payments will vary
in accord with the investment results of the subaccounts. If a fixed annuity
option takes effect, your subaccount units will be used to provide an income
which will be fixed in amount thereafter, as we explain on page 11.

We describe on page 9 the amount payable, if any, at the death of the Annuitant.
Subject to the retirement arrangement that covers the Annuitant, proceeds which
may arise from the Annuitant's death before the Annuity Date may be paid to the
beneficiary in cash; or they may be applied by the beneficiary for any of the
payout options we offer the Annuitant under this contract.

You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:

o You may change the beneficiary under it.
o You may surrender it for its cash value.
o You may make withdrawals.
o You may transfer shares from one subaccount to another.


Page 2 (QVIP-84)
                                     II-15

<PAGE>

                                 CONTRACT DATA

ANNUITANT'S SEX AND ISSUE AGE M-35
            DATE OF BIRTH     MAR. 15, 1949

   ANNUITANT             JOHN DOE                XX XXX XXX      CONTRACT NUMBER
ANNUITY DATE             JUL. 1, 2014          JULY 1, 1984      CONTRACT DATE

      AGENCY             R-NK 1
     --------

                       BENEFICIARY  CLASS 1 MARY DOE, WIFE
                                    CLASS 2 ROBERT DOE, SON


                     ALLOCATION OF INITIAL PURCHASE PAYMENT
                                   SUBACCOUNTS

                     BOND                               XX%
                     MONEY MARKET                       XX%
                     COMMON STOCK                       XX%
                     AGGRESSIVELY MANAGED FLEXIBLE      XX%
                     CONSERVATIVELY MANAGED FLEXIBLE    XX%



THE MAINTENANCE CHARGE IS $30.00 ANNUALLY. WE EXPLAIN THIS ON PAGE 6.

SERVICE OFFICE - PLEASE DIRECT ANY COMMUNICATION ABOUT THIS CONTRACT TO: THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, P.O. BOX 2925, PHOENIX, ARIZONA 85062





PAGE 3 (84)    

                                     II-16


<PAGE>

                               GENERAL PROVISIONS

Definitions.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.

Accumulation Period.--The period of time between the Contract Date and the
Annuity Date.

Anniversary or Contract Anniversary.--The same day and month as the Contract
Date in each later Year.

Example: If the contract date is March 9, 1983, the first anniversary is March
9, 1984. The second is March 9, 1985, and so on.

Annuitant.--The person whose name is in the window of the first page. He or she
need not be the owner.

Annuity Date.--The date the first annuity payment is due.

Business Day.--A day on which the New York Stock Exchange is open for business.

Cash Value.--Variable Account less any withdrawal charges that apply.

Code.--Internal Revenue Code of 1954, as amended.

Contingent Annuitant.--A person to whom monthly payments under a Joint and
Survivor Life Annuity will continue for life if he or she is living after the
death of the Annuitant under that Annuity. If you choose a Joint and Survivor
Life Annuity, you will, at the time you make that choice, also name the
contingent annuitant for that annuity,

Contract Year.--A year which starts on the Contract Date or on an anniversary.

Example: If the contract date is March 9, 1983, the first Contract Year starts
then and ends on March 8, 1984. The second starts on March 9, 1984 and ends on
March 8, 1985, and so on.

Earnings.--The excess, if any, of (1) variable account plus any amounts
previously withdrawn from the variable account, over (2) total purchase payments
to date.

Issue Date.--The Contract Date.

The Prudential Qualified Individual Variable Contract Account (the Account).--A
separate account of Prudential registered as a unit investment trust under the
Investment Company Act of 1940.

The Prudential Series Fund, Inc. (the Fund).--A mutual fund with separate
portfolios one or more of which you may choose as the underlying investment for
your contract. The Fund was established by Prudential. It is registered under
the Investment Company Act of 1940, as amended, as an open-end diversified
management investment company.

Service Office.--The Prudential office designated by it to service contracts
such as this. Its mailing address is the address shown on the Contract Data
page, unless Prudential specifies another address by notice to you.

Subaccount.--A division of the Account the assets of which are invested in the
shares of a corresponding portfolio of the Fund.

Subaccount Annuity Unit.--A measure used to find the amount of a variable
annuity monthly payment.

Subaccount Annuity Unit Value.--The monthly income produced by one Subaccount
Annuity Unit of a specified subaccount.

Subaccount Unit.--A measure used to find the value of your interest in a
subaccount during the accumulation period.

Subaccount Unit Value.--The dollar value of one Subaccount Unit of a specified
subaccount.

Variable Account.--During the Accumulation Period, your Variable Account for any
business day is found by multiplying your number of Subaccount Units in each
subaccount by the Subaccount Unit Value at the end of that business day and then
adding the results.

We, Our and Us.--Prudential.

You and Your.--The owner of the contract.

Contract Modifications.--Only a Prudential officer may agree to modify this
contract, and then only in writing.

Change of Annuity Date.--Unless the retirement arrangement that covers you
provides otherwise, not later than the present annuity date, you may ask us to
change that date to another date. We must have Your request in writing at our
Service Office and in a form which meets our needs. You must send the contract
to us to be endorsed. We will change the date to the one you ask for in your
request. But, unless we consent, it may not be before the first of the next
month after the date we receive your request. And, unless we consent, it may not
be after the first of the next month after the Annuitant's 75th birthday or such
earlier date as may be required by law or the applicable retirement plan.
Further, unless we consent, you may not make more than one change in the annuity
data.

Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Annuitant: and (2) while the Annuitant is
living the owner alone is entitled to (a) any contract benefit and value, and
(b) the exercise of any right and privilege granted by the contract or by us.

                            (Continued on Next Page)


Page 4 (QVIP-84)
                                      II-17




<PAGE>


                         GENERAL PROVISIONS (continued)

We will mail to the owner, at least once in each Contract Year after the first,
a statement with respect to all subaccounts in which the owner has an interest.
The statement will be as of a date not more than two months before the date of
mailing. It will show the number of Units credited and the value per Unit. We
will also send the owner a statement of the investments of the portfolios of the
Fund, the underlying investment medium for this contract.

Currency.--Any money we pay, or which is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.

Misstatement of Age.--If the Annuitant's or any contingent annuitant's stated
date of birth is not correct, we will change each benefit and the amount of each
annuity payment to that which the purchase payment would have bought for the
correct date of birth. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth.

Incontestability.--We will not contest this contract except for non-payment of
the purchase payment due on the contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If the Annuitant is living on the annuity
date and an assignment is in affect on that date, we have the right to pay the
cash value in one sum.

Asset Charges.--We will apply a Mortality Risk Charge and an Expense Risk Charge
daily at effective annual rates of 0.8% and 0.4%, respectively, on the value of
the net assets of each subaccount attributable to Subaccount Units and
Subaccount Annuity Units credited to contracts like this one. We guarantee that
the expense and mortality results of the Account will not adversely affect the
dollar amounts of values, benefits or payments under this contract.

Changes by Prudential.--We reserve the right, upon 90 days notice to you, to:

(1) change the minimum amount requirements specified for purchases, withdrawals
and transfers in the Variable Accumulation Provisions;

(2) refuse to accept any request for purchase;

(3) change the number of Subaccount Units credited, change or discontinue
subaccounts, change to a different variable contract account, or substitute fund
shares in the account (see page 8);

(4) change any or all terms and provisions of Annuity Settlement Tables on pages
14 and 15, but only with respect to any portion of an annuity settlement
deriving from purchase payments made on or after the effective date of the
change and earnings on those purchase payments;

(5) make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing the proportional
interest of the Annuitant. The instruction form may be signed and returned to
us. If for any meeting there are Fund shares for which we have not received
voting instructions, this is what we will do. We will vote Fund shares on each
matter in the same proportion as we vote the Fund shares held in the subaccount
for which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four-year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M.
in our office at the Secretary's address shown here. After this contract has
bean in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual, you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable during the accumulation period. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.

Page 5(QVIP-84)
                                     II-18

<PAGE>

                        VARIABLE ACCUMULATION PROVISIONS

Purchase Payments.--Purchase payments made through payroll deductions or similar
arrangements with an employer must be at a rate of at least $300 during any
12-month period. Any other purchase payment must be at least $50.

The initial purchase payment, reduced by any state premium taxes we may be
required to deduct, will be allocated to the subaccounts in accord with your
instructions. If, after you have made at least one purchase, we receive a
purchase payment without instructions, we will make any required deduction for
state premium taxes and allocate the balance in the same proportions as the most
recent purchase payment you made.

Example: On the Contract Date you make a $1500 purchase and allocate $5OO to
each of Subaccounts A, B and C. Later in the year you send us a $900 purchase
payment, but you don't tell us how it is to be applied. Based on the most recent
purchase, the one made on the Contract Date, we would make a $300 purchase for
each of Subaccounts A, B and C.

Crediting of Subaccount Units.--This contract will be credited with the number
of Subaccount Units which results from dividing (1) the amount of any purchase
payment allocated to a subaccount by (2) that subaccount's Unit Value for the
Business Day the purchase is made. The first purchase payment will be credited
on the first Business Day which is the later of: (a) the Contract Date, (b) the
date the purchase payment is received at the Service Office, or (c) the date we
approve the request for the contract, or on a later date if you request and we
agree. For any purchase payment after the first, the shares will be credited on
the first Business Day not earlier than the day we receive it at our Service
Office or on a later day if you request and we agree.

Subaccount Unit Value.--The Unit Value for a subaccount for any Business Day is
found by multiplying that subaccount's Net Investment Factor for that day by its
Unit Value for the last preceding Business Day. A subaccount's Net Investment
Factor for any Business Day equals (1) 1.00 plus the rate of net investment
income earned, after provision for taxes, for the period from the end of the
last preceding Business Day to the end of the current Business Day; plus (2) the
rate of asset value changes in the subaccount during the same period, minus (3)
the rates of the Mortality Risk Charge and the Expense Risk Charge (which we
describe on Page 5) for the number of calendar days involved. The Unit Value for
a subaccount and therefore the total value of shares of a subaccount credited to
you at any time and the number of Subaccount Units provided by a given purchase
payment will vary.

They will increase or decrease in accord with the investment results of the
subaccount.

The value of each Subaccount Unit was set at $1.00 on the date the first
deposits were made in the account by Prudential.

Annual Maintenance Charge.--On each contract anniversary before the annuity date
or at the time of total withdrawal we will deduct a maintenance charge from your
variable account. The amount of the charge is shown on page 3 of this contract.
If on any contract anniversary there are Subaccount Units credited to this
contract in more than one subaccount, we will divide the charge among the
subaccounts on a pro-rata basis, according to the proportionate value of each
subaccount. We will liquidate enough of your Subaccount Units or fractions of a
Subaccount Unit to pay this charge.

Withdrawals.--Unless restricted by provisions of the retirement arrangement that
covers you, you may be able to make withdrawals from your variable account on or
before the annuity date. To make a withdrawal you must ask us in writing in a
form which meets our needs. If you ask for a partial withdrawal, we will
liquidate as many full and fractional Subaccount Units as may be needed to
provide the amount asked for and any charges that apply. You must tell us the
amount and the subaccount from which it is to be withdrawn. Our consent is
needed for a partial withdrawal if (1) the amount to be withdrawn is less than
$300; or (2) it would reduce the value of your units in a subaccount to less
than $300.

If you ask for a total withdrawal you must send the contract to us. We will
liquidate all the subaccount units credited to the contract. After deducting the
Annual Maintenance Charge and the sales charges, if any, we will pay the
balance. Any amount withdrawn will be paid within seven calendar days after the
date we receive your request at our Service Office.

Withdrawal Charges (Deferred Contingent Sales Charges).--Although no sales
charges are deducted from your purchase payments when they are made, your
purchase payments may be subject to a sales charge upon withdrawal. Earnings,
defined on page 4, are not subject to sales charges. Withdrawals are considered
to consist of earnings, if any, first, then of purchase payments on a first-in,
first-out basis.

In each contract year, any purchase payments withdrawn which do not in total
exceed 10% of your variable account, valued as of the date of the first
withdrawal in that year, will not incur a sales charge. A sales charge may be
imposed on purchase payments withdrawn in excess of this 10% limitation.

                            (Continued on Next Page)
                                                     
Page 6 (QVIP-84)                                     
                                      II-19

<PAGE>

                  VARIABLE ACCUMULATION PROVISIONS (continued)

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accord with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal, the rate is 8%.

If the duration from the start of the contract 
year of purchase payment to the start of the      The charge rate
contract year of withdrawal is...                 is...
                                                        

 One Year ........................................     7%
 Two years .......................................     6%
 Three years .....................................     5%
 Four years ......................................     4%
 Five Years ......................................     3%
 Six Years .......................................     2%
 Seven years .....................................     1%
 Eight years or more .............................     0%

In determining the amount of sales charge, if any, we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so, even if that purchase payment was to a
different subaccount than that from which withdrawal is being made or if the
shares being withdrawn are no longer subject to a withdrawal charge. Depending
on the amount of the withdrawal, one or more sales charge rates may be used if
the withdrawal is of purchase payments made in more than one contract year.

Example.--

Year                          Transaction
- ----                          -----------

Contract year one           --Payment of $300 in the Money
                                 Market Subaccount
Contract year two           --Payment of $900 in the Bond
                                 Subaccount
Contract year three         --Payment of $800 in the Common
                                 Stock Subaccount

In contract year five the contractholder requests a partial withdrawal of $900
from his Common Stock subaccount, which has grown to $1200. The total value of
his variable account on the data of withdrawal is $2500, $500 more than the
total purchase payments made to date. Thus for purposes of determining sales
charge, the $9OO withdrawal is considered to consist of $500 of earnings and
$400 of purchase payments. The $500 of earnings and $250 of purchase payments
(10% of the variable account} may be withdrawn without sales charge. A sales
charge is required on the remaining $150 of purchase payment being withdrawn.

To determine the sales charge we assume that $300 of purchase payment being
withdrawn is the payment made to the Money Market Subaccount in contract year
one. The remaining $100 of purchase payment being withdrawn is assumed to be a
part of the $900 payment made to the Bond Subaccount in contract year two. Of
the first $300 purchase payment we have seen that $250 (10% of $2500) may be
withdrawn without sales charge. A 4% sales charge is due on the withdrawal of
the other $50 of the payment (4% X $50=$2). The $100 portion being withdrawn
from the second payment requires a 5% sales charge (5%X $100=$5). Thus the total
sales charge for withdrawing $900 in year five is $7.

Transfers.--You may transfer all or part of your interest in a subaccount to one
or more of the other subaccounts. To make a transfer you must ask us in writing
in a form which meets our needs. You must tell us the amount to be transferred
and the names of the subaccounts involved. Our consent is needed for the
transfer if (1) the amount to be transferred is less than the smaller of $300
and your interest in the subaccount, (2) the value of any of your Units
remaining in the subaccount after the transfer would be less than $300, or (3)
four or more transfers of Subaccount Units have been made under your contract in
the current Contract Year. The transfer will be made on the first Business Day
after we receive your request.

To make the transfer this is what we will do. First, we will liquidate, without
charge, the number of your Units in the subaccount from which the transfer is to
be made to provide the amount requested. Then, we will use that amount to
purchase Units in the subaccount to which the transfer is to be made. The result
will be that, while the contract value will not change, the total number of
Subaccount Units credited to this contract may increase or decrease depending on
the Subaccount Unit Values. The original purchase date of record used to
determine the rate of charge for any future withdrawal is not changed as a
result of a transfer.

Example.--You ask that we transfer $600 from Subaccount A to Subaccount B. The
Subaccount A Unit Value is $10 on the data of the transfer. We would liquidate
60 shares in Subaccount A to provide the $600. The share value in Subaccount B
on the data of the transfer is $5. The $600 will buy 120 shares in Subaccount B.
If the Unit Value were $20, the $600 would buy only 30 Units. While the number
of Units may have changed on the date of transfer, their value remained the
same, $600.
                            (Continued on Next Page)
Page 7(QVIP-84)
                                     II-20


<PAGE>

                  VARIABLE ACCUMULATION PROVISIONS (continued)

Changing the Number of Subaccount Units Credited.--We have the right to change
the number of Subaccount Units if we deem the Subaccount Unit Value to be either
so large or so small as to not be in your best interest, or ours. If we make
such a change, the amount of the Variable Account will not change.

Substitution of Shares.--Shares of another registered, open-end investment
company may be substituted for the shares held in the account or any subaccount
or to be purchased by future purchase payments or transfers if (1) shares in the
subaccount are no longer available for purchase or (2) in our judgement further
investment in such shares is no longer appropriate for the subaccount.

Effect of Loss of Tax-Oualified Status or Failure to Qualify.--If, for any
reason, you become ineligible to participate or cease to be a participant in the
pension, profit-sharing or annuity purchase plan or Individual Retirement
Annuity in connection with which this contract is issued, or if the plan is
discontinued or loses its tax-qualified status, we may refuse to accept further
purchase payments under this contract.

If we determine that an applicable pension, profit-sharing or annuity purchase
plan was not tax-qualified when this contract was issued, or, if applicable,
that you were not eligible to establish an Individual Retirement Annuity for
which this contract was issued, here is what we may do: (1) If, when we make the
determination, we then provide a similar contract for the non-tax-qualified
market, we may offer to exchange this contract for such a non-tax-qualified
contract. Any such exchange will be made without redemption charge, but will be
subject to any conditions or adjustment which we determine to be necessary. Or
(2), if we do not then offer a similar contract for the non-tax-qualified
market, we may terminate this contract and liquidate all the subaccount units
credited to it. After deducting the Annual Maintenance Charge and the sales
charge, if any, we will pay you the balance within seven days after the
termination of the contract.

                                  ENDORSEMENTS
                      (Only we can endorse this contract.)



Page 8 (QVIP-84)          
                                     II-21

<PAGE>


                               DEATH OF ANNUITANT

We will pay the beneficiary the proceeds promptly if we receive due proof that
the Annuitant died before the annuity date.

If the Annuitant dies before his or her 65th birthday, proceeds will be the
greater of (a) the minimum proceeds, which we define below, or (b) the amount of
your variable account (which we define on page 4) as of the date we receive due
proof of death. Minimum proceeds if no withdrawals have been made is the sum of
all of the purchase payments paid to us. Any withdrawal reduces minimum proceeds
on the date of the withdrawal in the same proportion that it reduces your
variable account on that date. Purchase payments made after a withdrawal
increase minimum proceeds by the amounts of the purchase payments.

Example: Assume total purchase payments of $10,000 and a subsequent withdrawal
of $3000 made when your variable account amounts to $12,000. The variable
account is reduced by one-fourth ($3000 -/- $12,000): therefore minimum
proceeds, which was $10,000, is also reduced by one-fourth, to S7,500. A
subsequent purchase of $5000 would increase minimum proceeds to $12,500.

If the Annuitant dies on or after his or her 65th birthday, the proceeds will be
your variable account as of the date we receive due proof of death.

If the Annuitant dies on or after the annuity date, the settlement then in
effect will govern whether and to whom we will make any payment(s).

                                  ENDORSEMENTS

                      (Only we can endorse this contract.)

Page 9 (QVIP-84)
                                     II-22

<PAGE>
                               PAYOUT PROVISIONS

Choosing an Option.--Subject to the retirement arrangement that covers you, you
may be able to have the amount of your variable account on the Annuity Date paid
to the Annuitant as an annuity under one or more of the options we describe
below. But, for any annuity settlement, we may first deduct from that amount any
charge for state premium taxes. And under some conditions we may also deduct an
Annuitization Charge as described below.

Conditions.--With respect to each option you select your right to make the
choice is subject to all these conditions: (1) You must ask for the option in
writing and in a form which meets our needs. (2) You must send the contract to
us to be endorsed. (3) For Type A, B or C you must give us proof of the date of
birth of the Annuitant and of any contingent annuitant. (4) We must have your
request, the contract and the proof(s) of the date(s) of birth before the
Annuity Date.

Your choice of an option will take effect on the Annuity Date but only if: (1)
the Annuitant is living on that date; (2) the contingent annuitant, if any, is
living on that date; (3) the first payment under the option will be at least
$20; and (4) you do not void the choice by making a later choice before the
Annuity Date.

When No Option Chosen.--If no choice of a variable or fixed-dollar annuity of
Type A, C or D, or of a fixed-dollar annuity of Type B, which types we describe
below, takes effect on the annuity date, settlement under a variable annuity of
Type B will become effective. But the conditions described in the preceding
paragraph will apply. And we have the right to require proof of the date of
birth of the Annuitant before we make payment.

Options Described.--Variable annuities and fixed-dollar annuities of the
following types may be chosen. The first payment under these options is due on
the annuity date.

Type A (Life Annuity).--We will make monthly payments for as long as the
Annuitant lives. They will end with the last one due before the Annuitant's
death.

Type B (Life Annuity, 10-Year Minimum Period).--We will make monthly payments
for as long as the Annuitant lives, with 120 monthly payments certain. Unless
otherwise stated, if the Annuitant dies before the 120th payment is payable, we
will pay the residue in one sum to the Annuitant's beneficiary if one is
designated, otherwise to the Annuitant's estate. We will compute the residue as
of the first Business Day on or after the date the Annuitant died. If the
annuity is a variable annuity, we will adjust the amount for the change in the
Subaccount Annuity Unit Value between that Business Day and the first Business
Day on or after which we receive at our Service Office the items we need for
settlement. But if the Annuitant dies after the due date of the last payment
certain, no further payments will be due.

Type C (Joint and Survivor the Annuity).--We will make monthly payments for as
long as the Annuitant or the contingent annuitant lives. Unless otherwise
stated, we will make them to the Annuitant while he or she is living. After the
Annuitant dies, we will make them to the contingent annuitant if he or she is
living. The payments will end with the last one due before the death of the
second to die of the Annuitant and the contingent annuitant.

Type D (Annuity for Specified Period).--We will make monthly payments for the
period you elect. The period may be 5, 10, 15 or 20 years. It may be a different
number of years if you request it and we agree. Unless otherwise stated, if the
Annuitant dies when one or more payments remain unpaid in the period elected, we
will pay the residue in one sum to the Annuitant's beneficiary if one is
designated, otherwise to the Annuitant's estate. We will compute the residue as
of the first Business Day on or after the date the Annuitant died. If the
annuity is a variable annuity, we will adjust the amount for the change in the
Subaccount Annuity Unit Value between that Business Day and the first Business
Day on or after which we receive at our Service Office the items we need for
settlement.

Residue Described.--For annuity, Type B, residue on any Business Day means the
then present value of such of the 120 payments as may remain unpaid. Residue
does not include the value of any payments which may become due after the 120th
payment.

For annuity Type D, residue on any Business Day means the then present value of
any unpaid payments for the specified period of the annuity.

For variable annuities of Types B and D, for the purpose of computing the
present value, we assume that the Annuity Unit Value for the Business Day as of
which the calculation is made will not change after that date. We will compute
residue at an effective interest rate of 3 1/2% a year.

Right of Withdrawal.--Unless otherwise stated when a Type D annuity is chosen,
all, or any part not less than $300 of the residue may be withdrawn. After a
withdrawal, monthly payments will stop if all the residue was withdrawn or be
reduced if part was withdrawn. If the first reduced monthly payment after a
partial withdrawal would be less than $20, we have the right to pay the residue
in one sum.

                            (Continued on Next Page)

Page (QVIP-84)
                                     II-23


<PAGE>



                         PAYOUT PROVISIONS (Continued)



Annuitization Charge.--We may deduct an Annuitization Charge from your variable
account on the last Business Day on or before the annuity date. We determine the
Annuitization Charge the same way we would determine the charge for a total
withdrawal made on the Annuity Date. (This calculation is described on pages 6
and 7.) However, as described below, a special schedule of lower charge rates
applies for certain annuitizations.

Annuitization charge rate schedules A and B are shown below. Schedule A is the
same schedule we use in calculating charges on withdrawals. In calculating
annuitization charges: we apply Schedule A rates if either (1) an Annuity of
Type A, B or C is effected less than three years after the Contract Date, or (2)
an annuity Type D is effected at any time; we apply Schedule B rates if an
annuity of Type A, B or C is effected three years or more after the Contract
Date.

Under certain conditions, if you select a Type D annuity and one or more other
types, the above provisions will require Schedule A to be applied for the Type D
annuity and may require Schedule B to be applied for the other type(s). In that
event, we will determine the portion of annuitization charge applicable to the
Type D annuity first and the portion applicable to the other annuity(ies) last.
Since withdrawals, including withdrawals to effect an annuity, are considered to
consist of earnings, if any, first, then of purchase payments on a first-in
first-out basis, this order of computation will result in a total annuitization
charge that will be less than or the same as the charge that would be produced
if the order of computation were reversed.


                                                      Annuitization      
                                                  Charge Rate Schedules  
                                                  ---------------------  
Duration                                                   A         B  
- --------                                                   -         -  
0                                                          8%        4%
1                                                          7         3
2                                                          6         2
3                                                          5         1
4                                                          4         0
5                                                          3         0
6                                                          2         0
7                                                          1         0
8 or more                                                  0         0


o Duration is determined for each purchase payment included in the amount used
to provide an annuity. Duration is measured in years from start of Contract Year
of purchase to start of Contract Year of annuitization.

Tabular Monthly Annuity.--Your Variable Account on the last Business Day on or
before the Annuity Date will be reduced by any Annuitization Charge and any
premium taxes that may apply. The balance will be used to determine the Tabular
Monthly Annuity(ies) (first monthly annuity payment(s)) based on the type(s) of
annuity chosen and in accord with the annuity settlement tables.

Amount of Fixed-Dollar Annuity.--The amount of each monthly payment will be at
least equal to the Tabular Monthly Annuity. But if we are offering greater
monthly incomes for fixed-dollar annuities on the Annuity Date, the amount of
each monthly payment will be greater than the Tabular Monthly Annuity.

Determination of the Amount of a Variable Annuity.--The number of Annuity
Units that will be used to determine the amount of monthly income for each
subaccount is found by dividing the amount of the Tabular Monthly Annuity
attributable to your investment in that subaccount by the Subaccount Annuity
Unit Value on the last Business Day on or preceding the Annuity Date. After that
the number of Annuity Units for each subaccount will remain fixed unless a
transfer is made as we describe below. The dollar amount of annuity payments
will change from month to month and may increase or decrease to reflect the
investment experience of the subaccounts involved. The actual amount of any
annuity payments after the first will be determined by multiplying the number of
Annuity Units for each subaccount by the Annuity Unit Value for that subaccount
at the end of the last Business Day which is at least five days before the
annuity payment is due, and then adding the resulting values.

Example.--The Contract Value is $10,000. Of that amount, $3000 is in Subaccount
A and $7000 is in Subaccount B. The annuity type is B and the Annuitant is age
65 on the Annuity Date. The first annuity payment equals $52.00 ($5.20 per $1000
of Contract Value). (The rate per $1000 may change as provided under Changes by
Prudential on page 5 but only for any portion of Contract Value arising from
purchases made after the date of change.) Subaccount A provides $15.60 of that
payment, and Subaccount B provides $36.40. To find the number of Annuity Units
used to determine monthly income for each Subaccount we divide each of these
amounts by the respective Annuity Unit Value for the subaccount on the Annuity
Date.

For this example assume that the Annuity Unit Value is $3 for Subaccount A, and
$2 for Subaccount B. Dividing these into the respective annuity payments
provides the number of Annuity Units to be used for each subaccount ($15.60 -/-
$3=5.200 Units for Subaccount A, and $36.40-/-$2 = 18.200 Units for Subaccount
B). To find the amount of each subsequent annuity payment we multiply the number
of Annuity Units for each subaccount by the Annuity Unit Value for that
subaccount and add the results.

                            (Continued on Next Page)

Page 11 (QVIP-84)
                                     II-24


<PAGE>


                         PAYOUT PROVISIONS (Continued)

Subaccount Annuity Unit Value.--The value of an Annuity Unit for each subaccount
was set at $1.00 on the date the first deposits were made in the Account by
Prudential. The value for any subsequent Business Day is determined by
multiplying the subaccount's Net Investment Factor for that day by its Annuity
Share Value for the last preceding Business Day.

The Net Investment Factor for each subaccount for any Business Day equals (a)
1.00 plus the rate of net investment income earned by the subaccount, after
providing for taxes, for the period from the end of the last preceding Business
Day to the end of the current Business Day, plus the rate of asset value changes
in the subaccount during the same period, minus the rate of the Asset Charge
(which we explain on page 5) for the number of calendar days involved, divided
by (b) 1.00 plus the interest rate for the number of days involved, at the
effective annual rate assumed in the calculation of the annuity rates. (See page
14.)

Transfers During the Annuity Period.--During the annuity period the person who
has the right to receive variable annuity payments may choose to have the
payments reflect the investment results of different subaccounts. Part or all of
the Annuity Units for any subaccount may be converted to a number of Annuity
Units for one or more other subaccounts. Our consent is needed if: (1) four or
more transfers between subaccounts have been made under this contract in the
current Contract Year, or (2) for any partial transfers between subaccounts,
either the number of Subaccount Annuity Units determined for each new subaccount
or the number remaining as a measure of income for each old subaccount,
multiplied by the corresponding Subaccount Annuity Unit Value on the transfer
effective date is less than $20.

The transfer between subaccounts will be made effective for the first Business
Day after the date we receive the request for transfer except that if the
request is received within seven days before an annuity payment date, it will be
made effective on the first Business Day after the annuity payment date. To find
the number of units for the new subaccount(s) this is what we do. For the
subaccount from which the transfer is to be made we multiply the number of
Annuity Units being converted by the Annuity Unit Value of that subaccount. We
divide the result by the Annuity Unit Value for the subaccount to which the
transfer is being made. The result is the number of Annuity Units for the new
subaccount.

Example.--This is to be a transfer from Subaccount A to Subaccount B for future
annuity payments. There are 1000 Annuity Units being used as a measure of income
for Subaccount A and the Annuity Unit Value for that subaccount is $2.00 on the
date of transfer. We multiply the number of Annuity Units (1000) by the Annuity
Unit Value ($2.00) and arrive at the figure $2000. The number of Units to be
used for Subaccount B is found by dividing this figure by the Annuity Unit Value
for Subaccount B. The Annuity Unit Value for Subaccount B is $1.00. In this case
the number of Units to be used for Subaccount B would be 2000 ($2000-/- $1.00).
On the other hand, if the Annuity Unit Value of Subaccount B were $4.00, only
500 Units would have been added {$2000-/-$4.00).

We may stop, suspend or modify the transfer provisions. If we do, we will give
you 30 days' notice.

Conversion of Variable Annuity to Fixed-Dollar Annuity During the Annuity
Period.--The person who has the right to receive variable annuity payments may
ask us, during the annuity period, to convert all or part of a variable annuity
to a fixed-dollar annuity. We must have the request in writing at our Service
Office and in a form which meets our needs. We will make the conversion
requested subject to the conditions given below. The effective date of the
conversion will be the first of the next month which is at least one week after
the date we receive the request, unless a different date is requested and we
consent.

Conversion is subject to these conditions: (1) the fixed-dollar annuity must be
of the same type as the variable annuity and have remaining on the conversion
date the same number of minimum or specified payments as remained under the
variable annuity on that date; (2) the present value on the conversion date of
the variable annuity, or portion of variable annuity, to be converted must be
sufficient to produce a monthly income of at least $20 under the fixed-dollar
annuity; (3) if only a portion of the variable annuity is converted, the
Subaccount Annuity Units remaining in the unconverted portion must be sufficient
to produce a monthly payment of at least $20 on the conversion date.

For the purpose of computing present value of the variable annuity, or portion
of it, being converted, we assume that the Annuity Unit Value(s) for the
Business Day as of which the calculation is made will not change after that
date. We will compute present value taking into account the remaining minimum or
specified payment period, if any, using the same interest rate(s), and, for
annuities of Types A, B and C, the same mortality table(s) that were used to
determine the Tabular Monthly Annuity on the Annuity Date. (See Annuity
Settlement Tables on page 14.) If more than one Annuity Settlement Table was
used in determining the Tabular Monthly Annuity on the Annuity Date,
corresponding rate bases will be used in determining the present value of the
variable annuity being converted. The proportion of future monthly payments
discounted on a particular basis will be equal to the proportion of the Tabular
Monthly Annuity that was determined on that basis.  

                            (Continued on Next Page)

Page 12 (QVIP-84)
                                     II-25

<PAGE>

                         PAYOUT PROVISIONS (Continued)

We will apply the present value so computed to provide a fixed-dollar annuity on
the life of the Annuitant. Monthly payments under the fixed-dollar annuity will
be at least as great as payments determined in accord with provisions of Annuity
Settlement Tables guaranteed for fixed-dollar annuity settlements under this
contract on the Annuity Date, and will take into account the number of minimum
or specified payments, if any, to be made. But the monthly payment will be
greater if we are offering greater monthly incomes for fixed-dollar annuities on
the conversion date.

Conversions may not be made from fixed-dollar annuities to variable annuities.

                                  ENDORSEMENTS
                      (Only we can endorse this contract.)



Page 13 (QVIP-84)
                                     II-26
<PAGE>


                           ANNUITY SETTLEMENT TABLES

Amounts Payable.--If the annuity date is a contract anniversary, for Annuity
Types A, B and C we will use the tables below to compute the amount of the
Tabular Monthly Annuity payment. The amounts we show for Types A and B are based
on the Annuitant's age last birthday on the annuity date. The amounts we show
for Type C are based on both the Annuitant's and the contingent annuitant's age
last birthday on the annuity date.

When we computed the amounts we show in the tables we adjusted the 1983 Table a
to an age last birthday basis, less three years; we used an interest rate of 
3 1/2% a year. For combinations of ages which we do not show, we will compute 
the Tabular Monthly Annuity on the same basis, except that if the age is over
80, the rate for age 80 will be used. We will let you know the amounts if you 
ask for them. Settlements under Annuity Types A, B and C will share in our
surplus to the extent and in the way we decide.

We computed the amounts of the Tabular Monthly Annuity we show in Table D using
an interest rate of 3 1/2%. Those amounts are not based on the age of the
annuitant.

Other forms of annuity may be provided, subject to Prudential's consent, or as  
may be required by any applicable law or regulation.                            

If the annuity date is not a contract anniversary, for each completed quarter
year after the most recent anniversary we will adjust the amounts.


                                     TABLE A
             Amount of Tabular Monthly Annuity under Annuity Type A
                   for each $1000 applied on the annuity date.

             AGE             AMOUNT            AGE           AMOUNT
              41              $3.68             61            $4.85
              42               3.71             62             4.95
              43               3.75             63             5.06
              44               3.79             64             5.17
              45               3.83             65             5.29
              46               3.87             66             5.42
              47               3.91             67             5.56
              48               3.96             68             5.71
              49               4.00             69             5.87
              50               4.06             70             6.04
              51               4.11             71             6.22
              52               4.17             72             6.42
              53               4.23             73             6.64
              54               4.29             74             6.87
              55               4.36             75             7.12
              56               4.43             76             7.39
              57               4.50             77             7.69
              58               4.58             78             8.01
              59               4.67             79             8.36
              60               4.75             80 and over    8.73 
                                                   



                                    TABLE B

             Amount of Tabular Monthly Annuity under Annuity Type B
                   for each $1000 applied on the annuity date.


             AGE             AMOUNT            AGE           AMOUNT

              41              $3.67             61            $4.79
              42               3.70             62             4.89
              43               3.74             63             4.98
              44               3.78             64             5.09
              45               3.82             65             5.20
              46               3.86             66             5.31
              47               3.90             67             5.43
              48               3.94             68             5.56
              49               3.99             69             5.70
              50               4.04             70             5.84
              51               4.09             71             5.99
              52               4.15             72             6.15
              53               4.21             73             6.31
              54               4.27             74             6.49
              55               4.33             75             6.67
              56               4.40             76             6.85
              57               4.47             77             7.04
              58               4.54             78             7.24
              59               4.62             79             7.44
              60               4.71             80 and over    7.64
              
                            (Continued on Next Page)

Page 14 (QVIP-84)
                                     II-27

<PAGE>

<TABLE>
<CAPTION>
                                                   ANNUITY SETTLEMENT TABLES (Continued)
                                                                  TABLE C
                   Amount of Tabular Monthly Annuity under Annuity Type C for each $1000 applied on the annuity date.
- -------------------------------------------------------------------------------------------------------------------------------
YOUNGER                                                          OLDER AGE
  AGE         60      61      62      63      64      65      66      67      68      69      70      71      72      73     74
        =======================================================================================================================
<S>        <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>    <C>  
   55      $4.03   $4.05   $4.07   $4.09   $4.11   $4.13   $4.15   $4.16   $4.18   $4.19   $4.21   $4.22   $4.23   $4.24  $4.25
   56       4.07    4.09    4.11    4.13    4.15    4.17    4.19    4.21    4.23    4.24    4.26    4.27    4.28    4.30   4.31
   57       4.10    4.13    4.15    4.17    4.20    4.22    4.24    4.26    4.28    4.29    4.31    4.33    4.34    4.35   4.37
   58       4.13    4.16    4.19    4.21    4.24    4.26    4.28    4.31    4.33    4.35    4.36    4.38    4.40    4.41   4.43
   59       4.17    4.20    4.22    4.25    4.28    4.31    4.33    4.35    4.38    4.40    4.42    4.44    4.46    4.48   4.49
   60       4.20    4.23    4.26    4.29    4.32    4.35    4.38    4.40    4.43    4.45    4.48    4.50    4.52    4.54   4.56
   61               4.26    4.30    4.33    4.36    4.40    4.43    4.45    4.48    4.51    4.54    4.56    4.58    4.61   4.63
   62                       4.33    4.37    4.41    4.44    4.47    4.51    4.54    4.57    4.60    4.62    4.65    4.67   4.70
   63                               4.41    4.45    4.48    4.52    4.56    4.59    4.62    4.66    4.69    4.72    4.75   4.78
   64                                       4.49    4.53    4.57    4.61    4.65    4.68    4.72    4.75    4.78    4.82   4.85
   65                                               4.57    4.62    4.66    4.70    4.74    4.78    4.82    4.85    4.89   4.92
   66                                                       4.66    4.71    4.75    4.80    4.84    4.88    4.92    4.96   5.00
   67                                                               4.76    4.81    4.86    4.90    4.95    5.00    5.04   5.08
   68                                                                       4.86    4.92    4.97    5.02    5.07    5.11   5.16
   69                                                                               4.97    5.03    5.08    5.14    5.19   5.24
   70                                                                                       5.09    5.15    5.21    5.27   5.32
   71                                                                                               5.22    5.28    5.35   5.41
   72                                                                                                       5.35    5.42   5.49
   73                                                                                                               5.50   5.57
   74                                                                                                                      5.66
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                    TABLE D

Amount of Tabular Monthly Annuity under Annuity Type D for each $1000 applied on
                               the annuity date.

                    ---------------------------------------
                        NUMBER                  MONTHLY
                       OF YEARS                 PAYMENT
                    ---------------------------------------
                          5                     $18.12
                         10                       9.83
                         15                       7.10
                         20                       5.75
                    ---------------------------------------

<PAGE>

                                  BENEFICIARY

Unless the retirement arrangement under which the contract is purchased provides
otherwise, you may designate or change a beneficiary. Your request must be in
writing and in a form which meets our needs. It will take effect only when we
file it at our Service Office; this will be after you send the contract to us to
be endorsed, if we ask you to do so. Then any previous beneficiary's interest
will end as of the date of the request. It will end then even if the Annuitant
is not living when we file the request. Unless otherwise stated, we will make
payment to the beneficiary only if the Annuitant dies before the annuity date.
Any beneficiary's interest is subject to the rights of any assignee of whom we
know.

When a beneficiary is designated, any relationship shown is to the Annuitant,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:

1. One who survives the Annuitant will have the right to be paid only if no one
in a prior class survives the Annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the Annuity Date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living, we owe him the proceeds. If none of them is living, we owe the
Annuitant's estate.

If you choose a Type B or Type D annuity for the Annuitant, the Annuitant may
designate and may subsequently change the designation of, a beneficiary to
receive any residue that may become payable under the annuity on death of the
Annuitant after the Annuity Date but before the end of the annuity's minimum or
specified period. (See Options Described and Residue Described on page 10.)

Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.

                   SETTLEMENT PROVISIONS FOR THE BENEFICIARY

Payee Defined--In these provisions the Payee means a beneficiary or a contingent
payee who has a right to receive a settlement under the contract.

Choosing an Option.--Unless the retirement arrangement that covered you provides
otherwise, a Payee may choose an annuity option for all or part of any proceeds,
residue or the then present value of any unpaid payment which become payable to
him or her in one sum. We explain residue under Residue Described on page 10.

In some cases a Payee will need our consent to choose an option. We describe
these cases under Conditions.

Options Described.--Here are the options we offer. We may also consent to other
arrangements.

We offer the same annuity options to the Payee that we offer to an Annuitant.
And we determine monthly payments for the Payee in the same way we do for an
Annuitant, except that we do not deduct any premium tax or annuitization charge
from the amount payable to the Payee. (See Options Described, Amount of
Fixed-Dollar Annuity and Determination of the Amount of a Variable Annuity on
pages 10 and 11.) If an annuity of Type A, B, or C is selected, we must have
proof of the date of birth of each person on whose life the settlement is based.

First Payment Due Date.--Unless a later date is requested when the option is
chosen, the first payment will be due on the first day of the earliest calendar
month on or after the day the Service Office has received the request for the
settlement and due proof of the Annuitant's death and such claim forms and other
evidence as may be satisfactory to us.

Conditions--Our permission is needed for an option to be used for any person
under any of these conditions:

1. The person is not a natural person who will be paid in his or her own right.

2. The person will be paid as assignee.

3. The first payment to the person under the option would be less than $20.

Death of Payee.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.

Page 16(QVIP-84)
                                     II-29

<PAGE>

                               GUIDE TO CONTENTS

                                                     Page

Contract Summary........................................2

General Provisions .....................................4
  Definitions; Contract Modifications;
  Change of Annuity Date;
  Ownership and Control;
  Currency; Misstatement of Age;
  Incontestability;
  Proof of Survival or Death; Assignment;
  Asset Charges; Changes by Prudential;
  Voting Rights; Participation

Variable Accumulation Provisions........................6
  Purchase Payments; Crediting
  of Subaccount Units; Subaccount Unit Value;
  Annual Maintenance Charge;
  Withdrawals; 
  Withdrawal Charges; Transfers;
  Changing the Number of Subaccount
  Units Credited; Substitution of Shares;
  Effect of Loss of Tax-Qualified
  Status or Failure to Qualify

Death of Annuitant .....................................9
Payout Provisions......................................10
  Choosing an Option; Conditions;
  When No Option Chosen;
  Options Described; Residue
  Described; Right of Withdrawal; Annuitization
  Charge; Tabular Monthly Annuity;
  Amount of Fixed-Dollar Annuity;
  Determination of Amount of Variable Annuity;
  Subaccount Annuity Unit Value;
  Transfers During the Annuity Period; Conversion of
  Variable Annuity to Fixed-Dollar Annuity During the
  Annuity Period

Annuity Settlement Tables .............................14
Beneficiary............................................16
Settlement Provisions for the Beneficiary..............16







Page 17


Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on the Annuity Date. Payment as stated upon death before
Annuity Date. Purchase payments payable during Annuitant's lifetime until
Annuity Date.

QVIP-84
                                     II-30



                       GUIDE TO CONTENTS

                                                           Page

Contract Summary..............................................2

General Provisions............................................4
  Definitions; Contract Modifications;
  Change of Annuity Date;
  Ownership and Control;
  Currency; Misstatement of Age;
  Incontestability; 
  Proof of Survival or Death; Assignment;
  Asset Charges; Changes by Prudential;
  Voting Rights; Participation

Variable Accumulation Provisions .............................6
  Purchase Payments; Crediting
  of Subaccount Units; Subaccount Unit Value;
  Annual Maintenance Charge;
  Withdrawals;
  Withdrawal Charges; Transfers;
  Changing the Number of Subaccount
  Units Credited; Substitution of Shares;
  Effect of Loss of Tax-Qualified
  Status or Failure to Qualify

Death of Annuitant ...........................................9
Payout Provisions............................................10
  Choosing an Option; Conditions:
  When No Option Chosen;
  Options Described; Residue
  Described; Right of Withdrawal; Annuitization
  Charge; Tabular Monthly Annuity;
  Amount of Fixed-Dollar Annuity;
  Determination of Amount of Variable Annuity;
  Subaccount Annuity Unit Value;
  Transfers During the Annuity Period; Conversion of
  Variable Annuity to Fixed-Dollar Annuity During the
  Annuity Period

Annuity Settlement Tables ...................................14
Beneficiary..................................................16
Settlement Provisions for the Beneficiary....................16

Page 17

Variable Annuity Contract with Flexible Purchase Payment - Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.

QVIP-84 (N.Y.)







                                     The Prudential Insurance Company of America
                                     Corporate Office
                                     Newark, New Jersey


   Annuitant                                               Contract Number
Annuity Date                                               Contract Date


Agency

We will make monthly payments starting on the annuity date we show in the window
of this page. We make this promise subject to all the provisions of this
contract.

Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or there is
a claim, just see one of our representatives or get in touch with one of our
offices.

Except with respect to any fixed-dollar payout which you may elect, the
benefits, payments and values under this contract are on a variable basis. They
will reflect the investment experience of the separate account to which the
contract is related; they are subject to change both up and down and are not
guaranteed as to dollar amount except as provided under the Death of Annuitant
and Settlement Provisions for the Beneficiary sections.

We make this contract available in connection with pension, profit-sharing and
annuity purchase plans and Individual Retirement Annuities intended to qualify
for special Federal Income Tax treatment under the Internal Revenue Code of
1954, as amended. In order to obtain or retain that tax treatment the exercise
of rights and privileges under the contract by the Annuitant may be restricted.
We assume no responsibility for determining that a particular plan or Individual
Retirement Annuity is so qualified, that a particular Annuitant is eligible
under the plan or Individual Retirement Annuity or that the exercise of such
rights and privileges complies with the restrictions.

The assets of the separate account, The Prudential Qualified Individual Variable
Contract Account, would have to earn an investment return of 4.7% per annum in
order that the dollar amount of annuity payments made under the Variable Payout
Provisions of this contract will not decrease. A Mortality Risk Charge and an
Expense Risk Charge are applied daily at effective annual rates of 0.8% and
0.4%, respectively (for a total of 1.2% per year), against the net assets of The
Prudential Qualified Individual Variable Contract Account attributable to
Subaccount Units and Subaccount Annuity Units under this contract.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value, determined as of the date you return it,
without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.

          Secretary                                    President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.

QVIP-84 (N.Y.)



                                  BENEFICIARY

Unless the retirement arrangement under which the contract is purchased provides
otherwise, you may designate or change a beneficiary. Your request must be in
writing and in a form which meets our needs. It will take effect only when we
file it at our Service Office; this will be after you send the contract to us to
be endorsed, if we ask you to do so. Then any previous beneficiary's interest
will end as of the date of the request. It will end then even if the Annuitant
is not living when we file the request. Unless otherwise stated, we will make
payment to the beneficiary only if the Annuitant dies before the annuity date.
Any beneficiary's interest is subject to the rights of any assignee of whom we
know.

When a beneficiary is designated, any relationship shown is to the Annuitant,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:

1. One who survives the Annuitant will have the right to be paid only if no one
in a prior class survives the Annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the Annuity Date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living then Jane is not. But if only one of them is living,
we owe him the proceeds. If none of them is living, we owe the Annuitant's
estate.

If you choose a Type B or Type D annuity for the Annuitant, the Annuitant may
designate and may subsequently change the designation of a beneficiary to
receive any residue that may become payable under the annuity on death of
the Annuitant after the Annuity Date but before the end of the annuity's
minimum or specified period. (See Options Described and Residue Described on
page 10.)

                    SETTLEMENT PROVISIONS FOR THE BENEFICIARY

Payee Defined.--In these provisions the word Payee means a beneficiary or a
contingent payee who has a right to receive a settlement under the contract.

Choosing an Option--Unless the retirement arrangement that covered you provides
otherwise, a Payee may choose an annuity option for all or part of any proceeds,
residue or the then present value of any unpaid payments which become payable
to him or her in one sum. We explain Residue Described on page 10.

In some cases a Payee will need our consent to choose an option. We describe
these cases under Conditions.

Options Described.--Here are the options we offer. We may also consent to other
arrangements.

We offer the same annuity options to the Payee that we offer to an Annuitant.
And we determine monthly payments for the Payee in the same way we do for an
Annuitant, except that we do not deduct any premium tax or annuitization charge
from the amount payable to the Payee. (See Options Described, Amount of
Fixed-Dollar Annuity and Determination of the Amount of a Variable Annuity on
pages 10 and 11.) If an annuity of Type A, B, or C is selected, we must have
proof of the date of birth of each person on whose life the settlement is based.

First Payment Due Date.--Unless a later date is requested when the option is
chosen, the first payment will be due on the first day of the earliest calender
month on or after the day the Service Office has received the request for the
settlement and due proof of the Annuitant's death and such claim forms and other
evidence as may be satisfactory to us.

Conditions.--Our permission is needed for an option to be used for any person
under any of these conditions:

1. The person is not a natural person who will be paid in his or her own right.

2. The person will be paid as assignee.

3. The first payment to the person under the option would be less than $20.

Death of Payee.--If a Payee under an option dies and if no other distribution is
shown, we will pay any residue under that option in one sum to the Payee's
estate.


Page 16 (QVIP-84) (OKLA)



                               GUIDE TO CONTENTS

                                                           Page

Contract Summary..............................................2

General Provisions ...........................................4
  Definitions; Contract Modifications; 
  Change of Annuity Date;
  Ownership and Control;
  Currency; Misstatement of Age;
  Incontestability;
  Proof of Survival or Death: Assignment;
  Asset Charges; Changes by Prudential;
  Voting Rights; Participation

Variable Accumulation Provisions ............................6
  Purchase Payments; Crediting
  of Subaccount Units; Subaccount Unit Value;
  Annual Maintenance Charge;
  Withdrawals;
  Withdrawal Charges; Transfers;
  Changing the Number of Subaccount
  Units Credited; Substitution of Shares;
  Effect of Loss of Tax-Qualified
  Status or Failure to Qualify

Death of Annuitant...........................................9
Payout Provisions...........................................10
  Choosing an Option; Conditions;
  When No Option Chosen;
  Options Described; Residue
  Described: Right of Withdrawal; Annuitization
  Charge; Tabular Monthly Annuity;
  Amount of Fixed-Dollar Annuity;
  Determination of Amount of Variable Annuity;
  Subaccount Annuity Unit Value;
  Transfers During the Annuity Period; Conversion of
  Variable Annuity to Fixed-Dollar Annuity During the
  Annuity Period

Annuity Settlement Tables ..................................14
Beneficiary.................................................16
Settlement Provisions for the Beneficiary...................16



Page 17

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.


QVIP-84 (OKLA)



                                     The Prudential Insurance Company of America
                                     Corporate Office
                                     Newark, New Jersey



   Annuitant                                                Contract Number
Annuity Date                                                Contract Date



     Agency



We will make monthly payments starting on the annuity date we show in the window
of this page. We make this promise subject to all the provisions of this
contract.

Please read this contract with care. A guide to its contents is on the last
page. A summary is on page 2. If there is ever a question about it, or there is
a claim, just see one of our representatives or get in touch with one of our
offices.

Except with respect to any fixed-dollar payout which you may elect, the
benefits, payments and values under this contract are on a variable basis. They
will reflect the investment experience of the separate account to which the
contract is related; they are subject to change both up and down and are not
guaranteed as to dollar amount except as provided under the Death of Annuitant
and Settlement Provisions for the Beneficiary sections.

We make this contract available in connection with pension, profit-sharing and
annuity purchase plans and Individual Retirement Annuities intended to qualify
for special Federal Income Tax treatment under the Internal Revenue Code of
1954, as amended. In order to obtain or retain that tax treatment the exercise
of rights and privileges under the contract by the Annuitant may be restricted.
We assume no responsibility for determining that a particular plan or Individual
Retirement Annuity is so qualified, that a particular Annuitant is eligible
under the plan or Individual Retirement Annuity or that the exercise of such
rights and privileges complies with the restrictions.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value, determined as of the date your request is
received, without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.

          Secretary                                   President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.

QVIP-84 (CAL.)
                                     II-36




                                  BENEFICIARY

Unless the retirement arrangement under which the contract is purchased provides
otherwise, you may designate or change a beneficiary. Your request must be in
writing. It will take effect only when we receive it at our Service Office. Then
any previous beneficiary's interest will end as of the date of the request. It
will end then even if the Annuitant is not living when we receive the request.
We may, upon receiving the request, require you to submit the contract for
endorsement but this action will not affect the effective date of the
beneficiary designation. Unless otherwise stated, we will make payment to the
beneficiary only if the Annuitant dies before the annuity date. Any
beneficiary's interest is subject to the rights of any assignee of whom we know.

When a beneficiary is designated, any relationship shown is to the Annuitant,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:

1. One who survives the Annuitant will have the right to be paid only if no one
in a prior class survives the Annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the Annuitant, we will pay in one sum to the Annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the Annuitant dies before the Annuity Date, we owe Jane
the proceeds if she is living at the Annuitant's death. We owe Paul and John the
proceeds if they are living but Jane is not. But if only one of them is living,
we owe him the proceeds. If none of them is living, we owe the Annuitant's
estate.

If you choose a Type B or Type D annuity for the Annuitant, the Annuitant may
designate and may subsequently change the designation of, a beneficiary to
receive any residue that may become payable under the annuity on death of the
Annuitant after the Annuity Date but before the end of the annuity's minimum or
specified period. (See Options Described and Residue Described on page 10.)

Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.

                    SETTLEMENT PROVISIONS FOR THE BENEFICIARY

Payee Defined.--In these provisions the word Payee means a beneficiary or a
contingent payee who has a right to receive a settlement under the contract.

Choosing  an  Option.--Unless  the  retirement  arrangement  that covered  you 
provides  otherwise,  a Payee may choose an annuity option  for all or  part of 
any  proceeds,  residue  or the  then present value of any unpaid  payments 
which become payable to him or her in one sum. We explain residue under Residue
Described on page 10.

In some cases a Payee will need our consent to choose an option. We describe
these cases under Conditions.

Options Described.--Here are the options we offer. We may also consent to other
arrangements.

We offer the same annuity options to the Payee that we offer to an Annuitant.
And we determine monthly payments for the Payee in the same way we do for an
Annuitant, except that we do not deduct any premium tax or annuitization charge
from the amount payable to the Payee. (See Options Described, Amount of
Fixed-Dollar Annuity and Determination of the Amount of a Variable Annuity on
pages 10 and 11.) If an annuity of Type A, B or C is selected, we must have
proof of the date of birth of each person on whose life the settlement is based.

First Payment Due Date.--Unless a later date is requested when the option is
chosen, the first payment will be due on the first day of the earliest calender
month on or after the day the Service Office has received the request for the
settlement and due proof of the Annuitant's death and such claim forms and other
evidence as may be satisfactory to us.

Conditions.--Our permission is needed for an option to be used for any person
under any of these conditions.

1.   The person is not a natural person who will be paid in his or her own
     right.

2.   The person will be paid as assignee.

3.   The first payment to the person under the option would be less than $20.

Death of Payee.--If a Payee  under an option dies and if no other distribution
is shown, we will pay any residue under that option in one sum to the Payee's
estate.

Page 16(QVIP-84) (CAL.)





                        GUIDE TO CONTENTS

                                                            Page

Contract Summary.............................................2

General Provisions ..........................................4
  Definitions; Contract Modifications;
  Change of Annuity Date;
  Ownership and Control;
  Currency; Misstatement of Age;
  Incontestability
  Proof of Survival or Death; Assignment;
  Asset Charges; Changes by Prudential;
  Voting Rights; Participation

Variable Accumulation Provisions.............................6
  Purchase Payments; Crediting
  of Subaccount Units; Subaccount Unit Value;
  Annual Maintenance Charge;
  Withdrawals;
  Withdrawal Charges; Transfers;
  Changing the Number of Subaccount
  Units Credited; Substitution of Shares;
  Effect of Loss of Tax-Qualified
  Status or failure to Qualify

Death of Annuitant...........................................9
Payout Provisions...........................................10
  Choosing an Option; Conditions;
  When No Option Chosen;
  Options Described; Residue
  Described; Right of Withdrawal; Annuitization
  Charge; Tabular Monthly Annuity;
  Amount of Fixed-Dollar Annuity;
  Determination of Amount of Variable Annuity;
  Subaccount Annuity Unit Value;
  Transfers During the Annuity Period; Conversion of
  Variable Annuity to Fixed-Dollar Annuity During the
  Annuity Period

Annuity Settlement Tables...................................14
Beneficiary.................................................16
Settlement Provisions for the Beneficiary...................16


Page 17

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during Annuitant's lifetime until Annuity Date.

QVIP--84 (CAL.)
                                     


                                  ENDORSEMENT
                      (Only we can endorse this contract)

                               ALTERATION OF TEXT

The Definitions section of the General Provisions on page 4 is amended as of the
Contract Date to add the following definitions:

Proof of Death (as required under Death of Annuitant on page 6).-- Any of the
following: (1) a copy of a certified official certificate of death; (2) a
statement by the attending physician, or an abstract of the record of the
hospital where the Annuitant died, certifying to the Annuitant's death; (3) a
copy of a decree by a court of competent jurisdiction as to a finding of death;
or (4) any other proof of death acceptable to Prudential.

The Subaccount Unit Value section of the Variable Accumulation Provisions on
page 9 is amended as of the Contract Date to further define as follows two items
which help determine the Net Investment Factor for any Business Day:

The rate of net investment income earned for any Business Day is the rate of any
dividends declared by the corresponding Portfolio of The Prudential Series Fund.
Inc., but not yet paid to the subaccount.

The rate of asset value changes in the subaccount for any Business Day is the
rate determined by dividing the value of the assets of the subaccount for that
day by the value of the assets of the subaccount for the preceding Business Day
(not considering changes resulting from new purchase payments and withdrawals)
and subtracting 1.0 from the result.

                                    The Prudential Insurance Company of America
                                    By  /s/ Isabella L. Kirchner

                                                            Secretary

VIP 3-84                                II-36



                                                           ---------------------
                                                           Limitation Provisions


                                     The Prudential Insurance Company of America
- --------------------------------------------------------------------------------

Annuitant                               Contract No.

   JOHN DOE                                  xx xxx xxx
- --------------------------------------------------------------------------------
The contract is amended at issue to include these provisions. They apply even
though the contract may state otherwise:

Non-transferable 

This contract may not be sold, assigned, discounted, or pledged for any purpose
to anyone except us.

- --------------------------------------------------------------------------------
Retirement Options

For settlements that start while the Annuitant is living:

An annuity of Type D may be chosen only if the period will not exceed the life
expectancy of the Annuitant, as we determine for persons of the same age. If
there is a contingent payee, the period may not exceed the joint life and last
survivor expectancy of the Annuitant and the contingent payee, as we determine
for persons of the same age.

- --------------------------------------------------------------------------------
Death Options

1.   All of the annuity settlement options described for individual
     beneficiaries in the contract will be available to a beneficiary entitled
     to settlement at the death of the Annuitant only if the beneficiary is the
     Annuitant's spouse. If the death of the annuitant occurs before the annuity
     date, payments to the spouse-beneficiary must start before the date the
     annuitant would have attained age 75.

     For an individual beneficiary who is someone other than the spouse, the
     choice may be made from among variable and fixed-dollar annuities of Type A
     (Life Annuity), Type B (Life Annuity, 10 year Minimum Period) and Type D
     (Annuity for a Specified Period), but only if the certain or specified
     period for any Type B or Type D annuity chosen does not exceed, on the date
     payments are to begin, the life expectancy of the payee as we determine for
     persons of the same age.

     Also, if the beneficiary is someone other than the spouse, payments to the
     beneficiary must start within one year after the Annuitant's death.

2.   If death proceeds become payable to a beneficiary who is not a natural
     person, we will pay the proceeds promptly. An annuity settlement may not be
     chosen for such a beneficiary, except that if the death giving rise to the
     payment of death proceeds occurs before the annuity date, we may consent to
     a Type D annuity, if requested for the beneficiary, provided the period
     selected does not end more than five years after the date of death.

- --------------------------------------------------------------------------------
A change might be needed later to conform this contract to the requirements of
the Internal Revenue Code, regulations or published rulings or to the
requirements of the Employee Retirement Income Security Act of 1974. If so, we
will have the right to make the change(s) without a signed request and to
provide a form of amendment to the contract.



                                 Endorsed by attachment on the Contract Date
                                 The Prudential Insurance Company of America,

                                 By /s/Isabella L. Kirchner
                                    -----------------------
                                                     Secretary


                                     The Prudential Insurance Company of America
                                     Corporate Office
                                     Newark, New Jersey



Annuitant(s)                       Contract Number

Annuity Date                       Contract Date

      Agency



We will make monthly annuity payments starting on the Annuity Date we show in
the window of this page. We make this promise subject to all the provisions of
this contract.

Please read this contract with care. A guide to its contents is on the last page
before the back cover. A summary is on page 5. If there is ever a question about
it, or if there is a claim, just see one of our representatives or get in touch
with one of our offices.

Benefits and values under this contract may be on a variable basis. Amounts
directed into one or more of the variable subaccounts will reflect the
investment experience of those subaccounts. They are subject to change both up
and down and are not guaranteed as to dollar amount except as provided under the
Death of Annuitant and Payout Provisions sections.

Right to Cancel Contract.--Not later than ten days after you get this contract.
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value, less the net asset value of any amount we
add to the contract fund (see page 8) determined as of the date your request is
received, without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.

Signed for Prudential,


          Secretary                               President


Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s} until Annuity
Date. Cash value reflect investment results.

VIP-86

<PAGE>




                                  ENDORSEMENTS
                      (Only we can endorse this contracts.)


Page 2 (VIP-86)

<PAGE>




                                CONTRACT SUMMARY

We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.

Beginning on the Annuity Date we will use your contract fund to provide an
income, as we explain on page 13, to the Annuitant named on page 3 (the First
Annuitant named there if two annuitants are named) if he or she is then living
and entitled to payment. But if two annuitants are named on page 3 and (1) the
First Annuitant is not living on the Annuity Date or (2} both annuitants are
living and you ask us to do so, we will make payment to the Co-Annuitant named
on page 3 if he or she is then living. If, on the Annuity Date, no other
settlement has been chosen, we will make monthly payments under the Interest
Payment Option. But if the amount of the initial payment would be less than $50,
the Company reserves the right to, instead, pay the cash value in one sum. We
describe the other options we offer on page 13.

Purchase payments may be made at any time until the Annuity Date. There are no
scheduled amounts or due dates. We explain this on page 8. The purchase
payments, minus any deductions for state and/or local premium taxes, will be
allocated as you direct to one or more of the subaccounts of The Prudential
Individual Variable Contract Account and/or the fixed account. Additional
amounts may also be credited to your contract fund as we describe on page 8.

We describe on page 10 the amount payable, if any, at the death of an annuitant.
If there are two annuitants and one annuitant dies before the Annuity Date, here
is what we will do. We will use any excess of minimum proceeds (the sum of all
purchase payments minus any withdrawals made) over the contract fund to increase
the value of the contract for the surviving annuitant. Otherwise, it may be paid
to the beneficiary in cash; or it may be applied by the beneficiary to either of
the payout options we offer an annuitant under this contract.

You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:

o  You may change the beneficiary(ies) under it.

o  You may surrender it for its cash value.

o  You may make withdrawals.

o  You may transfer amounts among the subaccounts and the fixed account.

o  You may remove one annuitant if two are named.


Page 5 (VIP-86)

<PAGE>



                               GENERAL PROVISIONS

[ILLEGIBLE].--We define here some of the words and [ILLEGIBLE] all through this
contract. We explain others, [ILLEGIBLE] here, in other parts of the text.

[ILLEGIBLE], and Us.--Prudential.

[ILLEGIBLE].--The owner of the Contract.

[ILLEGIBLE].--The person or persons named on the first [ILLEGIBLE] if more than
one person is so named, one of the two [ILLEGIBLE] Page 3 as First Annuitant,
the other as Co-[ILLEGIBLE]. And, in this case, the Beneficiary provisions of
[ILLEGIBLE] will be based on the death of the last survivor [ILLEGIBLE] so
named. The owner need not be an [ILLEGIBLE].

[ILLEGIBLE] beneficiary who has a right to receive a [ILLEGIBLE] under this 
contract.

[ILLEGIBLE].--The Securities and Exchange Commission.

[ILLEGIBLE].--The Prudential Individual Variable Contract [ILLEGIBLE].

[ILLEGIBLE].--The date we receive the purchase [illegible] at our Service
Office. We show the Contract Date [ILLEGIBLE].

[ILLEGIBLE].--The Contract Date.

[ILLEGIBLE].--The date the first annuity payment is due. [ILLEGIBLE] the
Annuity Date on Page 3.

Anniversary or Contract Anniversary.--The same day and [ILLEGIBLE] the Contract
Date in each later year.

Example: If the contract date is June 10, 1986, the first [ILLEGIBLE] June 10
1987. The second is June 10, [ILLEGIBLE] and so on.

[ILLEGIBLE] Year.--A year which starts on the Contract Date [ILLEGIBLE]
Anniversary.

Example: If the contract date is June 10, 1986, the first Contract Year starts
then and ends on June 9, 1987. The second starts on June 10, 1987 and ends on
June 9, 1988.

[ILLEGIBLE].--An annuitant's attained age at any time is [ILLEGIBLE] issue age
plus the length of time since the [ILLEGIBLE]. You will find the issue age(s) on
page 3.

[ILLEGIBLE].--The excess, if any, of (1) the contract fund plus [ILLEGIBLE]
previously withdrawn, over (2) total purchase [ILLEGIBLE] to date plus any
additional amounts credited by [ILLEGIBLE] as a result of such purchase
payments.

Service Office.--The office designated by Prudential to service contracts such
as this. Its mailing address is the address shown on the Contract Data page,
unless Prudential specifies another address by notice to you.

Annual Report.--Once each contract year after the first and before the Annuity
Date we will send you a report. It will show (1) the amount of the contract
fund; (2) the investment amount in each subaccount; (3) the amount in the fixed
account; (4) interest credited during the year; and (5) the interest rate that
will be credited until further notice to the amount in the fixed account. The
report will include any other data that may be currently required where this
contract is delivered. You may ask for a report like this at any time. But,
except for the report we send you once a year, we have the right to charge a fee
for each report.

Contract Modifications.--Only a Prudential officer may agree to modify this
contract, and then only in writing.

Change of Annuity Date.--Not later than the present Annuity Date, you may ask us
to change that date to another date. We must have your request in writing at our
Service Office and in a form which meets our needs. You must send the contract
to us to be endorsed if we ask you to do so. We will change the date to the one
you ask for in your request. But, unless we consent, it may not be before the
later of (1) the third contract anniversary and (2) the first of the next month
after the date we receive your request. Also, unless we consent, it may not be
after the first of the next month after the 80th birthday of the younger of the
annuitants. Further, unless we consent, you may not make more than one change in
the Annuity Date.

Removal of an Annuitant.--If a First Annuitant and a Co-Annuitant are named, we
will remove one from the contract upon: (1) receipt of your written request to
remove that annuitant; or (2) receipt of due proof that the Annuitant has died.

Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Annuitant (the First Annuitant, if two are
named); (2) while any annuitant is living the owner alone is entitled to (a)
any contract benefit and value, and (b) the exercise of any right and privilege
granted by the contract or by us; and (3) if two annuitants are named and the
First Annuitant dies while the Co-Annuitant is living, the Co-Annuitant will
become the Owner.

Currency.--Any money we pay, or which is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.

(Continued on Next Page)

Page 6 (VIP-86)

<PAGE>


                         GENERAL PROVISIONS (Continued)

Misstatement of Age or Sex.--If any annuitant's stated date of birth or sex or
both are not correct, we will change each benefit and the amount of each annuity
payment to that which the purchase payment would have bought for the correct
date of birth and sex. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth and sex.

Incontestability.--We will not contest this contract except for non-Payment of
the purchase payment due on the contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If any annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum. This contract may not be assigned to another insurance
company without our consent.

Changes by Prudential.--We reserve the right, upon 90 days notice to you to:

(1) change the minimum amount requirements specified for purchases, withdrawals
and transfers in the Contract Fund and Contract Value Options Provision:

(2) refuse to accept any request for purchase;

(3) add, change or discontinue subaccounts, change to or add a different
variable contract account, or substitute fund shares in the account (see page
9);

(4) change any or all terms and provisions of the Annuity Settlement Table on
page 15, but only with respect to any portion of an annuity settlement deriving
from purchase payments made on or after the effective date of the change and
earnings on those purchase payments; and

(5) make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing your proportional
interest. The instruction form may be signed and returned to us. If for any
meeting there are Fund shares for which we have not received voting
instructions, this is what we will do. We will vote Fund shares on each matter
in the same proportion as we vote the Fund shares held in the subaccount for
which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 a.m. to 2:00 p.m.
in our office at the Secretary's address shown here. After this contract has
been in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual, you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable on or before the Annuity Date. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.


Page 7 (VIP-86)

<PAGE>


                               PURCHASE PAYMENTS

Purchase Payments.--An initial purchase payment of at least $1,000 is payable on
the Contract Date. Further purchase payments may be made at any time while an
annuitant is living and before the Annuity Date. The amount of each payment
after the first must be at least $100. We reserve the right to establish a
maximum amount.

The initial purchase payment, minus any deductions for state and/or local
premium taxes, will be allocated to the subaccounts and/or to the fixed account
as you instruct. The minimum amount of a first allocation to a subaccount and/or
to the fixed account is $300; the minimum for subsequent allocations is $100
unless we consent to a smaller amount. If, after you have made at least one
purchase, we receive a purchase payment without instructions, we will make any
deductions for state and/or local premium taxes and allocate the balance in the
same proportions as the most recent purchase payment you made.

Additional Amounts.--During the first three contract years, and in contract
years thereafter at the discretion of the Company, we will credit an additional
1% to the amount of every purchase payment you make. The Company reserves the
right to limit such additional amounts to $1,000 in each contract year.

This additional amount will not be subject to state and/or local premium taxes.
The amount will be allocated to the subaccounts and/or to the fixed account in
the same proportions as the corresponding purchase payment.

Example 1: On the Contract Date you make a $1,500 purchase to be allocated
equally to subaccounts A, B and C. We will increase that amount by 1%, or $15,
and allocate $505 to each of Subaccounts A, B, and C. Later in the year you send
us a $900 purchase payment, but you don't tell us how it is to be applied. We
will increase that amount by 1% or $9 and, based on the most recent purchase,
the one made on the Contract Date, we would make a $303 purchase for each of
Subaccounts A, B, and C.

Example 2: If in the example above your second purchase payment had been $200
instead of $900, we would have the right not to make the purchase without first
contacting you to find out how the purchase payment is to be applied. This is
because the $200 purchase payment was not enough to make a minimum purchase of
$100 for each of the three subaccounts. The purchase would be made when we
receive your instructions at our Service Office.

                                  BENEFICIARY

You may designate or change a beneficiary. Your request must be in writing and
in a form which meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if no annuitant is living when we
file the request. Unless otherwise stated, we will make payment to the
beneficiary only if the last surviving or sole annuitant dies before the Annuity
Date. Any beneficiary's interest is subject to the rights of any assignee of
whom we know.

When a beneficiary is designated, any relationship shown is to the Annuitant
(First Annuitant if two annuitants are named on page 3) unless otherwise stated.

To show priority, we may use numbered classes, so that the class with first
priority is called class 1, the class with next priority is called class 2, and
so on. When we use numbered classes, these statements apply to beneficiaries
unless the form states otherwise: (In these provisions and in the Example, the
term annuitant refers, where two annuitants are named, to the last surviving
annuitant.)

1. One who survives the annuitant will have the right to be paid only if no one
in a prior class survives the annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the annuitant, we will pay in one sum to the annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the annuitant dies before the Annuity Date, we owe Jane
the proceeds if she is living at the annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living, we owe him the proceeds. If none of them is living, we owe the
annuitant's estate.

Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.


Page 8 (VIP-86)

<PAGE>


                                SEPARATE ACCOUNT

The Account.--The word Account, where we use it in this contract without
qualification, means the Prudential Individual Variable Contract Account (PIVCA)
and any other separate accounts that we establish. PIVCA is a unit investment
trust registered with the SEC under the Investment Company Act of 1940. It is
also subject to the laws of New Jersey. We own the assets of the Account; we
keep them separate from the assets of our general investment account. We
established the Account to support variable annuity contracts.

Subaccounts.--The PIVCA has several subaccounts. We list them on the Contract
Data page(s). You determine, using percentages, how the invested purchase amount
will be allocated among the subaccounts and/or to the fixed account. You may
choose to allocate nothing to a particular subaccount. But any allocation you
make must be at least 10%; you may not choose a fractional percent.

Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percent that is not a whole number.

The Fund.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
the PIVCA. We list these portfolios in the Contract Data pages.

Account Investments.--We use the assets of the PIVCA to buy shares in the fund.
Each subaccount is invested in a corresponding specific portfolio. Income and
realized and unrealized gains and losses from assets in each subaccount are
credited to, or charged against, the Subaccount. This is without regard to
income, gains, or losses in our other investment accounts.

We will determine the value of the assets in the PIVCA at the end of each
business day. When we use the term business day, we mean a day when the New York
Stock Exchange is open for trading. We might need to know the value of an asset
on a day that is not a business day or on which trading in that asset does not
take place. In this case, we will use the value of that asset as of the end of
the last prior business day on which trading took place.

Example: If we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.

We will always keep assets in the Account with a total value at least equal to
the amount of the investment amounts under contracts like this one. (See page
11) To the extent those assets do not exceed this amount, we use them only to
support those contracts; we do not use those assets to support any other
business we conduct. We may use any excess over this amount in any way we
choose.

Change in Investment Policy.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change.

Change of Fund.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show on the Contract Data page(s). But we would first
seek approval from the SEC and, where required, the insurance regulator where
this contract is delivered.

                                 FIXED ACCOUNT

The Fixed Account.--In addition to the subaccounts described above, there is a
fixed account to which you may direct all or part of your invested purchase
amount(s). The fixed account is funded by the general account of Prudential. The
fixed account is credited with interest as described under Guaranteed Interest
on page 12 and Excess Interest on page 12.

Fixed Account Options.--We may have more than one fixed account option. We list
the fixed account option(s) in the Contract Data pages.


Page 9 (VIP-86)

<PAGE>

                                    TRANSFERS

Transfers Among Subaccounts and into the Fixed Account.--You may transfer
amounts among subaccounts of PIVCA and into the fixed account as often as four
times a contract year. In addition, the entire amount in all subaccounts may be
transferred to the fixed account at any time. If we establish new separate
accounts, transfers into or out of these separate accounts will be allowed only
with our consent. To make a transfer, you must notify us in writing in a form
that meets our needs. The transfer will take effect on the date we receive your
notice at our Service Office.

Transfers Among Fixed Account Options and into the Subaccounts.--You may
transfer amounts among the available Fixed Account Options and into the
subaccounts only with our consent.

                               DEATH OF ANNUITANT

Sole Annuitant.--If we receive proof that an annuitant, who was the last
surviving or only annuitant named in the contract, died before the Annuity Date,
we will pay the beneficiary the proceeds promptly.

If the Annuitant dies before his or her 65th birthday, the proceeds will be the
greater of (a) minimum proceeds, which we define below, and (b) the contract
fund (which we define on page 11) as of the date we receive due proof of death.
Minimum proceeds if no withdrawals have been made is the sum of all of the
purchase payments paid to us plus any additional percentage amounts of purchase
payments we credit. Any withdrawal reduces minimum proceeds on the date of the
withdrawal in the same proportion that it reduces your contract fund on that
date. Purchase payments made after a withdrawal increase minimum proceeds by the
amount of the purchase payments plus any additional percentage amounts of
purchase payments we credit.

Example: Assume a total of purchase payments and additional amounts of $10,000
and a subsequent withdrawal of $3,000 made when your contract fund amounts to
$12,000. The contract fund is reduced by one-fourth ($3,000 / $12,000);
therefore minimum proceeds, which was $10,000, is also reduced by one-fourth, to
$7,500. A subsequent purchase of $5,000 with an additional amount credited of
$5O would increase minimum proceeds to $12,550.

If the Annuitant dies on or after his or her 65th birthday, the proceeds will be
the contract fund as of the date we receive due proof of death.

If the Annuitant dies on or after the Annuity Date, the settlement then in
effect will govern whether and to whom we will make any payment(s).

Multiple Annuitants.--If two annuitants are named in the contract and we receive
due proof that one of them died before his or her 65th birthday and before the
Annuity Date, here is what we will do. We will compare minimum proceeds,
determined as described above for death of a sole annuitant, with the amount of
your contract fund. If minimum proceeds is greater than the amount of the
contract fund, we will credit the difference to the contract fund as a death
benefit. The death benefit, if any, will be distributed among the subaccounts
and/or the fixed account in the same proportions as the contract fund was
distributed before the crediting of the death benefit.

No death benefit is payable if the Annuitant who died did so before the Annuity
Date and either: (1) the Annuitant had reached his or her 65th birthday on or
before the date of his or her death; or (2) the amount of the contract fund on
the date we received due proof of the Annuitant's death was greater than or
equal to minimum proceeds determined as described above.

The surviving annuitant may withdraw all of the contract fund, within 30 days
following the date we receive due proof of the first annuitant's death, without
paying any sales charge that might otherwise be required for a withdrawal (see
Withdrawal Charges on page 11).

When only one of the annuitants named in the contract survives, the above
provisions for Sole Annuitant will apply to that surviving annuitant.

Where two annuitants named in the contract have died and there is not sufficient
evidence that they have died otherwise than simultaneously, the proceeds of the
contract will be distributed as if the First Annuitant had survived the
Co-Annuitant.

Page 10 (VIP-86)

<PAGE>


                    CONTRACT FUND AND CONTRACT VALUE OPTIONS

Before the annuity date, you may be able to make withdrawals from the contract
fund and you may surrender this contract for its cash value.

Contract Fund.--On the contract date the contract fund is equal to the invested
purchase amount (see below) minus any of the charges described in items (f)
through (h) below which may have been due on that date. On any day after that
the contract fund is equal to what it was on the previous day, plus these items:

     (a)  any increase due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated (we explain investment amount below);

     (b)  guaranteed interest at 3% on that portion of the contract fund that is
          in the fixed account;

     (c)  any excess interest on that portion of the contract fund that is in
          the fixed account (see page 12); and

     (d)  any invested purchase amount resulting from additional purchase
          payments

minus these items:

     (e)  any decrease due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated;

     (f)  a charge against the investment amount at a rate of up to .00326816%
          a day (1.20% a year) for mortality and expense risks that we assume;

     (g)  any annual maintenance charge that we deduct (see page 12); and

     (h)  any amount charged against the contract fund for Federal or State
          income taxes.

Invested Purchase Amount.--This is the portion of the purchase payments that we
add to the contract fund. It is equal to the purchase payments, plus any
additional amounts we have credited, minus any applicable deduction for state
and/or local premium taxes.

Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment results. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate the invested purchase
amount; (2) whether or not you transfer amounts among subaccounts; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; and (4) whether or not you make any withdrawals. The account,
subaccounts, and account investments are described on page 9.

The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund that is in the fixed account.

Cash Value.--The cash value of the contract at any time is the contract fund.
minus any withdrawal charges that apply. See Withdrawal Charges below for the
period of time during which there may be a withdrawal charge.

Withdrawal Charges (Deferred Contingent Sales Charges).--Although no sales
charges are deducted from your purchase payments when they are made, your
purchase payments may be subject to a sales charge upon withdrawal or upon
surrender of this contract for its cash value. Earnings, defined on page 6, are
not subject to sales charges. Withdrawals are considered to consist of earnings,
if any, first, then of purchase payments on a first-in, first-out basis.

In each contract year, any purchase payments withdrawn which do not in total
exceed 10% of your contract fund valued as of the date of the first withdrawal
in that year, will not incur a sales charge. A sales charge may be imposed on
purchase payments withdrawn in excess of this 10% limitation.

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accord with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal, the rate is 8%.

If the duration from the start of the contract 
year of purchase payment to the start of the                The
contract year of withdrawal is...                        rate is...

One year ...............................................    7%
Two years ..............................................    6%
Three years.............................................    5%
Four years .............................................    4%
Five years .............................................    3%
Six years ..............................................    2%
Seven years ............................................    1%
Eight years or more ....................................    0%

In determining the amount of sales charge, if any, we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so even if that purchase payment was

                            (Continued on Next Page)

Page 11 (VIP-86)

<PAGE>

     CONTRACT FUND AND CONTRACT VALUE OPTIONS (Continued}

[ILLEGIBLE] to a different subaccount (and/or the fixed account) than that from
which withdrawal is being made or [ILLEGIBLE] the amount being withdrawn is no
longer subject to a withdrawal charge. Depending on the amount of the
withdrawal, one or more sales charge rates may be used if the withdrawal is of
purchase payments made in more one contract year.

Recapture of Additional Amount.--When you make a withdrawal which consists
partially or fully of purchase payments, we may recapture additional amounts
(see page 8) which we credited to your contract fund. If the duration from the
start of the contract year of purchase payment to start of the contract year of
withdrawal is less than eight years. we will recapture the exact amount of any
additional amounts credited as a result of such purchase payments. If the
duration from the start of the contract year of purchase payment to the start of
the contract year withdrawal is eight years or more, we will not recapture any
additional amounts credited as a result of such purchase payments.

     Example-- 
     Year                Transaction
     Contract year one   --Payment of  $1,000 (plus crediting
                           of $10 additional) in Subaccount A
     Contract year two   --Payment of $900 (plus crediting of
                               $9 additional) in Subaccount B
     Contract year three --Payment of $1,500 (plus crediting 
                           of $15 additional) in Subaccount C.

In contract year five the contractholder requests a partial withdrawal of $l,600
from Subaccount C which has grown to $1,900. The amount of the contract fund on
the data of withdrawal is $3,900, $466 more than the total of the purchase
payments made to date plus the additional amounts credited to date. Thus, for
purposes of determining sales charges, the $1,600 withdrawal is considered to
consist of $466 of earnings and $1,134 of purchase payments. The $466 of
earnings and $390 of purchase payments (10% of the contract fund) may be
withdrawn without sales charge. A sales charge is required on the remaining $744
of purchase payment being withdrawn.

To determine the sales charge we assume that $1,000 of purchase payment being
withdrawn is the payment made to Subaccount A in contract year one. The
remaining $134 of purchase payment being withdrawn is assumed to be a part of
the $900 payment made to Subaccount B in contract year two.

Of the first $1,000 purchase payment we have seen that $390 (10% of $3,900) may
be withdrawn without sales charge. A 4% sales charge is due on the withdrawal of
the other $61O of the payment (4% x $610 = $24.40). The $134 portion being
withdrawn from the second payment requires a 5% sales charge (5% x $134 =
$6.70). Thus the total sales charge for withdrawing $l,600 in year five is
$31.10.

In addition. since $1,134 of purchase payments is being withdrawn and the
durations from the start of the contract years of these purchase payments to the
contract year of withdrawal is less than eight years, we will recapture
additional amounts equal to $11.34 (1% of $1,134).

Annual Maintenance Charge.--On each contract anniversary before the Annuity Date
or at the time of total withdrawal we will deduct a maintenance charge from your
contract fund. The maximum amount we will deduct is shown on page 3 of this
contract. If on any contract anniversary the contract fund is allocated to more
than subaccount and/or to the fixed account, we will divide the charge on a
pro-rata basis, according to the value of each subaccount and/or the fixed
account.

Conditions for Withdrawal or Surrender.--Our consent is needed for a withdrawal
if (1) its amount is less than $300; (2) it would reduce the contract fund to
less than $300; or (3) a withdrawal was made earlier in the same contract year.

To make a withdrawal or to surrender this contract for its cash value, you must
ask us in writing in a form that meets our needs. Also, to surrender the
contract, you must send it to us. Unless we consent, any amount withdrawn will
be taken from the subaccounts and/or the fixed account in proportion to the
amount in each as of the date of the withdrawal. After deducting the Annual
Maintenance Charge and the sales charges, and recaptures of Additional Amounts,
if any, we will pay the balance.

Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.

Excess Interest.--Excess interest on that portion of the contract fund in the
fixed account may be credited in addition to the 3% guaranteed interest rate.
The rate of any excess interest is not guaranteed. It will be determined from
time to time and will continue thereafter until a new rate is determined. We may
use different rates of excess interest for different portions of the contract
fund that are in the fixed account.

Page 12(VIP--86)


<PAGE>


                                PAYOUT PROVISIONS

Choosing an Option.--You may have the amount of your contract fund on the
Annuity Date paid to the Annuitant(s) under one of the options we describe
below. If two annuitants are named in the contract, and both are living, you may
choose to have payments made to either. But, for annuity settlement, we may
first deduct from your contract fund any charge for state and/or local premium
taxes. We offer the same annuity options to the Payee that we offer to an
annuitant. And we determine monthly payments for the Payee in the same way we do
for an annuitant.

Conditions--With respect to the option(s) you select, your right to make the
choice is subject to all these conditions: (1) You must ask for the option in
writing and in a form which meets our needs. (2) You must send the contract to
us to be endorsed. (3) If we require it, you must give us proof of the date of
birth of the person on whose age an annuity payment is based. (4) We must have
your request, the contract and any required proof(s) of the date(s) of birth
before the Annuity Date.

Your choice of an option will take effect on the Annuity Date but only if: (1)
the person on whose life the annuity is be based is living on that date; (2) the
first payment under the option will be at least $50; and (3) you do not void the
choice by making a later choice before the Annuity Date.

If two annuitants are named in the Contract and both are living, settlement will
be made on the life of the first Annuitant, as named on page 3.

When No Option Chosen.--If no choice takes effect on the Annuity Date,
settlement under the Interest Payment Option will become effective.

Options Described.--When we use the word annuitant in the following paragraphs
we mean the annuitant for whom 66 annuity described was chosen and who is to
receive settlement under the annuity.

For an annuitant, the first payment under these options is due on the Annuity
Data.

For a Payee, unless a later date is requested, the first payment will be due on
the first day of the earliest calendar month on or after the day the Service
Office has received the request for the settlement and due proof of the
annuitant's death and such claim forms and other evidence as may be satisfactory
to us.

Here are the options we offer. We may also consent to other arrangements.

Life Income Option.--You may choose monthly payments for as long as the
annuitant lives, with 120 monthly payments certain.

Interest Payment Option.--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.

Supplemental Life Annuity Option.--You may choose to receive the proceeds of
this contract in the form of payments like those of any annuity or life annuity
we then regularly issue that (1) is based on United States Currency; (2) is
bought by a single sum; (3) does not provide for dividends; and (4) does not
normally provide for deferral of the first payment. For purposes of this option
only, the words we, our and us include our subsidiary company Pruco Life
Insurance Company, which has agreed to make settlements under this option.

The proceeds of this contract might be subject to a withdrawal charge if paid as
a lump sum. If so, we will apply that charge pro-rata to any portion of the
proceeds not placed under this option. For the amount placed under this option
on any date, any annuity payment will be at least 100% of what we would pay
under the chosen kind of annuity with its first payment due on its contract
date. The phrase regularly issue does not include contracts that are used to
qualify for special federal income tax treatment as a retirement plan unless
this contract has been issued as part of such a plan. At least one of the
persons on whose life this option is based must be a Payee. This option cannot
be chosen more than 30 days before the due date of the first payment. On
request, we will quote the payment that would apply for any amount placed under
the option at that time.

Residue Described.--For the Life Income Option and the Supplemental Life Annuity
Option, residue on any date means the then present value of any unpaid payments
certain. It does not include the value of any payment that may become due after
the certain period. For the Life Income Option, we will compute it at an
effective interest rate of 3 1/2% a Year. But we will use the interest rate we
used to compute the actual Life Income Option payments if they were not based on
the table in this contract. For the Supplemental Life Annuity Option, we will
use the interest rate we would use for the chosen kind of annuity with the same
provisions as to withdrawal.

Page 13 (VIP--86)


<PAGE>


                          PAYOUT PROVISIONS (Continued)

For the Interest Payment Option, residue on any date means any unpaid balance
with interest to that date.

Withdrawal of Residue.--Unless otherwise stated when the option is chosen: (1)
under the Life Income Option and the Supplemental Life Annuity Option the
residue may be withdrawn; and (2) under the Interest Payment Option all, or any
part not less than $100, of the residue may be withdrawn. If the Interest
Payment Option residue is reduced to less than $1,000, we have the right to pay
it in one sum. Under the Life Income Option and the Supplemental Life Annuity
Option, withdrawal of the residue will not affect any payments that may become
due after the certain period; the value of those payments cannot be withdrawn.
Instead, the payments will start again if they were based on the life of a
person who lives past the certain period.

                                  ENDORSEMENTS
                      (Only we can endorse this contract.)

Page 14 (VIP--86)

<PAGE>




                            ANNUITY SETTLEMENT TABLE

Amounts Payable.--If the Annuity Date is a contract anniversary, for the Life
Income Option we will use the table below to compute the amount of the annuity
payment. The amounts we show are based on the Annuitant's sex and age last
birthday on the Annuity Date.

If the Annuity Date is not a contract anniversary, for each completed quarter
year after the most recent anniversary we will adjust the amounts.

When we computed the amounts we show in the tables, we adjusted the 1983 Table a
to an age last birthday basis, less three years; we used an interest rate of
3 1/2% a year. If the age is over 80, the rate for age 80 will be used. We will
let You know the amounts if you ask for them. Settlements under the Life Income
Option will share in our surplus to the extent and in the way we decide.

Other forms of annuity may be provided, subject to Prudential's consent, or as
may be required by any applicable law or regulation.

             Amount of Annuity Payment under the Life Income Option
                   for each $1,000 applied on the Annuity Date

AGE          MALE          FEMALE          AGE          MALE          FEMALE
41           $3.88         $3.67           61           $5.25         $4.79
42            3.92          3.70           62            5.36          4.89
43            3.97          3.74           63            5.48          4.98
44            4.01          3.78           64            5.60          5.09
45            4.06          3.82           65            5.73          5.20
46            4.12          3.86           66            5.87          5.31
47            4.17          3.90           67            6.01          5.43
48            4.23          3.94           68            6.15          5.56
49            4.28          3.99           69            6.30          5.70
50            4.35          4.04           70            6.46          5.84
51            4.41          4.09           71            6.62          5.99
52            4.48          4.15           72            6.79          6.15
53            4.55          4.21           73            6.96          6.31
54            4.62          4.27           74            7.13          6.49
55            4.70          4.33           75            7.30          6.67
56            4.78          4.40           76            7.48          6.85
57            4.86          4.47           77            7.66          7.04
58            4.95          4.54           78            7.83          7.24
59            5.05          4.62           79            8.00          7.44
60            5.15          4.71           80            8.17          7.64

                                  ENDORSEMENTS
                       (Only we can endorse this contract)

Page 15 {VIP--86)

<PAGE>

                                GUIDE TO CONTENTS


                                                                            Page

Contract Data.................................................................3

Contract Summary..............................................................5

General Provisions............................................................6
  Definitions; Annual Report; Contract
  Modifications; Change of Annuity Date;
  Removal of an Annuitant;
  Ownership and Control;
  Currency; Misstatement of Age or Sex;
  Incontestability; Proof of Survival or Death:
  Assignment; Changes by Prudential;
  Voting Rights

Purchase Payments.............................................................8
  Additional Amounts

Beneficiary...............................................................3 & 8

Separate Account..............................................................9
  The Account; Subaccounts; The Fund; Account
  Investments: Change in 
  Investment Policy; Change of Fund

Fixed Account.................................................................9
 The Fixed Account; Fixed Account Options

Death of Annuitant...........................................................10

Transfers....................................................................10
  Transfers among Subaccounts and into 
  the Fixed Account; Transfers Among Fixed 
  Account Options and into the Subaccounts

Contract Fund and Contract Value Options.................................11 & 12
  Contract Fund; Invested Purchase Amount; 
  Investment Amount; Cash Value;
  Withdrawal Charges (Deferred Contingent Sales 
  Charges); Recapture of Additional Amount; 
  Annual Maintenance Charge; Conditions 
  for Withdrawal or Surrender; Guaranteed 
  Interest Excess Interest

Payout Provisions............................................................13
  Choosing an Option; Conditions;
  When No Option Chosen Options Described;
  Life Income Option Interest Payment Option;
  Supplemental Life Annuity Option;
  Residue Described Withdrawal of Residue

Annuity Settlement Table.....................................................15





Page 16 (VIP--86)

<PAGE>







Page 17 (VIP--86)


<PAGE>





Page 18


Variable Annuity Contract with Flexible Purchase Payments -- Monthly annuity
payments starting on Annuity Date. Payments as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.

VIP--86



                                  ENDORSEMENT

                      (Only we can endorse this contract.)

The provision of this contract entitled PURCHASE PAYMENTS is replaced at issue
by the following:

                                PURCHASE PAYMENTS

Purchase Payments--Purchase payments made through payroll deductions or similar
arrangements with an employer must be at a rate of at least $300 during any
12-month period. Any other purchase payment must be at least $100.

The initial purchase payment, minus any deduction for state and/or local premium
taxes, will be allocated to the subaccounts and/or to the fixed account as you
instruct. If, after you have made at least one purchase, we receive a purchase
payment without instructions, we will make any deduction for state and/or local
premium taxes and allocate the balance in the same proportion as the most recent
purchase payment you make.

Additional Amounts--During the first three contract years, and in contract years
thereafter at the discretion of the Company, we will credit an additional 1% to
the amount of every purchase payment you make. The Company reserves the right to
limit such additional amounts to $1,000 in each contract year.

This additional amount will not be subject to state and/or local premium taxes.
The amount will be allocated to the subaccounts and/or to the fixed account in
the same proportions as the corresponding purchase payment.

Example: On the Contract Date you make a $1,500 purchase to be allocated equally
to Subaccounts A, B and C. We will increase that amount by 1%, or $15, and
allocate $505 to each of Subaccounts A, B, and C. Later in the year you send us
a $900 purchase payment, but you don't tell us how it is to be applied. We will
increase that amount by 1% or $9 and, based on the most recent purchase, the one
made on the Contract Date. we would make a $303 purchase for each of Subaccounts
A, B, and C.

                                  The Prudential Insurance Company of America,
                                  By            
                                        /s/Isabella L. Kirchner
                                        -----------------------
                                                  Secretary





    Prudential                     The Prudential Insurance Company of America
    ----------                     Corporate Office
                                   Newark, New Jersey


We will make monthly annuity payments starting on the Annuity Date we show in
the window of this page. We make this promise subject to all the provisions of
this contract.

Please read this contract with care. A guide to its contents is on the last page
before the back cover. A summary is on page 5. If there is ever a question about
it, or if there is a claim, just see one of our representatives or get in touch
with one of our offices.

Benefits and values under this contract may be on a variable basis. Amounts
directed into one or more of the variable subaccounts will reflect the
investment experience of those subaccounts. They are subject to change both up
and down and are not guaranteed as to dollar amount except as provided under the
Death Of Annuitant and Payout Provisions Sections.

RIGHT TO CANCEL.--You may cancel this contract by delivering or mailing a
written notice or sending a telegram to The Prudential Insurance Company of
America, Prudential Plaza, Newark, New Jersey 07101 and by returning the
contract before midnight of the tenth day after the date you receive the
contract. Notice given by mail and return of the contract by mail are effective
on being postmarked, properly addressed and postage prepaid. The insurer must
return an amount equal to the sum of the difference between the purchase payment
and the invested premium amount plus the Contract Fund less the net asset value
of any amount we add to the contract fund (see page 8) on the date your request
is received, within ten days after it receives notice of cancellation and the
returned contract.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.

Signed for Prudential.


  /s/Isabella L. Kirchner                  /s/Joseph [ILLEGIBLE]
  -----------------------                  ---------------------
       Secretary                               President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.




       Prudential
       ----------

                                   The Prudential Insurance Company of America
                                   Corporate Office
                                   Newark, New Jersey

We will make monthly annuity payments starting on the Annuity Date we show in
the window of this page. We make this promise subject to all the provisions of
this contract.

Please read this contract with care. A guide to its contents is on the last page
before the back cover. A summary is on page 5. If there is ever a question about
it, or if there is a claim, just see one of our representatives or get in touch
with one of our offices.

Benefits and values under this contract may be on a variable basis. Amounts
directed into one or more of the variable subaccounts will reflect the
investment experience of those subaccounts. They are subject to change both up
and down and are not guaranteed as to dollar amount except as provided under the
Death of Annuitant and Payout Provisions sections.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its net asset value, less the net asset value of any amount we
add to the contract fund (see page 8) determined as of the date you return it,
without redemption charge.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.



Signed for Prudential,
                    
          /s/Isabella L. Kirchner         /s/Joseph [ILLEGIBLE]  
          -----------------------         ---------------------  
                 Secretary                       President

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.



                                 CONTRACT DATA


ANNUITANT(S)        JOHN DOE                       XX XXX XXX    CONTRACT NUMBER
                    MARY DOE
ANNUITY DATE        JULY 25, 2016               JULY 25, 1986    CONTRACT DATE
                  

      AGENCY        R-NK 1



                 FIRST ANNUITANT:
                      NAME                   JOHN DOE
                      SEX AND ISSUE AGE      M-35
                      DATE OF BIRTH          6/10/51

                 CO-ANNUITANT:
                          NAME               MARY DOE
                          SEX AND ISSUE AGE  F-32
                          DATE OF BIRTH      10/1/54

                 BENEFICIARY:       CLASS 1-ROBERT DOE
                                            SON OF ANNUITANTS
                                    CLASS 2-BARBARA SMITH
                                            SISTER OF CO-ANNUITANT


                     ALLOCATION OF INITIAL PURCHASE PAYMENT
                                       
                     BOND                               20%
                     MONEY MARKET                       20%
                     COMMON STOCK                       20%
                     AGGRESSIVELY MANAGED FLEXIBLE      10%
                     CONSERVATIVELY MANAGED FLEXIBLE    10%
                     FIXED ACCOUNT                      20%


YOUR  PURCHASE  PAYMENTS  MAY BE  SUBJECT  TO A  SALES  CHARGE  OF UP TO 8% UPON
WITHDRAWAL OR UPON  SURRENDER OF THIS CONTRACT FOR ITS CASH VALUE,  AS DESCRIBED
ON PAGES 11 AND 12.

THE MAINTENANCE CHARGE IS UP TO $30.00 ANNUALLY. WE EXPLAIN THIS ON PAGE 12.

SERVICE  OFFICE - PLEASE  DIRECT ANY  COMMUNICATION  ABOUT THIS CONTRACT TO: THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, P.O. BOX 2925, PHOENIX, ARIZONA 85062.

                               ***** NOTICE *****
          
THIS  IS A LEGAL  CONTRACT  BETWEEN  YOU  AND  PRUDENTIAL.  READ  YOUR  CONTRACT
CAREFULLY. 

Page 3(VIP-86)(MN)




                         GENERAL PROVISIONS (Continued}

Misstatement of Age or Sex.--If any annuitant's stated date of birth or sex or
both are not correct, we will change each benefit and the amount of each annuity
payment to that which the purchase payment would have bought for the correct
date of birth and sex. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth and sex.

Incontestability.--We will not contest this contract except for non-payment of
the purchase payment due on the contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If any annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum. This contract may not be assigned to another insurance
company without our consent.

Changes by Prudential.--We reserve the right, upon 90 days notice to you to:

(1) change the minimum amount requirements specified for purchases, withdrawals
and transfers in the Contract Fund and Contract Value Options Provision;

(2) refuse to accept any request for purchase;

3) add, change or discontinue subaccounts, change to or add a different variable
contract account, or substitute fund shares in the account (see page 9);

(4) change any or all terms and provisions of the Annuity Settlement Table on
page 15, but only with respect to any portion of an annuity settlement deriving
from purchase payments made on or after the effective date of the change and
earnings on those purchase payments; and

(5) make any changes required by law.

Minimum Legal Values.--The cash values and annuity benefit values in this
contract are at least as large as those set by law where it is delivered. Where
required, we have given the insurance regulator a detailed statement of how we
compute values and benefits.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing your proportional
interest. The instruction form may be signed and returned to us. If for any
meeting there are Fund shares for which we have not received voting
instructions, this is what we will do. We will vote Fund shares on each matter
in the same proportion as we vote the Fund shares held in the subaccount for
which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 a.m. to 2:00 p.m.
in our office at the Secretary's address shown here. After this contract has
been in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual, you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable on or before the Annuity Date. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.

Page 7 (VIP-86) Y
                                      C-49



                         GENERAL PROVISIONS (Continued)

Misstatement of Age or Sex.--If any annuitant's stated date of birth or sex or
both are not correct, we will change each benefit and the amount of each annuity
payment to that which the purchase payment would have bought for the correct
date of birth and sex. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a Year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth and sex.

Incontestability.--We will not contest this contract except for non-payment of
the purchase payment due on the contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If any annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum. This contract may not be assigned to another insurance
company without our consent.

Changes by Prudential.--We reserve the right, upon 90 days notice to you to:

(1)  change the minimum amount requirements specified for purchases, withdrawals
     and transfers in the Contract Fund and Contract Value Options Provision;

(2)  refuse to accept any request for purchase;

(3)  add, change or discontinue subaccounts, change to or add a different
     variable contract account, or substitute fund shares in the account (see
     page 9);

(4)  change any or all terms and provisions of the Annuity Settlement Table on
     page 15, but only with respect to any portion of an annuity settlement
     deriving from purchase payments made on or after the effective date of the
     change and earnings on those purchase payments; and

(5)  make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing your proportional
interest. The instruction form may be signed and returned to us. If for any
meeting there are Fund shares for which we have not received voting instructions
this is what we will do. We will vote Fund shares on each matter in the same
proportion as we vote the Fund shares held in the subaccount for which we did
receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 a.m. to 2:00 p.m.
in our office at the Secretary's address shown here. After this contract has
been in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual, you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable on or before the Annuity Date. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.

Page 7 (VIP-86) (OK)
                                      C-50


                         GENERAL PROVISIONS (Continued)

Misstatement of Age or Sex.--If any annuitant's stated date of birth or sex or
both are not correct, we will change each benefit and the amount of each annuity
payment to that which the purchase payment would have bought for the correct
date of birth and sex. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth and sex.

Incontestability.--This contract will be incontestable after its contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If any annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum. This contract may not be assigned to another insurance
company without our consent.

Changes by Prudential.--We reserve the right, upon 90 days notice to you, to:

(1) add, change or discontinue subaccounts, change to or add a different
variable contract account, or substitute fund shares in the account (see page
9); and

(2) make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing your proportional
interest. The instruction form may be signed and resumed to us. If for any
meeting there are Fund shares for which we have not received voting
instructions, this is what we will do. We will vote Fund shares on each matter
in the same proportion as we vote the Fund shares held in the subaccount for
which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 a.m. to 2:00 p.m.
in our office at the Secretary's address shown here. After this contract has
been in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual, you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable on or before the Annuity Date. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.

Page 7 (VIP-86) (S.C.)
                                     



                    PURCHASE PAYMENTS


Purchase Payments.--An initial payment of at least $1,000 is payable on the
Contract Date. Further purchase payments may be made at any time while an
annuitant is living and before the Annuity Date. The amount of each payment
after the first must be at least $100. We reserve the right to establish a
maximum amount.

The initial purchase payment, minus any deduction for state and/or local premium
taxes, will be allocated to the subaccounts and/or to the fixed account as you
instruct. The minimum amount of a first allocation to a subaccount and/or to the
fixed account is $300; the minimum for subsequent allocations is $100 unless we
consent to a smaller amount. If after you have made at least one purchase, we
receive a purchase payment without instructions, we will make any deduction for
state and/or local premium taxes and allocate the balance in the same
proportions as the most recent purchase payment you made.

Additional Amounts.--During the first three contract years, and in contract
years thereafter at the discretion of the Company, we will credit an additional
1% to the amount of every purchase payment you make. The Company reserves the
right to limit such additional amounts to $1,000 in each contract year.

This additional amount will not be subject to state and/or local premium taxes.
The amount will be allocated to the subaccounts and/or to the fixed account in
the same proportions as the corresponding purchase payment.

Example 1: On the Contract Date you make a $1,500 purchase to be allocated
equally to subaccount A, B, and C. We will increase that amount by 1%, or $15,
and allocate $505 to each of Subaccounts A, B, and C. Later in the year you send
us a $900 purchase payment, but you don't tell us how it is to be applied. We
will increase that amount by 1% or $9 and, based on the most recent purchase,
the one made on the Contract Date, we would make a $303 purchase for each of
Subaccounts A, B, and C.

Example 2: If in the example above your second purchase payment had been $200
instead of $900, we would have the right not to make the purchase without first
contacting you to find out how the purchase payment is to be applied. This is
because the $200 purchase payment was not enough to make a minimum purchase of
$100 for each of the three subaccounts. The purchase would be made when we
receive your instructions at our Service Office.

                                  BENEFICIARY

You may designate or change a beneficiary. Your request must be in writing and
in a form which meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if no annuitant is living when we
file the request. Unless otherwise stated, we will make payment to the
beneficiary only if the last surviving or sole annuitant dies before the Annuity
Date. Any beneficiary's interest is subject to the rights of any assignee of
whom we know.

When a beneficiary is designated, any relationship shown is to the Annuitant
(First Annuitant if two annuitants are named on page 3) unless otherwise stated.

To show priority, we may use numbered classes, so that the class with first
priority is called class 1, the class with next priority is called class 2, and
so on. When we use numbered classes, these statements apply to beneficiaries
unless the form states otherwise: (In these provisions and in the Example the
term annuitant refers, where two annuitants are named, to the last surviving
annuitant.)

1. One who survives the annuitant will have the right to be paid only if no one
in a prior class survives the annuitant.

2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the annuitant.

3. Two or more in the same class who have the right to be paid will be paid in
equal shares.

4. If none survives the annuitant, we will pay in one sum to the annuitant's
estate.

Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. If the annuitant dies before the Annuity Date, we owe Jane
the proceeds if she is living at the annuitant's death. We owe Paul and John the
proceeds if they are living then but Jane is not. But if only one of them is
living, we owe him the proceeds. If none of them is living, we owe the
annuitant's estate.

Page 8 (VIP-86) (OK)
                                      C-52



                    CONTRACT FUND AND CONTRACT VALUE OPTIONS

Before the annuity date, you may be able to make withdrawals from the contract
fund and you may surrender this contract for its cash value.

Contract Fund.--On the contract date the contract fund is equal to the invested
purchase amount (see below) minus any of the charges described in items (f)
through (i) below which may have been due on that date. On any day after that
the contract fund is equal to what it was on the previous day, plus these items:

     (a)  any increase due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated (we explain investment amount below);

     (b)  guaranteed interest at 3% on that portion of the contract fund that is
          in the fixed account:

     (c)  any excess interest on that portion of the contract fund that is in
          the fixed account (see page 12): and

     (d)  any invested purchase amount resulting from additional purchase
          payments

minus these items:

     (e)  any decrease due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated;

     (f)  a charge against the investment amount at a rate of up to .00326816% a
          day (1.20% a year) for mortality and expense risks that we assume;

     (g)  any annual maintenance charge that we deduct (see page 12);

     (h)  any amount charged against the contract fund for Federal or State
          income taxes; and

     (i)  any withdrawals, withdrawal charges, and recapture of additional
          amounts.

Invested Purchase Amount.--This is the portion of the purchase payments that we
add to the contract fund. It is equal to the purchase payments, plus any
additional amounts we have credited, minus any applicable deduction for state
and/or local premium taxes.

Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment results. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate the invested purchase
amount: (2) whether or not you transfer amounts among subaccounts; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; and (4) whether or not you make any withdrawals. The account,
subaccounts, and account investments are described on page 9.


The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund that is in the fixed account. 

Cash Value.--The cash value of the contract at any time is the contract fund,
minus any withdrawal charges that apply, minus any Additional Amount which is
subject to recapture. See Withdrawal Charges below for the period of time during
which there may be a withdrawal charge.

Withdrawal Charges (Deferred Contingent Sales Charges).--Although no sales
charges are deducted from your purchase payments when they are made, your
purchase payments may be subject to a sales charge upon withdrawal or upon
surrender of this contract for its cash value. Earnings, defined on page 6, are
not subject to sales charges. Withdrawals are considered to consist of earnings,
if any, first, then of purchase payments on a first-in, first-out basis.

In each contract year, any purchase payments withdrawn which do not in total
exceed 10% of your contract fund valued as of the date of the first withdrawal
in that year, will not incur a sales charge. A sales charge may be imposed on
purchase payments withdrawn in excess of this 10% limitation.

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accord with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal, the rate is 8%.

If the duration from the start of the contract 
year of purchase payment to the start of the                The
contract year of withdrawal is...                         rate is...

One year...................................................  7%
Two years .................................................  6%
Three years................................................  5%
Four years.................................................  4%
Five years.................................................  3%
Six years..................................................  2%
Seven years................................................  1%
Eight years or more........................................  0%


In determining the amount of sales charge, if any, we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so even if that purchase payment was

                            (Continued on Next Page)


Page 11 (VIP-86)
                                      C-53




                    CONTRACT FUND AND CONTRACT VALUE OPTIONS

Before the annuity date, you may be able to make withdrawals from the contract
fund and you may surrender this contract for its cash value.

Contract Fund.--On the contract date the contract fund is equal to the invested
purchase amount (see below) minus any of the charges described in items (f)
through (i) below which may have been due on that date. On any day after that
the contract fund is equal to what it was on the previous day plus these items:

     (a)  any increase due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated (we explain investment amount below);

     (b)  guaranteed interest at 3% on that portion of the contract fund that is
          in the fixed account:

     (c)  any excess interest on that portion of the contract fund that is in
          the fixed account (see page 12); and

     (d)  any invested purchase amount resulting from additional purchase
          payments

minus these items:

     (e}  any decrease due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated;

     (f)  a charge against the investment amount at a rate of up to .00326816% a
          day (1.20% a year) for mortality and expense risks that we assume;

     (g)  any annual maintenance charge that we deduct (see page 12);

     (h)  any amount charged against the contract fund for Federal or State
          income taxes; and

     (i)  any withdrawals, withdrawal charges and recapture of additional
          amounts.

Invested Purchase Amount.--This is the portion of the purchase payments that we
add to the contract fund. It is equal to the purchase payments, plus any
additional amounts we have credited, minus any applicable deduction for state
and/or local premium taxes.

Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment results. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate the invested purchase
amount; (2) whether or not you transfer amounts among subaccounts; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; and (4) whether or not you make any withdrawals. The account,
subaccounts, and account investments are described on page 9.

The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund that is in the fixed account.

Cash Value.--The cash value of the contract at any time is the contract fund,
minus any withdrawal charges that apply, minus any Additional Amount which is
subject to recapture. See Withdrawal Charges below for the period of time during
which there may be a withdrawal charge. The portion of any surrender value that
comes from the fixed account will not be less than the minimum required by
statute where this contract is delivered.

Withdrawal Charges (Deferred Contingent Sales Charges).--Purchase payments may
be subject to a sales charge upon withdrawal or upon surrender of this contract
for its cash value. Earnings, defined on page 6, are not subject to sales
charges. Withdrawals are considered to consist of earnings, if any, first, then
of purchase payments on a first-in, first-out basis.

In each contract year any purchase payments withdrawn which do not in total
exceed 10% of your contract fund valued as of the date of the first withdrawal
in that year will not incur a sales charge. A sales charge may be imposed on
purchase payments withdrawn in excess of this 10% limitation.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is 8% if the contract year of purchase payment is the same as the contract year
of withdrawal, otherwise as follows:

Duration from start of contract year of
payment to the start of the contract
year of withdrawal is...                                          Rate

One Year ........................................................  7%
Two Years........................................................  6%
Three Years......................................................  5%
Four years.......................................................  4%
Five Years.......................................................  3%
Six Years........................................................  2%
Seven Years......................................................  1%
Eight years or more..............................................  0%

We will consider that any purchase payment withdrawn is the first purchase
payment made which has not previously been withdrawn even if that purchase
payment was
                            (Continued on Next Page)

Page 11 (VIP-86) (S.C.)
                                      C-54



                    CONTRACT FUND AND CONTRACT VALUE OPTIONS

Before the annuity date, you may be able to make withdrawals from the contract
fund and you may surrender this contract for its cash value.

Contract Fund.--On the contract date the contract kind is equal to the invested
purchase amount (see below) minus any of the charges described in items (f)
through (i) below which may have been due on that date. On any day after that
the contract fund is equal to what it was on the previous day, plus these items:

     (a)  any increase due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated (we explain investment amount below);

     (b)  guaranteed interest at 3% on that portion of the contract fund that is
          in the fixed account;

     (c)  any excess interest on that portion of the contract fund that is in
          the fixed account (see page 12); and

     (d)  any invested purchase amount resulting from additional purchase
          payments

minus these items:

     (e)  any decrease due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated;

     (f)  a charge against the investment amount at a rate of up to .00326816% a
          day (1.20% a year) for mortality and expense risks that we assume;

     (g)  any annual maintenance charge that we deduct (see page 12);

     (h)  any amount charged against the contract fund for Federal or State
          income taxes; and

     (i)  any withdrawals, withdrawal charges, and recapture of additional
          amounts.

Invested Purchase Amount.--This is the portion of the purchase payments that we
add to the contract fund. It is equal to the purchase payments, plus any
additional amounts we have credited, minus any applicable deduction for state
and/or local premium taxes.

Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment results. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate the invested purchase
amount; (2) whether or not you transfer amounts among subaccounts; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; and (4) whether or not you make any withdrawals. The account
subaccounts and account investments are described on page 9.

The Investment amount at any time is equal to the contract fund, minus the
portion of the contract fund that is in the fixed account.

Cash Value.--The cash value of the contract at any time is the contract fund.
minus any withdrawal charges that apply, minus any Additional Amount which is
subject to recapture. See Withdrawal Charges below for the period of time during
which there may be a withdrawal charge.

Withdrawal Charges (Deferred Contingent Sales Charges).--Although no sales
charges are deducted from your purchase payments when they are made, your
purchase payments may be subject to a sales charge upon withdrawal or upon
surrender of this contract for its cash value. Earnings, defined on page 6, are
not subject to sales charges. Withdrawals are considered to consist of
earnings, if any, first, then of purchase payments on a first-in, first-out
basis.

In each contract year, any purchase payments withdrawn which do not in total
exceed 10% of your contract fund valued as of the date of the first withdrawal
in that year, will not incur a sales charge. A sales charge may be imposed on
purchase payments withdrawn in excess of this 10% limitation.

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accord with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal, the rate is 8%.

If the duration from the start of the contract year of
purchase payment to the start of the contract year of            The
withdrawal is...                                             rate is...

One year .....                                                   7%
Two years ........                                               6%
Three years .......                                              5%
Four years .........                                             4%
Five years ...........                                           3%
Six years ...........                                            2%
Seven years ..........                                           1%
Eight years or more ......                                       0%

In determining the amount of sales charge, if any, we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so even if that purchase payment was 

                            (Continued on Next Page)

Page 11 (VIP-86) Y
                                     


                        CONTRACT FUND AND VALUE OPTIONS

Before the annuity date, you may be able to make withdrawals from the contract
fund and you may surrender this contract for its cash value.

Contract Fund.--On the contract date the contract fund is equal to the invested
purchase amount (see below) minus any of the charges described in items (f)
through (i) below which may have been due on that date. On any day after that
the contract fund is equal to what it was on the previous day, plus these items.

     (a)  any increase due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated (we explain investment amount below);

     (b)  guaranteed interest at 3% on that portion of the contract fund that is
          in the fixed account;

     (c)  any excess interest on that portion of the contract fund that is in
          the fixed account (see page 12); and

     (d)  any invested purchase amount resulting from additional purchase
          payments

minus these items:

     (e)  any decrease due to investment results in the value of the subaccounts
          to which that portion of the contract fund that is in the investment
          amount is allocated;

     (f)  a charge against the investment amount at a rate of up to .00326816% a
          day (1.20% a year) for mortality and expense risks that we assume;

     (g)  any annual maintenance charge that we deduct (see page 12);

     (h)  any amount charged against the contract fund for Federal or State
          income taxes; and

     (i)  any withdrawals, withdrawal charges and recapture of additional
          amounts.

Invested Purchase Amount.--This is the portion of the purchase payments that we
add to the contract fund. It is equal to the purchase payments, plus any
additional amounts we have credited, minus any applicable deduction for state
and/or local premium taxes.

Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment results. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate the invested purchase
amount; (2) whether or not you transfer amounts among subaccounts; (3) the
investment performance of the subaccounts to which amounts are allocated or
transferred; and (4) whether or not you make any withdrawals. The account,
subaccounts, and account investments are described on page 9.

The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund that is in the fixed account.

Cash Value.--The cash value of the contract at any time the contract fund, minus
any withdrawal charges that apply, minus any Additional Amount which is subject
to recapture. See Withdrawal Charges below for the period of time during which
there may be a withdrawal charge.

We will usually pay any cash value or withdrawal promptly. But we have the right
to postpone paying it for up to six months. If we do so for more than 30 days we
will pay interest at the rate of at least 3% a year.

Withdrawal Charges (Deferred Contingent Sales Charges).--Although no sales
charges are deducted from your purchase payments when they are made, your
purchase payments may be subject to a sales charge upon withdrawal or upon
surrender of this contract for its cash value. Earnings, defined on Page 6, are
not subject to sales charges. Withdrawals are considered to consist of earnings,
if any, first, then of purchase payments on a first-in, first-out basis.

In each contract year, any purchase payments withdrawn which do not in total
exceed 10% of your contract fund valued as of the date of the first withdrawal
in that year, will not incur a sales charge. A sales charge may be imposed on
purchase payments withdrawn in excess of this 10% limitation.

The amount of any sales charge imposed on the withdrawal of a purchase payment
varies with the number of contract years that have elapsed since the purchase
payment was made.

When you make a withdrawal, the rate of sales charge applied against any
purchase payments or portion of a purchase payment that is subject to a charge
is determined in accord with the following:

If the contract year of purchase payment is the same as the contract year of
withdrawal the rate is 8%. 

If the duration from the start of the contract 
year of purchase payment to the start of the                The 
contract year of withdrawal is...                         rate is...

One year..................................................    7%
Two years.................................................    6%
Three years...............................................    5%
Four years................................................    4%
Five years................................................    3%
Six years.................................................    2%
Seven years...............................................    1%
Eight years or more.......................................    0%

In determining the amount of sales charge, if any, we will consider that any
purchase payment withdrawn is the first purchase payment made which has not
previously been withdrawn. This is so even if that purchase payment was

                            (Continued on Next Page)


Page 11 (VIP-86) (WI)
                                      



              CONTRACT FUND AND CONTRACT VALUE OPTIONS (Continued)

allocated to a different subaccount (and/or the fixed account) than that from
which withdrawal is being made or if the amount being withdrawn is no longer
subject to a withdrawal charge. One or more sales charge rates may be used if
the withdrawal is of purchase payments made in more than one contract year.

Recapture of Additional Amount.--When you make a withdrawal which consists
partially or fully of purchase payments, we may recapture additional amounts
(see page 8) which we credited to your contract fund. If the duration from the
start of the contract year of purchase payment to the start of the contract year
of withdrawal is less than eight years, we will recapture the exact amount of
any additional amounts credited as a result of such purchase payments. If the
duration from the start of the contract year of purchase payment to the start of
the contract year of withdrawal is eight years or more. We will not recapture
any additional amounts credited as a result of such purchase payments.

Example.--
Year                                  Transaction
- ----                                  -----------
Contract year one                   --Payment of $1,000 (plus crediting of $10
                                      additional) in Subaccount A

Contract year two                   --Payment of $900 (plus crediting of $9 
                                      additional) in Subaccount B

Contract year three                 --Payment of $1,500 (plus crediting of $15
                                      additional) in Subaccount C.

In contract year five the contractholder requests a partial withdrawal of $1,600
from Subaccount C which has grown to $1,900. The amount of the contract fund on
the date of withdrawal is $3,900, $466 more than the total of the purchase
payments made to date plus the additional amounts credited to date. Thus, for
purposes of determining sales charges, the $1,600 withdrawal is considered to
consist of $466 of earnings and $1,134 of purchase payments. The $466 of
earnings and $390 of purchase payments (10% of the contract fund) may be
withdrawn without sales charge. A sales charge is required on the remaining $744
of purchase payment being withdrawn.

To determine the sales charge we assume that $1,000 of purchase payment being
withdrawn is the payment made to Subaccount A in contract year one. The
remaining $134 of purchase payment being withdrawn is assumed to be a part of
the $900 payment made to Subaccount B in contract year two.

Of the first $1,000 purchase payment we have seen that $390 (10% of $3.900) may
be withdrawn without sales charge. A 4% sales charge is due on the withdrawal of
the other $610 of the payment (4% x $610 = $24.40). The $134 portion being
withdrawn from the second payment requires a 5% sales charge (5% x $134 =
$6.70). Thus the total sales charge for withdrawing $1,600 in year five is
$31.10.

In addition, since $1,134 of purchase payments is being withdrawn and the
durations from the start of the contract years of these purchase payments to the
contract year of withdrawal is less than eight years, we will recapture
additional amounts equal to $11.34 (1% of $1,134).

Annual Maintenance Charge.--On each contract anniversary before the Annuity
Date or at the time of total withdrawal we will deduct a maintenance charge
from your contract fund. The maximum amount we will deduct is shown on page
3 of this contract. If on any contract anniversary the contract fund is
allocated to more than one subaccount and/or to the fixed account, we will
divide the charge on a pro-rata basis, according to the value of each
subaccount and/or the fixed account. If no portion of a premium has been
allocated to the fixed account in the prior contract year, the portion of
the charge taken from the fixed account will not be more than the amount of
excess interest credited during the year.

Conditions for Withdrawal or Surrender.--Our consent is needed for a
withdrawal if (1) its amount is less than $300, (2) it would reduce the
contract fund to less than $300. or (3) a withdrawal was made earlier in
the same contract year. Also, we have the right to defer paying the portion
of any withdrawal or surrender that comes from the fixed account for up to
six months. If we do so for more than thirty days, we will pay interest at
3% a year.

To make a withdrawal or to surrender this contract for its cash value, you must
ask us in writing in a form that meets our needs. Also, to surrender the
contract, you must send it to us. Unless we consent, any amount withdrawn will
be taken from the subaccounts and/or the fixed account in proportion to the
amount in each as of the date of the withdrawal. After deducting the Annual
Maintenance Charge and the sales charges, and recaptures of Additional Amounts,
if any, we will pay the balance.

Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.

Excess Interest.--Excess interest on that portion of the contract fund in
the fixed account may be credited in addition to the 3% guaranteed interest
rate. The rate of any excess interest is not guaranteed. It will be
determined from time to time and will continue thereafter until a new rate
is determined. We may use different rates of excess interest for different
portions of the contract fund that are in the fixed account.

Page 12 (VIP-86) (S.C.)
                                      


           
              CONTRACT FUND AND CONTRACT VALUE OPTIONS (Continued)

allocated to a different subaccount (and/or the fixed account) than that from
which withdrawal is no longer subject to a withdrawal charge. Depending on the
amount of the withdrawal, one or more sales charge rates may be used if the
withdrawal is of purchase payments made in more than one contract year.

Recapture of Additional Amount.--When you make a withdrawal which consists
partially or fully of purchase payments, we may recapture additional amounts
(see page 8) which we credited to your contract fund. If the duration from the
start of the contract year of purchase payment to the start of the contract year
of withdrawal is less than eight years, we will recapture the exact amount of
any additional amounts credited as a result of such purchase payments. If the
duration from the start of the contract year of purchase payment to the start of
the contract year of withdrawal is eight years or more, we will not recapture
any additional amounts credited as a result of such purchase payments.

Example.--
Year                                         Transaction
- ----                                         -----------
Contract year one                          --Payment of $1,000 (plus crediting
                                             of $10 additional) in Subaccount A

Contract year two                          --Payment of $900 (plus crediting of
                                             $9 additional) in Subaccount B

Contract year three                        --Payment of $1,500 (plus crediting
                                             of $15 additional) in Subaccount C.

In contract year five the contractholder requests a partial withdrawal of $1,600
from Subaccount C which has grown to $1,900. The amount of the contract fund on
the data of withdrawal is $3,900, $466 more than the total of the purchase
payments made to date plus the additional amounts credited to date. Thus, for
purposes of determining sales charges, the $1,600 withdrawal is considered to
consist of $466 of earnings and $1,134 of purchase payments. The $466 of
earnings and $390 of purchase payments (10% of the contract fund) may be
withdrawn without sales charge. A sales charge is required on the remaining $744
of purchase payment being withdrawn.

To determine the sales charge we assume that $1,000 of purchase payment being
withdrawn is the payment made to Subaccount A in contract year one. The
remaining $134 of purchase payment being withdrawn is assumed to be a part of
the $900 payment made to Subaccount B in contract year two.

Of the first $1,000 purchase payment we have seen that $390 (10% of $3,900) may
be withdrawn without sales charge. A 4% sales charge is due on the withdrawal of
the other $610 of the payment (4% x $610 = $24.40). The $134 portion being
withdrawn from the second payment requires a 5% sales charge (5% x $134 =
$6.70). Thus the total sales charge for withdrawing $1,600 in year five is
$31.10.

In addition, since $1,134 of purchase payments is being withdrawn and the
durations from the start of the contract years of these purchase payments to the
contract year of withdrawal is less than eight years, we will recapture
additional amounts equal to $11.34 (1% of $1,134).

Annual Maintenance Charge.--On each contract anniversary before the Annuity Date
or at the time of total withdrawal we will deduct a maintenance charge from your
contract fund. The maximum amount we will deduct is shown on page 3 of this
contract. If on any contract anniversary the contract fund is allocated to more
than one subaccount and/or to the fixed account, we will divide the charge on a
pro-rata basis, according to the value of each subaccount and/or the fixed
account.

Conditions for Withdrawal or Surrender.--Our consent is needed for a withdrawal
if (1) its amount is less than $300; (2) it would reduce the contract fund to
less than $300; or (3) a withdrawal was made earlier in the same contract year.

To make a withdrawal or to surrender this contract for its cash value, you must
ask us in writing in a form that meets our needs. Also, to surrender the
contract, you must send it to us. Unless we consent, any amount withdrawn will
be taken from the subaccounts and/or the fixed account in proportion to the
amount in each as of the date of the withdrawal. After deducting the Annual
Maintenance Charge and the sales charges, and recaptures of Additional Amounts,
if any, we will pay the balance.

We reserve the right to postpone paying any cash value or withdrawal from the
fixed account for up to six months. If we do so for more than 10 days, we will
pay interest at the rate of at least 3% a year.

Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.

Excess Interest.--Excess interest on that portion of the contract fund in the
fixed account may be credited in addition to the 3% guaranteed interest rate.
The rate of any excess interest is not guaranteed. It will be determined from
time to time and will continue thereafter until a new rate is determined. We may
use different rates of excess interest for different portions of the contract
fund that are in the fixed account.

Page 12 (VIP-86) Y



              CONTRACT FUND AND CONTRACT VALUE OPTIONS (Continued)

allocated to a different subaccount (and/or the fixed account) than that from
which withdrawal is being made or if the amount being withdrawn is no longer
subject to a withdrawal charge. Depending on the amount of the withdrawal, one
or more sales charge rates may be used if the withdrawal is of purchase payments
made in more than one contract year.

Recapture of Additional Amount.--When you make a withdrawal which consists
partially or fully of purchase payments, we may recapture additional amounts
(see page 8) which we credited to your contract fund. If the duration from the
start of the contract year of purchase payment to the start of the contract year
of withdrawal is less than eight years, we will recapture the exact amount of
any additional amounts credited as a result of such purchase payments. If the
duration from the start of the contract year of purchase payment to the start of
the contract year of withdrawal is eight years or more, we will not recapture
any additional amounts credited as a result of such purchase payments.

Example.--
Year                                  Transaction
- ----                                  -----------
Contract year one                   --Payment of $1,000 (plus crediting of $10
                                      additional) in Subaccount A

Contract year two                   --Payment of $900 (plus crediting of $9 
                                      additional) in Subaccount B

Contract year three                 --Payment of $1,500 (plus crediting of $15
                                      additional) in Subaccount C.

In contract year five the contractholder requests a partial withdrawal of $1,600
from Subaccount C which has grown to $1,900. The amount of the contract fund on
the date of withdrawal is $3,900, $466 more than the total of the purchase
payments made to date plus the additional amounts credited to date. Thus, for
purposes of determining sales charges, the $1,600 withdrawal is considered to
consist of $466 of earnings and $1,134 of purchase payments. The $466 of
earnings and $390 of purchase payments (10% of the contract fund) may be
withdrawn without sales charge. A sales charge is required on the remaining $744
of purchase payment being withdrawn.

To determine the sales charge we assume that $1,000 of purchase payment being
withdrawn is the payment made to Subaccount A in contract year one. The
remaining $134 of purchase payment being withdrawn is assumed to be a part of
the $900 payment made to Subaccount B in contract year two.

Of the first $1,000 purchase payment we have seen that $390 (10% of $3.900) may
be withdrawn without sales charge. A 4% sales charge is due on the withdrawal of
the other $610 of the payment (4% x $610 = $24.40). The $134 portion being
withdrawn from the second payment requires a 5% sales charge (5% x $134 =
$6.70). Thus the total sales charge for withdrawing $1,600 in year five is
$31.10.

In addition, since $1,134 of purchase payments is being withdrawn and the
durations from the start of the contract years of these purchase payments to the
contract year of withdrawal is less than eight years, we will recapture
additional amounts equal to $11.34 (1% of $1,134).

Annual Maintenance Charge.--On each contract anniversary before the Annuity Date
or at the time of total withdrawal we will deduct a maintenance charge from your
contract fund. The maximum amount we will deduct is shown on page 3 of this
contract. If on any contract anniversary the contract fund is allocated to more
than one subaccount and/or to the fixed account, we will divide the charge on a
pro-rata basis, according to the value of each subaccount and/or the fixed
account.

Conditions for Withdrawal or Surrender.--Our consent is needed for a withdrawal
if (1) its amount is less than $300; (2) it would reduce the contract fund to
less than $300; or (3) a withdrawal was made earlier in the same contract year.

To make a withdrawal or to surrender this contract for its cash value, you must
ask us in writing in a form that meets our needs. Also, to surrender the
contract, you must send it to us. Unless we consent, any amount withdrawn will
be taken from the subaccounts and/or the fixed account in proportion to the
amount in each as of the date of the withdrawal. After deducting the Annual
Maintenance Charge and the sales charges, and recaptures of Additional Amounts,
if any, we will pay the balance.

Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.

Excess Interest.--Excess interest on that portion of the contract fund in
the fixed account may be credited in addition to the 3% guaranteed interest
rate. The rate of any excess interest is not guaranteed. It will be
determined from time to time and will continue thereafter until a new rate
is determined. We may use different rates of excess interest for different
portions of the contract fund that are in the fixed account.

Page 12 (VIP-86) (WI)
                                    


                         PAYOUT PROVISIONS (Continued)

For the Interest Payment Option, residue on any date means any unpaid balance
with interest to that date.

Withdrawal of Residue--Unless otherwise stated when the option is chosen: (1)
under the Life Income Option and the Supplemental Life Annuity Option the
residue may be withdrawn; and (2) under the Interest Payment Option all, or any
part not less than $100, of the residue may be withdrawn. If the Interest
Payment Option residue is reduced to less than $1,000, we have the right to pay
it in one sum. Under the Life Income Option and the Supplemental Life Annuity
Option, withdrawal of the residue will not affect any payments that may become
due after the certain period; the value of those payments cannot be withdrawn.
Instead, the payments will start again if they were based on the life of a
person who lives past the certain period.

Recapture of Additional Amounts.--Before we make payments under any of the above
options, we will reduce the contract fund by the recapture of additional amounts
in the same way as we would if you had surrendered the contract for its cash
value (see page 12).

Withdrawal Charges--Before we make payments, under either the Life Income Option
or the Interest Payment Option, we will also reduce the contract fund by a
withdrawal charge in the same way as we would if you had surrendered the
contract for its cash value (see page 11).

                                  ENDORSEMENTS
                      (Only we can endorse this contract )

                              BASIS OF COMPUTATION

Minimum Legal Values.--The cash values and annuity benefit values in this
contract are at least as large as those set by law where it is delivered. Where
required, we have given the insurance regulator a detailed statement of how we
compute values and benefits.

                                   The Prudential Insurance Company of America,

                                   By    /s/Isabella L. Kirchner
                                                    Secretary
- ---------------
PLI 173-85 (WI)
- ---------------


Page 14 (VIP-86) (WI)                 C-61



                                PAYOUT PROVISIONS

Choosing an Option.--You may have the amount of your contract fund on the
Annuity Date paid to the Annuitant(s) under one of the options we describe
below. If two Annuitants are named in the contract, and both are living, you may
choose to have payments made to either. But, for any annuity settlement, we will
first deduct from your contract fund any charge for state and/or local premium
taxes, any recapture of additional amounts, and any withdrawal charges. We offer
the same annuity options to the Payee that we offer to an annuitant. And we
determine monthly payments for the Payee in the same way we do for an annuitant.

Conditions.--With respect to the option(s) you select, our right to make the
choice is subject to all these conditions: (1) You must ask for the option in
writing and a form which meets our needs. (2) You must send the contract to us
to be endorsed. (3) If we require it, you must give us proof of the date of
birth of the person on whose age an annuity payment is based. (4) We must have
your request, the contract and any required proof(s) of the date(s) of birth
before the Annuity Date.

Your choice of an option will take effect on the Annuity Date but only if: (1)
the person on whose life the annuity is to be based is living on that date; (2)
the first payment under the option will be at least $50; and (3) you do not void
the choice by making a later choice before the Annuity Date.

If two annuitants are named in the Contract and both are living, settlement will
be made on the life of the First Annuitant, as named on page 3.

When No Option Chosen.--If no choice takes effect on the Annuity Date,
settlement under the Interest Payment Option will become effective.

Options Described.--When we use the word annuitant in the following paragraphs
we mean the annuitant for whom the annuity described was chosen and who is to
receive settlement under the annuity

For an annuitant, the first payment under these options is due on the Annuity
Date.

For a Payee, unless a later date is requested, the first payment will be due on
the first day of the earliest ca1endar month on or after the day the Service
Office has received the request for the settlement and due proof of the
annuitant's death and such claim forms and other evidence as may be satisfactory
to us.

Here are the options we offer. We may also consent to other arrangements.

Life Income Option.--You may choose monthly payments for as long as the
annuitant lives, with 120 monthly payments certain.

Interest Payment Option.--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.

Supplemental Life Annuity Option.--You may choose to receive the proceeds of
this contract in the form of payments like those of any annuity or life annuity
we then regularly issue that (1) is based on United States Currency; (2) is
bought by a single sum; (3) does not provide for dividends; and (4) does not
normally provide for deferral of the first payment. For purposes of this option
only, the words we, our and us include our subsidiary company, Pruco Life
Insurance Company, which has agreed to make settlements under this option.

The proceeds of this contract might be subject to a withdrawal charge if paid as
a lump sum. If so, we will apply that charge pro-rata to any portion of the
proceeds not placed under this option. For the amount placed under this option
on any date, any annuity payment will be at least 100% of what we would pay
under the chosen kind of annuity with its first payment due on its contract
date. The phrase regularly issue does not include contracts that are used to
qualify for special federal income tax treatment as a retirement plan unless
this contract has been issued as part of such a plan. At least one of the
persons on whose life this option is based must be a Payee. This option cannot
be chosen more than 30 days before the due date of the first payment. On
request, we will quote the payment that would apply for any amount placed under
the option at that time.

Residue Described.--For the Life Income Option and the Supplemental Life Annuity
Option, residue on any date means the then present value of any unpaid payments
certain. It does not include the value of any payment that may become due after
the certain period. For the Life Income Option, we will compute it at an
effective interest rate of 3 1/2% a year. But we will use the interest rate we
used to compute the actual Life Income Option payments if they were not based on
the table in this contract. For the Supplemental Life Annuity Option, we will
use the interest rate we would use for the chosen kind of annuity with the same
provisions as to withdrawal.

Page 13 (VIP-86) (WI)                 




Page 18                                                                

Variable Annuity Contract with Flexible Purchase Payments--Monthly annuity
payments starting on Annuity Date Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.




Page 18                                                                  


Variable Annuity Contract with Flexible Purchase Payments-Monthly annuity
payments starting on Annuity Date. Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.




[LOGO] Prudential                    The Prudential Insurance Company of America
                                     Corporate Office  
                                     Newark, New Jersey
                                         

Annuitant(s)                                                     Contract Number

Annuity Date                                                     Contract Date

      Agency









We will make monthly annuity payments starting on the Annuity Date we show in
the window of this page. We make this promise subject to all the provisions of
this contract.

Please read this contract with care. A guide to its contents is on the last page
before the back cover. A summary is on page 5. If there is ever a question about
it, or if there is a claim, just see one of our representatives or get in touch
with one of our offices.

Benefits and values under this contract may be on a variable basis. Amounts
directed into one or more of the variable subaccounts will reflect the
investment experience of those subaccounts. They are subject to change both up
and down and are not guaranteed as to dollar amount except as provided under the
Death of Annuitant and Payout Provisions sections.

Right to Cancel Contract.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the agent who sold it to you. We will cancel the contract and
promptly give you its contract fund, less any portion of the contract fund that
resulted from additional amounts we have added (see page 8) determined as of the
date your request is received.

The provisions on this and the following pages of this contract comprise the
entire contract. The contract was signed for Prudential on the contract date,
which is the date of issue.


Signed for Prudential.


  /s/ [ILLEGIBLE]                                     /s/ [ILLEGIBLE] 
      [SPECIMEN]                                          [SPECIMEN] 
        Secretary                                            President 


Variable  Annuity  Contract with  Flexible  Purchase  Payments--Monthly  annuity
payments  starting on Annuity Date.  Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash value reflect investment results.

VIP-86 - P



                                  CONTRACT DATA
     
ANNUITANT(S)      JOHN DOE             XX XXX XXX                CONTRACT NUMBER
                  MARY DOE
ANNUITY DATE      JULY 25, 2016     JULY 25, 1986                CONTRACT DATE
            
      AGENCY      R-NK 1

                  FIRST ANNUITANT:
                        NAME               JOHN DOE
                        SEX AND ISSUE AGE  M-35
                        DATE OF BIRTH      6/10/51
                   
                  CO-ANNUITANT:
                        NAME               MARY DOE
                        SEX AND ISSUE AGE  F-32
                        DATE OF BIRTH      10/1/54

                  BENEFICIARY:          CLASS 1-ROBERT DOE
                                                SON OF ANNUITANTS
                                        CLASS 2-BARBARA SMITH
                                                SISTER OF CO-ANNUITANT

                           LIST OF CONTRACT MINIMUMS

                    THE MINIMUM INITIAL PURCHASE PAYMENT IS $1,000.
                    THE MINIMUM SUBSEQUENT PURCHASE PAYMENT IS $500.


                           ALLOCATION OF INITIAL PURCHASE PAYMENT
                   
                           BOND                                  20%
                           MONEY MARKET                          20%
                           COMMON STOCK                          20%
                           AGGRESSIVELY MANAGED FLEXIBLE         10%
                           CONSERVATIVELY MANAGED FLEXIBLE       10%
                           FIXED ACCOUNT                         20%


THE MAINTENANCE CHARGE IS UP TO $30.00 ANNUALLY. WE EXPLAIN THIS ON PAGE 12.

SERVICE  OFFICE - PLEASE  DIRECT ANY  COMMUNICATION  ABOUT THIS CONTRACT TO: THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, P.O. BOX 2925, PHOENIX, ARIZONA 85062.


Page 3(VIP-86)(MA)



                         GENERAL PROVISIONS (Continued)

Misstatement of Age or Sex.--If any annuitant's stated date of birth or sex or
both are not correct, we will change each benefit and the amount of each annuity
payment to that which the purchase payment would have bought for the correct
date of birth and sex. Also, we will adjust the amount of any payments we have
already made. Here is how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then or later. (2) We will
add any underpayments, with interest at 5% a year, to the next payment we make
after we receive proof of the correct date of birth and sex.

Incontestability.--We will not contest this contract except for non-payment of
the purchase payment due on the contract date.

Proof of Survival or Death.--Before we make a payment, we have the right to
require proof of the life or death of any person whose life or death determines
whether or to whom we must make the payment.

Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. If any annuitant is living on the Annuity
Date and an assignment is in effect on that date, we have the right to pay the
cash value in one sum. This contract may not be assigned to another insurance
company without our consent.

Changes by Prudential.--We reserve the right, upon 90 days notice to you to:

(1) change the minimum amount requirements specified for purchases, withdrawals
and transfers in the Contract Fund and Contract Value Options Provision;

(2) refuse to accept any request for purchase;

(3) add, change or discontinue subaccounts, change to or add a different
variable contract account, or substitute fund shares in the account (see page
9);

(4} make any changes required by law.

Voting Rights:

Fund.--We will send you a notice of any meeting at which Fund shares which
comprise the assets of a subaccount may be voted. We will provide a voting
instruction form for the number of Fund shares representing your proportional
interest. The instruction form may be signed and returned to us. If for any
meeting there are fund shares for which we have not received voting
instructions, this is what we will do. We will vote Fund shares on each matter
in the same proportion as we vote the Fund shares held in the subaccount for
which we did receive instructions.

Prudential.--We are a mutual life insurance company. Our principal office is in
Newark, New Jersey, and we are incorporated in that State. By law, we have 24
directors. This includes 16 elected by our policyholders (four each year for
four year terms), two of our officers, and six public directors named by New
Jersey's Chief Justice.

The election is held on the first Tuesday in April from 10:00 a.m. to 2:00 p.m.
in our office at the Secretary's address shown here. After this contract has
been in force for one year, you may vote either in person or by mail. We will
send you a ballot if you ask for one. Just write to our Secretary at Prudential
P1aza, Newark, New Jersey 07101, at least 60 days before the election date. By
law, your request must show your name, address, contract number and date of
birth. If you are an individual you must be at least 18 years old to vote.

Participation (Dividends).--This contract is eligible to participate in the
divisible surplus of Prudential. We do not expect that any dividends will be
payable on or before the Annuity Date. While any annuity settlement is in
effect, the contract will share in our surplus to the extent and in the way we
decide.


Page 7 (VIP-86) (PA)



                                PAYOUT PROVISIONS

Choosing an Option.--You may have the amount of your contract fund on the
Annuity Date paid to the Annuitant(s) under one of the options we describe
below. If two Annuitants are named in the contract, and both are living, you may
choose to have payments made to either. But, for any annuity settlement, we will
first deduct from your contract fund any charge for state and/or local premium
taxes, any recapture of additional amounts, and any withdrawal charges. We offer
the same annuity options to the Payee that we offer to an annuitant. And we
determine monthly payments for the Payee in the same way we do for an annuitant.

Conditions.--With respect to the option(s) you select, our right to make the
choice is subject to all these conditions: (1) You must ask for the option in
writing and a form which meets our needs. (2) You must send the contract to us
to be endorsed. (3) If we require it, you must give us proof of the date of
birth of the person on whose age an annuity payment is based. (4) We must have
your request, the contract and any required proof(s) of the date(s) of birth
before the Annuity Date.

Your choice of an option will take effect on the Annuity Date but only if: (1)
the person on whose life the annuity is to be based is living on that date; (2)
the first payment under the option will be at least $20; and (3) you do not void
the choice by making a later choice before the Annuity Date.

If two annuitants are named in the Contract and both are living, settlement will
be made on the life of the First Annuitant, as named on page 3.

When No Option Chosen.--If no choice takes effect on the Annuity Date,
settlement under the Interest Payment Option will become effective.

Options Described.--When we use the word annuitant in the following paragraphs
we mean the annuitant for whom the annuity described was chosen and who is to
receive settlement under the annuity.

For an annuitant, the first payment under these options is due on the Annuity
Date.

For a Payee, unless a later date is requested, the first payment will be due on
the first day of the earliest ca1endar month on or after the day the Service
Office has received the request for the settlement and due proof of the
annuitant's death and such claim forms and other evidence as may be satisfactory
to us.

Here are the options we offer. We may also consent to other arrangements.

Life Income Option.-You may choose monthly payments for as long as the annuitant
lives, with 120 monthly payments certain.

Interest Payment Option.--We will hold an amount at interest. We will pay
interest at an effective rate of at least 3% a year ($30.00 annually, $14.89
semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more
interest.

Supplemental Life Annuity Option.--You may choose to receive the proceeds of
this contract in the form of payments like those of any annuity or life annuity
we then regularly issue that (1) is based on United States Currency; (2) is
bought by a single sum; (3) does not provide for dividends; and (4) does not
normally provide for deferral of the first payment. For purposes of this option
only, the words we, our and us include our subsidiary company, Pruco Life
Insurance Company, which has agreed to make settlements under this option.

The proceeds of this contract might be subject to a withdrawal charge if paid as
a lump sum. If so, we will apply that charge pro-rata to any portion of the
proceeds not placed under this option. For the amount placed under this option
on any date, any annuity payment will be at least 100% of what we would pay
under the chosen kind of annuity with its first payment due on its contract
date. The phrase regularly issue does not include contracts that are used to
qualify for special federal income tax treatment as a retirement plan unless
this contract has been issued as part of such a plan. At least one of the
persons on whose life this option is based must be a Payee. This option cannot
be chosen more than 30 days before the due date of the first payment. On
request, we will quote the payment that would apply for any amount placed under
the option at that time.

Residue Described.--For the Life Income Option and the Supplemental Life Annuity
Option, residue on any date means the then present value of any unpaid payments
certain. It does not include the value of any payment that may become due after
the certain period. For the Life Income Option, we will compute it at an
effective interest rate of 3 1/2% a year. But we will use the interest rate we
used to compute the actual Life Income Option payments if they were not based on
the table in this contract. For the Supplemental Life Annuity Option, we will
use the interest rate we would use for the chosen kind of annuity with the same
provisions as to withdrawal.




Page 17 (VIP-86) - P



























                                                                         
Page 18


Variable  Annuity  Contract with  Flexible  Purchase  Payments--Monthly  annuity
payments  starting on Annuity Date.  Payment as stated upon death before Annuity
Date. Purchase payments payable during lifetime(s) of annuitant(s) until Annuity
Date. Cash values reflect investment results.


VIP-86 - P                                                     





Prudential          The Prudential
                    Insurance Company
                    of America

Insured                       Rider for Policy No.

     John Doe                           XX XXX XXX
- --------------------------------------------------------------------------------

    This Contract is amended to include the following additional provisions.

                                 FIXED ACCOUNT

The Fixed Account.--If you choose, you may allocate all or part of your purchase
payment to the fixed account. The fixed account is funded by the general account
of Prudential and is credited with interest as described under Guaranteed
Interest and Excess Interest below. Amounts in the fixed account will not be
part of your variable account.

Fixed Account Options.--We may have more than one fixed account option.

Guaranteed Interest.--We will credit interest to the amount in the fixed account
at a rate of .00809863% a day, which is equivalent to an effective rate of 3% a
year.

Excess Interest.--We may credit interest in addition to the guaranteed interest
on the amount in the fixed account. The rate of any excess interest will be
determined from time to time and will continue thereafter until a new rate is
determined. We may use different rates of excess interest for different portions
of the amount in the fixed account. We may from time to time guarantee rates of
excess interest on some portions of the amount in the fixed account.

Effect on Withdrawals.--We have the right to defer for up to six months paying
the portion of the proceeds arising from a withdrawal from this contract that is
to come from the fixed account. If we do so for more than 30 days we will pay
interest at the rate of 3% a year.

                                   TRANSFERS

Transfers Among Subaccounts and into the Fixed Account.--You may transfer
amounts among the subaccounts of the Prudential Individual Variable Contract
Account and into the fixed account as often as four times in a contract year.

To make a transfer, you must notify us in writing in a form that meets our need.
The transfer will take effect on the date we receive your notice at our Service
Office.

If we establish new separate accounts, transfers into or out of these separate
accounts will be allowed only with our consent.

Transfers Among Fixed Account Options and into the Subaccounts.--You may
transfer amounts among the available Fixed Account Options and into the
subaccounts only with our consent.

                          ADDITIONAL SEPARATE ACCOUNTS

We may establish additional separate accounts to support variable life insurance
and annuity contracts. Any additional separate accounts may have several
subaccounts. We list any subaccounts in the Contract Data pages.

Any additional separate account will:

1.   be registered with the SEC if required;

2.   have assets that are kept separate from the assets of our general account;
     and

3.   have assets which, together with the assets of any other separate accounts,
     will have a total value at least equal to the amount of the variable
     account under contracts like this one.

Transfer into or out of any additional separate account will be allowed only
with our consent.

We have the right to defer paying the portion of the proceeds arising from a
cash surrender of this contract that is to come from any additional separate
accounts registered under the Investment Company Act of 1940; if (1) the New
York Stock Exchange is closed; or (2) the SEC requires that trading be
restricted or declares an emergency. We have the right to postpone for up to six
months paying you the
                            (Continued on Next Page)


- ----------
VIP 501-86
- ----------
                                      C-38

<PAGE>

portion of the proceeds arising from a cash surrender of this contract that is
to come from any other additional separate account. If we do so for more than 30
days we will pay interest at the rate of 3% a year.

We have the right to defer making the portion of any loan that is to come from
any additional separate account registered under the Investment Company Act of
1940; if (1) the New York Stock Exchange is closed; or (2) the SEC requires that
trading be restricted or declares an emergency. We have the right to defer for
up to six months making the portion of any loan that is to come from any other
additional separate account, unless it will be used to pay premiums on this or
other contracts with us.

                                    CHARGES

[ILLEGIBLE] charges specified in this contract are the maximum charges we make.
We may make lesser charges. Any such lesser charges will apply to all contracts
like this one issued at the same age and sex as this one and in force for the
same length of time as this one.

                               ADDITIONAL AMOUNTS

Beginning no later than July 1, 1987 and continuing until June 30, 1990, and
thereafter at our discretion, we will credit an additional 1% to the amount of
every purchase payment you make.

We reserve the right to limit such additional amounts to $1,000 in each contract
year.

Each additional amounts will not be subject to any deductions for state or local
premium taxes. They will be allocated to the subaccounts or to the fixed account
in the same proportions as the corresponding purchase payment.

Example: On May 1, 1987 you make a $1,000 purchase to be allocated equally to
subaccounts A and B. We will [ILLEGIBLE] that amount by 1%, or $10, and allocate
$505 to each of subaccounts A and B. Later in the year you send us a $600
purchase payment, but you don't tell us how it is to be applied. We will
increase that amount by 1% or $6 and, based on the most recent purchase, we
would make a $303 purchase for each of subaccounts A and B.

These additional amounts will become part of your Variable Account.

We may recapture additional amounts in the following situations:

1.   If you return the contract to us under the Right to Cancel provision.

2. If you (a) make a withdrawal which consists partially or fully of purchase
payments; (b) surrender the contract for its cash value; or (c) select a Payout
Provision, and if the duration from the start of the contract year of purchase
payment to the start of the contract year of withdrawal, surrender or payout is
less than eight years.

If the duration from the start of the contract year of purchase payment to the
start of the contract year of withdrawal, surrender or payout is eight years or
more, we will not recapture any additional amounts credited as a result of such
purchase payments.

If the duration from the start of the contract year of purchase payment to the
start of the contract year of withdrawal, surrender or payout is eight years or
more, we will not recapture any additional amounts credited as a result of such
purchase payments.


                              Rider attached to and made a part of this contract
                              
                              The Prudential Insurance Company of America,

                              By /s/ Isabella L. Kirchner
                                                    Secretary

                              Date September 8, 1986 Attest M. Smith
                              --------------------------------------------------

- ----------
VIP 501-86
- ----------
                                      C-39

<PAGE>
                                     4(GGG)
                                  ENDORSEMENT
                      (Only we can endorse this contact.)

This endorsement is attached to and made a part of the contract on the contract
date:

Any reference, in any provision of this contract, to the sex of any person will
be ignored except for the purpose of identification. For any participating
settlement payable for the lifetime of one or more payees, the female rates we
show in the contract will apply to both male and female payees.

                                     The Prudential Insurance Company of America
                                     By /s/ Isabella L. Kirchner
                                                            Secretary


- -------------
COMB 84890-83
- -------------

                                      C-40



                                  ENDORSEMENTS
                      (Only we can endorse this contract.)
                                      
Right to Buy a New Contract.--Some provisions of this form refer to the right of
an  individual,  subject  to certain  conditions,  to obtain a new  contract of
insurance  from  Pruco  Life  Insurance  Company.  Pruco Life has agreed to this
arrangement, as shown by the following Certification.



                                  CERTIFICATION

Pruco Life Insurance  Company is aware that some  provisions of this  Prudential
Insurance  Company of America form provide an  individual  the right, subject to
certain conditions, to obtain a new contract of insurance from Pruco. We certify
that if any such  individual  wishes to  exercise  that  right  Pruco  will make
available to that individual the contract described in this form.



                                        Signed for Pruco Life Insurance Company,

                                            
                                                      /s/ [SPECIMEN]
                                                         President


                                                      /s/ [SPECIMEN]
                                                         Vice President



If Pruco Life Insurance Company is not engaged in the insurance  business at the
time an  individual  wishes to exercise  this right to buy a new  contract,  The
Prudential  will make available to that  individual a contract that it currently
issues.


                  This endorsement attached to the contract on the Contract Date

                                        By

                                                      /s/ [SPECIMEN]
                                                         Secretary




- ----------
PLI 254-86
- ----------



The Prudential [LOGO]                                                 
                        Annuitant                         Contract No.
                        John Doe                          XX XXX XXX
                        --------------------------------  ---------------------
                         

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

                        WAIVER OF WITHDRAWAL CHARGES

Subject to all the provisions of this rider and of the rest of the contract,  we
will waive part or all of (1) any withdrawal and maintenance  charges  otherwise
associated  with a full  or  partial  withdrawal,  or (2) any  annuitization  or
withdrawal  charge due on the annuity  date,  if an annuitant is (a)  terminally
ill, or (b) confined to an eligible  nursing home or hospital  continuously  for
three months while this  contract is in force.  This waiver  applies only to any
purchase  payment(s)  made  one  year  or more  prior  to  your  request(s)  for
withdrawal, or the annuity date.

Terminal Illness Option

You may use  this  option  if you give us  evidence  that  satisfies  us that an
Annuitant's life expectancy is six months or less. Part of that evidence must be
a certification by a licensed physician.

Nursing Home/Hospital Option

You may use this option if an Annuitant is confined to an eligible  nursing home
and/or hospital starting any time after the contract date, and has been confined
there continuously for at least three months.

Eligible Nursing Home

An eligible nursing home is an institution or special nursing unit of a hospital
which meets at least one of the following requirements:

1.   it is Medicare approved as a provider of skilled nursing care services; or

2.   it is  licensed  as a  skilled  nursing  home  or as an  intermediate  care
     facility by the state in which it is located; or

3.   it meets all of the requirements listed below:

     (a)  it is licensed as a nursing home by the state in which it is located;

     (b)  its main function is to provide  skilled,  intermediate,  or custodial
          nursing care:

     (c)  it is engaged in providing continuous room and board accommodations to
          3 or more persons;
               
     (d)  it is under the  supervision  of a  registered  nurse (RN) or licensed
          practical nurse (LPN);

     (e)  it maintains a daily medical record of each patient: and

     (f)  it maintains control and records for all medications dispensed.

Institutions  which primarily  provide  residential  facilities are not eligible
nursing homes.

Eligible Hospital  

An eligible hospital is an institution that meets either of these requirements:

1.   It is accredited as a hospital under the Hospital  Accreditation Program of
     the Joint Commission on Accreditation of Healthcare Organizations.

2.   It is  legally  operated,  has 24  hour a day  supervision  by a  staff  of
     doctors,  has 24 hour a day nursing service by registered  graduate nurses,
     and complies with (a) or (b):

- ------------
0RD 88754-92
- ------------

<PAGE>




     (a)  It mainly  provides  general  inpatient  medical care and treatment of
          sick and injured  persons by the use of medical,  diagnostic and major
          surgical  facilities.  All  such  facilities  are in it or  under  its
          control.

     (b)  It mainly provides specialized inpatient medical care and treatment of
          sick  or  injured  persons  by  the  use  of  medical  and  diagnostic
          facilities  (including x-ray and laboratory).  All such facilities are
          in it, under its control, or available to it under a written agreement
          with a hospital (as defined  above) or with a specialized  provider of
          these facilities.

An eligible hospital is not an institution, or part of one, which: (a) furnishes
mainly  homelike or custodial care, or training in the routines of daily living;
or (b) is mainly a school.

Conditions 

Your  right to be paid under one of these  options  is subject to the  following
conditions:

1.   You must choose the option in writing in a form that meets our needs.

2.   The contract must not be assigned.

3.   You  must  give  us any  facts  we  need to  satisfy  us that an  Annuitant
     qualifies for one of the options described above.

                              Rider attached to and made a part of this contract

                                    The Prudential Insurance Company of America,


                                       By         /s/ [SPECIMEN]
                                                     Secretary


                                    Effective Date Nov. 18, 1992 Attest M. Smith

- ------------
0RD 88754-92
- ------------





                          WAIVER OF WITHDRAWAL CHARGES
          
Subject to all the provisions or this rider and of the rest or the contract,  we
will waive part or all of (1) any withdrawal and maintenance  charges  otherwise
associated  with a full  or  partial  withdrawal  or (2)  any  annuitization  or
withdrawal  charge cue on the annuity  date,  if an annuitant is (a)  terminally
ill, or (b) confined to an eligible  nursing home or hospital  continuously  for
three months while this  contract is in force.  This waiver  applies only to any
purchase  payment(s)  made  one  year  or more  prior  to  your  request(s)  for
withdrawal, or the annuity date.

Terminal Illness Option

You may use  this  option  if you give us  evidence  that  satisfies  us that an
Annuitant's life expectancy is six months or less. Part of that evidence must be
a certification by a licensed physician.

Nursing Home/Hospital Option

You may use this option if an Annuitant is confined to an eligible  nursing home
and/or hospital starting any time after the contract date, and has been confined
there continuously for at least three months.
                         
Eligible  Nursing  Home  

An eligible  nursing home is an institution  special  nursing unit of a hospital
which meets at least one of the following requirements:

1.   it is Medicare approved as a provider of skilled nursing care services; or

2.   it is  licensed  as a  skilled  nursing  home  or as an  intermediate  care
     facility by the state in which it is located; or

3.   it meets all of the requirements listed below:

     (a)  it is licensed as a nursing home by the state in which it is located:

     (b)  its main function is to provide  skilled,  intermediate,  or custodial
          nursing care;

     (c)  it is engaged in providing continuous room and board accommodations to
          3 or more persons;

     (d)  it is under the  supervision  of a  registered  nurse (RN) or licensed
          practical nurse (LPN);

     (e)  it maintains a daily medical record of each patient; and

     (f)  it maintains control and records for all medications dispensed.

Institutions  which primarily  provide  residential  facilities are not eligible
nursing homes.

Eligible Hospital

An eligible hospital is an institution that meets either of these requirements:

1.   It is accredited as a hospital under the Hospital  Accreditation Program of
     the Joint Commission on Accreditation of Healthcare Organizations.

2.   It is  legally  operated,  has 24  hour a day  supervision  by a  staff  of
     doctors,  has 24 hour a day nursing service by registered  graduate nurses,
     and complies with (a) or (b):

     (a)  It mainly  provides  general  inpatient  medical care and treatment of
          sick and injured  persons by the use of medical,  diagnostic and major
          surgical  facilities.  All  such  facilities  are in it or  under  its
          control.

     (b)  It mainly provides specialized inpatient medical care and treatment of
          sick  or  injured  persons  by  the  use  of  medical  and  diagnostic
          facilities  (including x-ray and laboratory).  All such facilities are
          in it, under its control, or available to it under a written agreement
          with a hospital (as defined  above) or with a specialized  provider of
          these facilities.

An eligible hospital is not an institution, or part of one, which: (a) furnishes
mainly  homelike or custodial care, or training in the routines of daily living;
or (b) is mainly a school.

- ------------
ORD 88753-92
- ------------

                                      C-23
<PAGE>




Conditions              

Your  right to be paid under one of these  options  is subject to the  following
conditions:

1.   You must choose the option in writing in a form that meets our needs.

2.   The contract must not be assigned.

3.   You  must  give  us any  facts  we  need to  satisfy  us that an  Annuitant
     qualifies for one of the options described above.

Rider attached to and made a part of this contract on the Contract Date

The Prudential Insurance Company of America,



                                   By  [ILLEGIBLE]
                                       ---------------------------
                                       Secretary



- ------------
ORD 88753-92
- ------------


                                      C-24


SPOUSAL CONTINUANCE RIDER

This rider is effective only under the following conditions:

1.   There is only one Annuitant.

2.   The Annuitant is the only owner of the contract.

3.   The Annuitant's spouse is the Only Class 1 (primary) beneficiary.

4.   The Annuitant dies before the Annuity Date.

At the Annuitant's  death,  the contract will continue and,  effective as of the
date of death, the spouse will be the Annuitant and owner.

If the  spouse  requests a full  withdrawal  within 60 days from the date of the
Annuitants death, we will pay the spouse the amount that would have been payable
by reason of the  Annuitant's  death,  calculated  as of the date we receive the
withdrawal request or the date we receive due proof of death, if later.

If the spouse requests a full withdrawal more than 60 days after the date of the
Annuitant's death, the provisions in the contract for withdrawals will apply.

Rider attached to and made a part of this contract on the Contract Date.

The Prudential Insurance Company of America.


By [SPECIMEN]
   Secretary



- -------------
ORD 89011--93
- -------------


                                                  No. Exhibit A (10)
                                                  ------------------------------

                                 APPLICATION FOR
                            VARIABLE ANNUITY CONTRACT
                                       IN
                      PRUDENTIAL'S VARIABLE INVESTMENT PLAN
Please make check payable to Prudential and mail the check and application to:
The Prudential Insurance Company of America, P.O. Box 2925, Phoenix, AZ 85062.
- --------------------------------------------------------------------------------
1a. Proposed Annuitant's name -- first, initial, last (Print)  1b. Date of Birth
    Name -- first, initial, last (Print)                        Mo   Day  Yr. 
     ___________________________________________________         _____________ 

    2.   Sex              3. Social Security No.
     M    F   
    [ ]  [ ]               ___________________
                       
4.  Proposed Annuitant's home address 

    No. ________ Street _____________City __________ State ______ Zip _________

- --------------------------------------------------------------------------------
5a.  Name of Employer                     5b. Employer Soc Sec #   
                                              or Tax ID #
    ______________________________            _____________________________
5c. Name of any Trustee or Administrator 
    (if different from Employer)
- --------------------------------------------------------------------------------
5d. Address for Communications and Billing:
    If mail is to be sent to [ ] Employer   
                             [ ] Trustee or Administrator, please furnish:
    No. ________ Street _____________City __________ State ______ Zip _________
- --------------------------------------------------------------------------------
6.  Under what type of Qualified Plan or Program is the contract being applied
    for? (CHECK ONE) Type: 
    [ ] IRA--Individual Retirement Annuity  

    [ ] IRA--SEPP (Plan Name) ____________________________________________
        __________________________________________________________________

    [ ] HR-10/Keogh -- Self Employed Plan (name)*_________________________
        __________________________________________________________________
    [ ] Corporate Plan (name)* ___________________________________________
        __________________________________________________________________
    [ ] Tax Deferred Annuity (Public School) 
    [ ] Tax Deferred Annuity (Non-Profit Organization) 
    
    [ ] __________________________________________________________________
     *Please attach appropriate adoption agreement or Determination Letter where
     applicable.
- --------------------------------------------------------------------------------
7.  AMOUNT PAID WITH APPLICATION? $_____________________________________
                                  [ ] None
    Is this amount a rollover from a qualified plan?  [ ] Yes [ ] No
- --------------------------------------------------------------------------------
6.  INVESTMENT SELECTION- Select one or more subaccount(s): 

    Employee or Individual Allocation                %
    ---------------------------------

    [ ] Bond                                     _________%

    [ ] Money Market                             _________%

    [ ] Common Stock                             _________%

    [ ] Aggressively Managed Flexible            _________%

    [ ] Conservatively Managed Flexible          _________%

    [ ] Other                                    _________%

           TOTAL INVESTED                          100%
                                                 =========
    Any future purchases will be allocated in the same percentage(s) as above
    unless specific instructions to change the allocations are submitted.
- --------------------------------------------------------------------------------
9.  PAYMENT SCHEDULE (not applicable to individual IRAs)
    [ ] Single Purchase Payment
    [ ] Periodic Purchase Payment Amount $_______________
    To be paid [ ] Annually       [ ] Semi-Annually
               [ ] Quarterly      [ ] Monthly

    Beginning ______________________   __________________
                    Month                     Day
- --------------------------------------------------------------------------------
10. ANNUITY COMMENCEMENT DATE

    Annuity payments to begin
    on the first day of                        ___________   ________
                                                  (Month)      (Year)
- --------------------------------------------------------------------------------
11. BENEFICIARY DESIGNATION

    Primary __________________________________________________________

    Relationship to                                Date of
    Annuitant _____________________________________Birth _____________

    Contingent _______________________________________________________

    Relationship to                                Date of
    Annuitant _____________________________________Birth _____________

- --------------------------------------------------------------------------------
12. Will the annuity applied for replace any existing annuity or 
    life insurance? 

    [ ] Yes [ ] No  If yes, please furnish details:

- --------------------------------------------------------------------------------
13. REMARKS OR SPECIAL REQUESTS


   Prudential
   ----------
                    APPLICATION FOR VARIABLE ANNUITY CONTRACT
                                       IN
                      PRUDENTIAL'S VARIABLE INVESTMENT PLAN
Please make check payable to Prudential and mail the check and application to:
The Prudential Insurance Company of America, P.O. Box 2925, Phoenix, AZ 85062.

- --------------------------------------------------------------------------------
1a. Designated Annuitant's name (Please Print)    1b. Date of Birth        Age 
                                                  Mo.    Day     Yr.           
- ----------------------------------------------    _____  ___    ____       ___
 2.  Sex            3.  Social Security                                       
 M    F                                    
[ ]  [ ]                ________  _____  _______
- --------------------------------------------------------------------------------
4.  Designated Annuitant's home address

    No. _____ Street ________________City ____________ State ______ Zip ________
- --------------------------------------------------------------------------------
5a. Name of Employer                         5b. Employer Soc Sec #
    (Not applicable to individual IRAs)          or Tax ID #       

                                             
5c. Name of any Trustee or Administrator
    (if different from Employer)
 
- --------------------------------------------------------------------------------
5d. Address for Communications and Billing:
    If mail is to be sent to [ ] Employer  [ ] Trustee or Administrator, please
    furnish:

    No. ______ Street ________________City ____________ State ______ Zip _______
- --------------------------------------------------------------------------------
6.  Under what type of Qualified Plan or Program is the contract 
    being applied for? (CHECK ONE)
   
    [ ] IRA--Individual Retirement Annuity

    [ ] IRA--SEPP (Plan Name)___________________________________________________

        ________________________________________________________________________

    [ ] HR-10/Keogh--Self Employed Plan (name)*_________________________________

        ________________________________________________________________________

    [ ] Corporate plan (name)* _________________________________________________

        ________________________________________________________________________

    [ ] Tax Deferred Annuity (Public School)
    [ ] Tax Deferred Annuity (Non-Profit Organization)

     * Please attach appropriate adoption agreement or Determination Letter
       where applicable.

- --------------------------------------------------------------------------------
7.  AMOUNT PAID WITH APPLICATION _______________________________       [ ] None
    For IRA Only:  Is this amount a rollover from a qualified 
      plan? [ ] Yes [ ] No (if yes, attach Form [ILLEGIBLE]  81953A)
      Calendar year(s) for which payment is to be  applied ______________
    (if for more than one year is stated, specify amount for each year).
    Use remarks section, if necessary.

- -------------------------------------------------------------------------------
8.  INVESTMENT SELECTION: Select one or more subaccount(s):

             (All % allocations must be expressed in whole numbers)

     [ ] Bond                                     ___________%

     [ ] Money Market                             ___________%

     [ ] Common Stock                             ___________%

     [ ] Aggressively Managed Flexible            ___________%

     [ ] Conservatively Managed Flexible          ___________%
     
     [ ] Other______________                      ___________%

          TOTAL INVESTED                             100%
                                                     ====

     Any future purchases will be allocated in the same percentage(s) as above
     unless specific instructions to change the allocations are submitted.

- --------------------------------------------------------------------------------
9.   BILLING SCHEDULE (not applicable to individual IRAs)

     [ ] Single Purchase Payment
     [ ] Periodic Purchase Payment Amount $ ________________
     To be paid  [ ] Annually      [ ] Semi-Annually
                 [ ] Quarterly     [ ] Monthly

     Beginning _________________     __________________
                     Month                  Day
- --------------------------------------------------------------------------------
10.  ANNUITY COMMENCEMENT DATE

     Annuity payments to begin
     on the first day of                        ___________   ________
                                                  (Month)      (Year)
- --------------------------------------------------------------------------------
11.  BENEFICIARY DESIGNATION 

     Primary ________________________________________________________ 

     Relationship to                                 Date of
     Annuitant  ____________________________________ Birth __________

     Contingent _____________________________________________________

     Relationship to                                 Date of
     Annuitant  ____________________________________ Birth __________

- --------------------------------------------------------------------------------
12.  Will the annuity applied for replace any existing annuity 
     or life insurance? [ ] Yes  [ ] No  If yes, please furnish
     details:
     Name of insured_________________________________________________

     Insurance Company ______________________________________________

     Policy Number(s)________________________________________________
- --------------------------------------------------------------------------------
13.  REMARKS OR SPECIAL REQUESTS




[ ] Check here if Statement of Additional Information desired.
- --------------------------------------------------------------------------------



                                                  No. XX XXX XXX
                                                  ------------------------------

                    APPLICATION FOR AN ANNUITY CONTRACT

                    [ ] PRUDENTIAL'S VARIABLE INVESTMENT PLAN SERIES or
                    [ ] PRUDENTIAL'S FIXED INTEREST PLAN SERIES

Please make check payable to Prudential and mail the check and application to:
The Prudential Insurance Company of America, P.O. Box 2925, Phoenix, AZ 85062.

- --------------------------------------------------------------------------------
1a.  Proposed Annuitant's name (Please Print)

     John Doe

- --------------------------------------------------------------------------------
1b.  Date of Birth                      Age

     Mo        Day       Yr
     7         15        50             35

- --------------------------------------------------------------------------------
2.   Sex

      M         F
     |X|       |_|

- --------------------------------------------------------------------------------
3.   Social Security No.

     XXX/XX/XXX

- --------------------------------------------------------------------------------
4.   Proposed Annuitant's home address

                                                              Name 
                                                               of
     No. 15   Street Blank Street   City Name of City   State State   Zip XXXXX
         --          ------------        ------------         -----       -----

- --------------------------------------------------------------------------------
5a.  Name of Employer         
     (not applicable to individual IRAs)


- --------------------------------------------------------------------------------
5b.  Employer Soc Sec #
     or Tax ID #


- --------------------------------------------------------------------------------
5c.  Name of any Trustee or Administrator
     (if different from Employer)


- --------------------------------------------------------------------------------
5d.  Address for Communications and Billing:

     If mail is to be sent to |_| Employer  |_| Trustee or Administrator,
     please furnish:

     No. __   Street ____________   City ____________   State _____   Zip _____

- --------------------------------------------------------------------------------
6.   Under what type of Qualified Plan or Program is the contract being
     applied for? (CHECK ONE)

     |_| IRA - Individual Retirement Annuity

     |_| IRA - SEPP (Plan Name) ________________________________________________

         _______________________________________________________________________

     |_| HR - 10/Keogh - Self Employed Plan (name)* ____________________________

         _______________________________________________________________________

     |_| Corporate plan (name)* ________________________________________________

         _______________________________________________________________________

     |_| Tax Deferred Annuity (Public School)

     |_| Tax Deferred Annuity (Non-profit Organization)

     * Please attach appropriate adoption agreement or Determination Letter 
     where applicable.

- --------------------------------------------------------------------------------
7.   AMOUNT PAID WITH APPLICATION?      $ XX,XXX.XX         |_| None
                                        -----------

     For IRA Only:  Is this amount a rollover from a qualified plan?
          |_| Yes |_| No (if yes, attach Form Ord 8 1953A)
          Calendar year(s) for which payment is to be adopted

     (If for more than one year is stated, specify amount for each year) Use 
     remarks section, if necessary.

- --------------------------------------------------------------------------------
8.   INVESTMENT SECTION - Complete only if you are applying for a Variable
     Investment Plan
     Select one or more: (All % allocations must be expressed in whole numbers)

     [ ] Bond                                      20%
                                                  ----
     [ ] Money Market                              20%
                                                  ----
     [ ] Common Stock                              20%
                                                  ----
     [ ] Aggressively Managed Flexible             20%
                                                  ----
     [ ] Conservatively Managed Flexible           20%
                                                  ----
     [ ] Fixed Account                               %
                                                  ----
     [ ] Other                                       %
                                                  ----
          TOTAL INVESTED                          100%
                                                  ====

     Any future purchases will be allocated in the same percentage(s) as above
     unless specific instructions to change the allocations are submitted.

- --------------------------------------------------------------------------------
9.   BILLING SCHEDULE (not applicable to individual IRAs

     |_| Single Purchase Payment

     |_| Periodic Purchase Payment Amount $__________

     To be paid     |_| Annually        |_| Semi-annually

                    |_| Quarterly       |_| Monthly


     Beginning _________________________  _________________________
                         Month                      Day

- --------------------------------------------------------------------------------
10.  ANNUITY COMMENCEMENT DATE

     Annuity payments to begin on the first day of ____________ ____________
                                                      Month         Day

- --------------------------------------------------------------------------------
11.  BENEFICIARY DESIGNATION

     Primary (Class 1)  Mary Doe
             -------------------------------------------------------------------

     Relationship to                              Date of
     Annuitant        Wife                        Birth    7/10/55
              ----------------------------------        ------------------------

     Contingent (Class 2)
                ----------------------------------------------------------------

     Relationship to                              Date of
     Annuitant                                    Birth     
              ----------------------------------        ------------------------
     
- --------------------------------------------------------------------------------
12.  Will the annuity applied for replace any existing annuity or life
     insurance? |_| Yes |X| No  If yes, please furnish details:

     Name of Insured ___________________________________________________________

     Insurance Company _________________________________________________________

     Policy Number(s) __________________________________________________________

- --------------------------------------------------------------------------------
13.  REMARKS OR SPECIAL REQUESTS




- --------------------------------------------------------------------------------
VAQ 201 Ed 9/86 - Pension V.A.
<PAGE>


                            Supplementary Information
- --------------------------------------------------------------------------------
NOTE: If unable to obtain an answer to D, E, and F, print "NR" (no response)
      immediately following the question and estimate the answer to the extent
      possible.
- --------------------------------------------------------------------------------
1.   COMPLETE THE FOLLOWING INFORMATION REGARDING THE PURCHASER (To be Completed
     by writing agent or Registered Representative)

     A.   Occupation* __________________________________________________________
                          *If in the securities business, record the name and 
                           address of the employer here:

          ______________________________________________________________________

     B.   Marital Status _______________________________________________________

     C.   Number of Dependents _________________________________________________

     D.   Estimated Family Income ______________________________________________

     E.   Estimated Amount of Family Investments and Savings ___________________

     F.   Amount of Insurance on Purchaser's Life ______________________________

     G.   Source of Investment _________________________________________________

     H.   Do you have, from any source, facts that the proposed Purchaser may
          replace or change any current insurance or annuity in any company?
          [ ]Yes [ ]No  If Yes, please furnish details.

- --------------------------------------------------------------------------------
2.   COMPLETE IN THE CASE OF A SALE TO A PENSION OR PROFIT SHARING PLAN OR SEPP
     IRA
     (To Be Completed By writing agent or Registered Representative)
     The writing agent or Registered Representative recommending the sale of
     this contract is affiliated with Prudential as a

     _____ District Agent               _____ Salaried Employee

     _____ Special Agent                _____ Broker

     _____ Representative under the standard contract, part-time special agent's
           contract, part-time special agent's contract for full-time agents 
           retired under the Company's Plan, or an agent emeritus contract.
     
- --------------------------------------------------------------------------------
3.   ACKNOWLEDGEMENT OF PURCHASER

OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be
as required by the applicable retirement plan. If there is no such plan, the
owner will be (1) the applicant if other than the proposed Annuitant, or else
(2) the proposed Annuitant. In either case, any limitations required by the
retirement plan or program will be part of in the contract.

If this application is for a Variable Investment Plan, I understand that: (1)
payments and values are based on the investment experience of a separate
account; and, (2) they may vary and are not guaranteed as to fixed dollar
amount. I have received the current prospectus for (1) a variable annuity
contract of Prudential's Variable Investment Plan; (2) The Prudential Series
Fund, Inc., and, if applying for an IRA, the IRA disclosure material.

I have read the Section in the prospectus titled "ERISA Disclosure" and conclude
that the representative recommending these contracts and I do not have a
proscribed relationship. Check here if a Statement of Additional Information is
desired. |_|


Application made at:                         Signature of Proposed Annuitant


STATE Name of City and State                              John Doe
      ------------------------------------   -----------------------------------
                                                    Signature of Purchaser
                                             (if other than proposed Annuitant)
DATE Oct. 1, 1986
      ------------------------------------   -----------------------------------
                                             (If applicant is a firm or 
                                             corporation, show that company's
                                             name)

WITNESS: Richard Roe                         BY
         ---------------------------------      --------------------------------
         (Writing Agent or Representative)      (Signature and title of officer
                                                signing for that Company)

- --------------------------------------------------------------------------------
To be Completed by Writing Agent or          To be Completed by Registered
Registered Representative                    Representative
(Pruco Securities)

________________________________________     ___________________________________
NAME AND TITLE -- Please Print               NAME -- Please Print

________________________________________     ___________________________________
CONTRACT NO.       OFFICE CODE      RHO      CONTRACT NO.       OFFICE CODE

_______________________(____)___________     __________________(____)___________
OFFICE                 PHONE NO.             BRANCH OFFICE     PHONE NO.

================================================================================
VAQ 201 Ed 9/86 -- Pension V.A.



                                                  No. Exhibit (5) (d)
                                                  ------------------------------

                    APPLICATION FOR AN ANNUITY CONTRACT

                    [ ] PRUDENTIAL'S VARIABLE INVESTMENT PLAN SERIES or
                    [ ] PRUDENTIAL'S FIXED INTEREST PLAN SERIES

Please make check payable to Prudential and mail the check and application to:
The Prudential Insurance Company of America, P.O. Box 2925, Phoenix, AZ 85062.

- --------------------------------------------------------------------------------
1.   PROPOSED ANNUITANT (Please Print)

     Name ______________________________________________________________________

     Address ______________________ City ____________ State ______ Zip _________

     Date of Birth _____  ___  ____   Age __  Sex [ ] Male  [ ]Female
                   Month  Day  Year

     Soc Sec # ________  _____  ________

- --------------------------------------------------------------------------------
1a.   PROPOSED CO-ANNUITANT (Please Print)

     Name ______________________________ Relationship to Annuitant _____________

     Address ______________________ City ____________ State ______ Zip _________

     Date of Birth _____  ___  ____   Age __  Sex [ ] Male  [ ]Female
                   Month  Day  Year

     Soc Sec # ________  _____  ________

- --------------------------------------------------------------------------------
2.   CONTRACT OWNER (if different from the Proposed Annuitant)

                                   Relationship to      Soc Sec # or
   Name __________________________ Annuitant __________ Tax ID # _____ ___ _____

     Address ______________________ City ____________ State ______ Zip _________

- --------------------------------------------------------------------------------
3.   BENEFICIARY DESIGNATION (MUST specify relationship to Annuitant or
     Co-Annuitant)

     Primary(Class 1) _______________________________________________ 

     Relationship to     [ ] Annuitant               Date of
                         [ ] Co-Annuitant __________ Birth __________

     Contingent(Class 2) ____________________________________________

     Relationship to     [ ] Annuitant               Date of
                         [ ] Co-Annuitant  _________ Birth __________

- --------------------------------------------------------------------------------
4.   INITIAL PURCHASE PAYMENT (minimum $1000):

          $__________________________________________
              (Make checks payable to Prudential)

- --------------------------------------------------------------------------------
5.   INVESTMENT SELECTION- Complete only if you are applying for a variable
     annuity contract of Prudential's Variable Investment Plan Series
     Select one or more: ($300 minimum for each subaccount selected):
          (All % allocations must be expressed in whole numbers)

     [ ] Bond                                     ___%

     [ ] Money Market                             ___%

     [ ] Common Stock                             ___%

     [ ] Aggressively Managed Flexible            ___%

     [ ] Conservatively Managed Flexible          ___%

     [ ] Fixed Account                            ___%

     [ ] Other                                    ___%

          TOTAL INVESTED                          100%
                                                  ====

     Any future purchases will be allocated in the same percentage(s) as above
     unless specific instructions to change the allocations are submitted.

- --------------------------------------------------------------------------------
6.   ANNUITY COMMENCEMENT DATE

     Annuity payments to begin
     on the first day of                        ___________   ________
                                                  (Month)      (Year)
     (Cannot be later than the month following the annuitant's 80th birthday)

- --------------------------------------------------------------------------------
7.   Will the annuity applied for replace any existing annuity or life
     insurance? [ ]Yes [ ]No  If yes, please furnish details.

     Name of Insured ___________________________________________________________

     Insurance Company _________________________________________________________

     Policy Number(s) __________________________________________________________

- --------------------------------------------------------------------------------
8.   REMARKS OR SPECIAL REQUESTS



- --------------------------------------------------------------------------------
                                     
<PAGE>

- --------------------------------------------------------------------------------
NOTE: If unable to obtain an answer to D, E, and F, print "NR" (no response)
      immediately following the question and estimate the answer to the extent
      possible.
- --------------------------------------------------------------------------------

1.   INFORMATION RELATING TO THE PURCHASER (To be Completed by writing agent or
     Registered Representative)

     A.   Occupation* __________________________________________________________
                          *If in the securities business, record the name and 
                           address of the employer here:

          ______________________________________________________________________

     B.   Marital Status _______________________________________________________

     C.   Number of Dependents _________________________________________________

     D.   Estimated Family Income ______________________________________________

     E.   Estimated Amount of Family Investments and Savings ___________________

     F.   Amount of Insurance on Purchaser's Life ______________________________

     G.   Source of Investment _________________________________________________

     H.   Do you have, from any source, facts that the proposed Purchaser may
          replace or change any current insurance or annuity in any company?
          [ ]Yes [ ]No  If Yes, please furnish details.

- --------------------------------------------------------------------------------
2.   ACKNOWLEDGMENT OF PURCHASER

     To the best of my knowledge and belief, my responses are correct and true.
     I understand that the Company reserves the right to reject any application
     or purchase payment. If this application is declined, there shall be no
     liability on the Company and my purchase payment shall be returned.

     If this application is for a variable annuity contract of Prudential's
     Variable Investment Plan Series, I understand that; (1) payments and values
     are based on the investment experience of a separate account; and, (2) they
     may vary and are not guaranteed as to fixed dollar amount. I have received
     the current prospectus for (1) a variable annuity contract of Prudential's
     Variable Investment Plan Series; and, (2) The Prudential Series Fund, Inc.
     (Check here if a Statement of Additional Information is desired. [ ])

SIGNED AT: ________________________________     ________________________________
                       (State)                               (Date)

SIGNATURE(S): _____________________________     ________________________________
                  (Proposed Annuitant)               (Owner, if applicable)

WITNESS: __________________________________
          (Writing Agent or Representative)

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

To be Completed by Writing Agent or          To be Completed by Registered
Registered Representative                    Representative
(Pruco Securities)

________________________________________     ___________________________________
NAME AND TITLE -- Please Print               NAME -- Please Print

________________________________________     ___________________________________
CONTRACT NO.       OFFICE CODE      RHO      CONTRACT NO.       OFFICE CODE

_______________________(____)___________     __________________(____)___________
OFFICE                 PHONE NO.             BRANCH OFFICE     PHONE NO.

================================================================================
VA 200 Ed 11/86 -- Non-Qualified
                                      


                               Application for an Annuity Contract
                               [ ] The Prudential Insurance Company of America
                               [ ] Pruco Life Insurance Company, a subsidiary of
                                   The Prudential Insurance Company of America
                               Corporate Offices, Newark, New Jersey


[ ] Qualified   [ ] Non-Qualified       Policy number _____________          
================================================================================
1.   Proposed Annuitant (Owner, unless otherwise indicated in #3)   Sex
     Name -- first, initial, last (Print)                           M   F
                                                                   [ ] [ ]
     ______________________________________________________________________

     Date of Birth            Age            Social Security No.
     Mo.   Day  Yr.
     _____________            ____           ___________________

     Address No.   Street         City    State       Zip     State of Residence

================================================================================
2.   Proposed Co-annuitant (if any) (Do not complete if applying for a tax-
     qualified plan other than a Prudential Income Annuity)
     Name -- first, initial, last (Print)            Sex        Date of Birth 
                                                    M   F       Mo.  Day  Yr. 
     _______________________________________       [ ] [ ]      _____________ 
                                                                 
     Age      Social Security No.      Relationship to 
     _____    ___________________      person named in 1.  _____________________
          

================================================================================
3.   Contract Owner (if other than Proposed Annuitant)(Do not complete if
     applying for an IRA, SEP or TDA contract)
     Name -- first, initial, last (Print)    Date of Birth     Social Security 
                                              Mo.  Day  Yr.    or Tax ID no.    
     _____________________________________   _____________     _________________
     
     Relationship to the Annuitant _____________________________________________
     Address No.     Street                 City           State        Zip
================================================================================
4.   Beneficiary: (Give name, age and relationship to person named in 1.)(Do not
     complete if  applying for a Pension/Profit Sharing Plan. The beneficiary
     for a contract owned by a trustee or an employer is the owner.)
     a.  Primary (Class 1):
     ---------------------------------------------------------------------------
     b.  Contingent (Class 2) if any:
================================================================================
5.   Kind of Annuity (If a Variable contract is applied for, complete 
     suitability form.)
     a. Fixed Annuities: [ ] Prudential Income Annuity (PIA)
        [ ] Fixed Interest Plan [ ] Discovery ___ year(s) guarantee
        [ ] ________________________
     b. Variable Annuities: [ ]  Discovery Plus   [ ]  Variable Investment Plan 
        [ ] __________________
     c. Future Value Annuity [ ] 2 Yr. [ ] 3 Yr. [ ] 4 Yr. [ ] 5 Yr.
                             [ ] 6 Yr. [ ] 7 Yr. [ ] 8 Yr. [ ] 9 Yr.  [ ] 10 Yr.
================================================================================
6.   Purchase Payments   Amount paid with application: $______________ 
     [ ]  None (check 'None' on Section 457 Plans)
     Mode of Purchase Payment:  [ ] Ann. [ ] Semi-Ann. [ ] Quar. [ ] Pay. Budg. 
                                [ ] Pru-Matic  [ ] Gov't. Allot.
================================================================================
7.   Source of Funds (NOTE: Contract minimums must be met.)
     IRA: Is any part of this purchase payment an IRA rollover?  [ ] Yes [ ] No
     Amount of Rollover:  $_____________ 
     Regular Contribution:  $_________ Year ________  $________ Year ________
     Will the Purchase Payment be transferred from another financial
     institution?       [ ] Yes   [ ] No
================================================================================
8.   Complete this Section only if a Qualified Plan or Program is being applied
     for (Check One) Type: 
     [ ] IRA -- Individual Retirement Annuity  

     [ ] SEP (Plan Name) _____________________________________________

     [ ] Pension/Profit Sharing (Plan Name) __________________________

     [ ] Section 457 (Plan Name) _____________________________________

     [ ] TDA -- Public School Employees - 403(b) _____________________

     [ ] TDA -- Non-Profit Organization 501(c)(3)_____________________
         For TDA Billing:
         Employer Name _______________________________________________
         Employer Address ____________________________________________
         _____________________________________________________________
================================================================================
Complete 9 for Prudential Income Annuity Only
9a.  Kind of Payment Option ____________________________________________________
     Frequency of annuity payment         Amount of each annuity payment
     [ ] Mo. [ ] Quar. [ ] Semi-Ann.      $_____________________________
     [ ] Ann.
     
     Date of first annuity payment _______________________________
- --------------------------------------------------------------------------- 
     b. Annuity payments payable to: Name __________________________________ 
        No.    Street                 City             State           Zip
- --------------------------------------------------------------------------------
Note: The Prudential Income Annuity contract will take effect on the date the
purchase payment is received in the Home Office, even if the Annuitant or
Co-Annuitant died after that date but before the contract is issued.  
Proof of the date of birth of each proposed Annuitant, such as birth
certificate, baptismal record, etc. must be submitted with the application
whenever a life annuity option is selected.
================================================================================
ORD 87348-92 Litho in U.S.A.

<PAGE>
[ILLEGIBLE]                                                        Yes    No   
person named in 1 or 2?  (If yes, for each such contract give the  [ ]    [ ]  
person's name, name of company, plan, amount and contract numbers.)  
                                                                  

================================================================================
11.   Special Requests










================================================================================
OWNERSHIP: The owner of the contract will be as required by the applicable
retirement plan. If there is no such plan, the owner will be (1) the applicant
if other than the proposed Annuitant, or else (2) the proposed Annuitant. In
either case, any limitations required by the retirement plan or program will be
part of the contract. It is understood that the purchase payment becomes the
absolute property of the Company.


________________________________________     ___________________________________
Signature of Proposed Co-Annuitant           Signature of Proposed Annuitant

Dated at ________________ on _____________, 19___________     
         City/State



_________________________________________________________
Signature of Applicant (if other than proposed Annuitant)
(If owner is a firm or corporation, show that company's name)

By ______________________________________________________
(Signature and title of officer signing for that Company)

Witness _________________________________________________
(Licensed Writing Representative must witness where 
required by law.)



================================================================================
ORD 87348-92 




                                   Supplement to the Application
                                   _The Prudential Insurance Company of America
                                   _Pruco Life Insurance Company

                                   A Subsidiary of The Prudential  Insurance
                                   Company of America

                                   No.__________________________________________

A Supplement to the Application for a variable contract in which _______________

__________________________________ is named as the proposed Annuitant.








I BELIEVE THIS CONTRACT  MEETS MY INSURANCE  NEEDS AND FINANCIAL  OBJECTIVES.  I
ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT.  I UNDERSTAND THAT
THE  CONTRACT'S  VALUE AND DEATH  BENEFIT MAY VARY  DEPENDING ON THE  CONTRACT'S
INVESTMENT EXPERIENCE ............................................YES [ ] NO [ ]

An illustration of values is available upon request.





























Date                                      Signature of Applicant

                              ,19
- --------------------------------------------------------------------------------

- ------------
ORD 87454-92
- ------------


                                          


                               PURCHASE AGREEMENT

                                               
     This agreement is made on the 4th day of March, 1983, between The
Prudential Insurance Company of America, a New Jersey corporation
("Prudential"), on its own behalf and on behalf of The Prudential Individual
Variable Contract Account The Prudential Qualified Individual Variable Account
("Variable Annuity Accounts"), and The Prudential Series Fund, Inc. a Maryland
corporation (the "Series Fund").

     1. The Variable Annuity Accounts are accounts established and maintained by
Prudential under New Jersey law as separate investment accounts for the purpose
of holding and investing payments, made under variable annuity contracts
("Contracts") issued by Prudential, as provided in such Contracts. Such amounts
will be held in one or more of five subaccounts of either of the Variable
Annuity Accounts, as directed by the respective contractholders. The Variable
Annuity Accounts are registered as unit investment trusts under the Investment
Company Act of 1940.


     2. The Series Fund is registered as an open-end management company
organized as a series fund under the Investment Company Act of 1940. The Series
Fund will be comprised initially of five Portfolios: a Money Market Portfolio, a
Common Stock Portfolio, a Bond Portfolio, a Conservatively Managed Flexible
Portfolio, and an Aggressively Managed Flexible Portfolio.
                                          

<PAGE>




                                       -2-




     3. Prudential will invest the assets held in each subaccount of the
Variable Annuity Accounts in shares of the corresponding Portfolio described
above.


     NOW, THEREFORE, Prudential and the Series Fund hereby agree as follows:


     1. The Series Fund agrees to sell shares in each of its Portfolios to the
corresponding subaccount of each of the Variable Annuity Accounts at net asset
value. Orders for such shares shall be made by wire, hand delivery of written
orders or telephone directed to the transfer agent designated by the Series
Fund. Payment for such shares shall be made by wire transfer of federal funds to
the Custodian designated by the Series Fund within five business days after the
placing of the corresponding orders.


     2. Redemption of Series Fund shares shall be requested by wire, hand
delivery of written requests or telephone directed to the said transfer agent
and payment therefor shall be made by wire transfer of federal funds within five
business days after the request for redemption is received.


     3. On each day in which the net asset value of the shares of any Portfolio
in the Series Fund is determined, the Series Fund shall provide Prudential with
the net asset value of such shares by 5:30 p.m. New York City time or at such
later time as shall be agreed to by the parties.





                                          
<PAGE>




                                       -3-



     4. This Agreement shall remain in effect until terminated by the mutual
written consent of the parties hereto.


                                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                                   BY /s/ John J. Marcus
                                      ------------------------------
                                          John J. Marcus
                                          Senior Vice President



                                   THE PRUDENTIAL SERIES FUND, INC.
                                    
                                   BY /s/ Martin D. Vogt
                                      ------------------------------
                                          Martin D. Vogt
                                            President















EXHIBIT 9



                                                    _________________, 1999

The Prudential Insurance Company of America
751 Broad Street
Newark, New Jersey 07102-3777


Gentlemen:

In may capacity as Chief Counsel, Variable Products, Law Department of The
Prudential Insurance Company of America, I have reviewed the establishment of
The Prudential Qualified Individual Variable Contract Account (the "Account") on
October 12, 1982, by the Board of Directors of The Prudential Insurance Company
of America ("Prudential") as a separate account for assets applicable to certain
qualified variable annuity contracts, pursuant to the provisions of Section
17B:28-7 of the Revised Statutes of New Jersey. I was responsible for oversight
of the preparation and review of the Registration Statement on Form N-4, as
amended, filed by Prudential with the Securities and Exchange Commission
(Registration No. 2-81318) under the Securities Act of 1933 and the Investment
Company Act of 1940, for the registration of certain qualified variable annuity
contracts issued with respect to the Account.

I am of the following opinion:

     (1)  Prudential was duly organized under the laws of New Jersey and is a
          validly existing corporation.

     (2)  The Account has been duly created and is validly existing as a
          separate account pursuant to the aforesaid provisions of New Jersey
          law.

     (3)  The portion of the assets held in the Account equal to the reserve and
          other liabilities for variable benefits under the qualified variable
          annuity contracts is not chargeable with liabilities arising out of
          any other business Prudential may conduct.

     (4)  The qualified variable annuity contracts are legal and binding
          obligations of Prudential in accordance with their terms.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.




                                                     Very truly yours,



                                                     Clifford E. Kirsch, Esq.









                                                                    EXHIBIT 10

                      CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 26 to the registration
statement on Form N-4 (the "Registration Statement") of our report dated March
19, 1999, relating to the financial statements of the Prudential Qualified
Individual Variable Contract Account, which appears in such Statement of
Additional Information.


We also consent to the use in the Statement of Additional Information
constituting part of this Registration Statement of our report dated February
26, 1999, relating to the consolidated financial statements of The Prudential
Insurance Company of America and its subsidiaries, which appears in such
Statement of Additional Information.


We also consent to the reference to us under the heading "Experts" in the
Statement of Additional Information.


PricewaterhouseCoopers  LLP

New York, New York
April 23, 1999




<TABLE>
<CAPTION>

ANNUALIZED RATES OF RETURN        30/9999*1000 = $3.00                                              Date: 13-Apr-99
AVG POLICY SIZE 1000

   VIP/QVIP                       MMKT        DIBOND       EQUITY       FLXMGD        CONS        EQINC        RPA         HIYLD    
- ------------------------------------------------------------------------------------------------------------------------------------


5 YR RATE OF RETURN

<S>                              <C>          <C>          <C>          <C>          <C>         <C>          <C>          <C> 
YEARS IN EXISTENCE                    5.00         5.00         5.00         5.00         5.00        5.00         5.00         5.00
                                   1000.00      1000.00      1000.00      1000.00      1000.00     1000.00      1000.00      1000.00
93(OR INCEPT) TO '94 ROR             2.82%       -4.38%        1.56%       -4.31%       -2.14%       0.23%        7.11%       -3.88%
93 TO '94 ERV                      1028.16       956.23      1015.60       956.87       978.59     1002.32      1071.09       961.25
ANNUAL ADMIN CHARGE                   3.00         3.00         3.00         3.00         3.00        3.00         3.00         3.00
93 TO '94 ERV LESS ADMIN CHG       1025.16       953.23      1012.60       953.87       975.59      999.32      1068.09       958.25
94(OR INCEPT) TO '95 ROR             4.57%       19.31%       29.74%       22.66%       15.89%      20.26%        7.52%       16.17%
94 TO '95 ERV                      1072.00      1137.26      1313.76      1170.04      1130.58     1201.82      1148.40      1113.18
ANNUAL ADMIN CHARGE                   3.00         3.00         3.00         3.00         3.00        3.00         3.00         3.00
94 TO '95 ERV LESS ADMIN CHG       1069.00      1134.26      1310.76      1167.04      1127.58     1198.82      1145.40      1110.18
95(OR INCEPT) TO '96 ROR             3.99%        3.15%       17.11%       12.29%       11.29%      20.29%        4.41%       10.06%
95 TO '96 ERV                      1111.62      1170.02      1535.05      1310.42      1254.86     1442.12      1195.93      1221.92
ANNUAL ADMIN CHARGE                   3.00         3.00         3.00         3.00         3.00        3.00         3.00         3.00
95 TO '96 ERV LESS ADMIN CHG       1108.62      1167.02      1532.05      1307.42      1251.86     1439.12      1192.93      1218.92
96(OR INCEPT) TO '97 ROR             4.17%        7.28%       23.18%       16.56%       12.10%      34.99%        9.97%       12.44%
96 TO '97 ERV                      1154.84      1252.00      1887.18      1523.97      1403.37     1942.64      1311.81      1370.55
ANNUAL ADMIN CHARGE                   3.00         3.00         3.00         3.00         3.00        3.00         3.00         3.00
96 TO '97 ERV LESS ADMIN CHG       1151.84      1249.00      1884.18      1520.97      1400.37     1939.64      1308.81      1367.55
97(OR INCEPT) TO '98 ROR             4.14%        5.89%        8.04%        8.91%       10.40%      -3.54%        8.09%       -3.52%
97 TO '98 ERV                      1199.55      1322.57      2035.70      1656.56      1546.00     1870.90      1414.69      1319.39
ANNUAL ADMIN CHARGE                   3.00         3.00         3.00         3.00         3.00        3.00         3.00         3.00
97 TO '98 ERV LESS ADMIN CHG       1196.55      1319.57      2032.70      1653.56      1543.00     1867.90      1411.69      1316.39
ANNUALIZED ROR BEFORE LOAD           3.65%        5.70%       15.24%       10.58%        9.06%      13.31%        7.14%        5.65%

AMT SUBJ TO LOAD IF + RETURN        880.34       868.04       796.73       834.64       845.70      813.21       858.83       868.36
AMT SUBJ TO LOAD IF - RETURN       1076.90      1187.61      1829.43      1488.21      1388.70     1681.11      1270.52      1184.75
AMT SUBJ TO LOAD                    880.34       868.04       796.73       834.64       845.70      813.21       858.83       868.36
5TH (OR INCEPTION) SALE CHARGE       3.00%        3.00%        3.00%        3.00%        3.00%       3.00%        3.00%        3.00%
AMT OF LOAD                          26.41        26.04        23.90        25.04        25.37       24.40        25.76        26.05
ERV LESS LOAD                      1170.14      1293.53      2008.80      1628.53      1517.63     1843.50      1385.92      1290.34
- ------------------------------------------------------------------------------------------------------------------------------------

ANN.5YR RET W/LOAD AND ADM CHG       3.19%        5.28%       14.97%       10.24%        8.70%      13.01%        6.75%        5.23%

<CAPTION>

   VIP/QVIP                        NATR         STIX         GLOBAL        GVTINC       PRUJEN         SMCAP
- -----------------------------------------------------------------------------------------------------------------


5 YR RATE OF RETURN

<S>                                 <C>         <C>            <C>          <C>         <C>          <C>               
YEARS IN EXISTENCE                      5.00        5.00           5.00         5.00      N/A           N/A
                                     1000.00     1000.00        1000.00      1000.00      N/A           N/A
93(OR INCEPT) TO '94 ROR              -5.43%      -0.19%         -6.02%       -6.29%      N/A           N/A
93 TO '94 ERV                         945.69      998.10         939.82       937.05      N/A           N/A
ANNUAL ADMIN CHARGE                     3.00        3.00           3.00         3.00      N/A           N/A
93 TO '94 ERV LESS ADMIN CHG          942.69      995.10         936.82       934.05      N/A           N/A
94(OR INCEPT) TO '95 ROR              25.42%      35.45%         14.51%       18.06%      N/A           N/A
94 TO '95 ERV                        1182.32     1347.83        1072.76      1102.76      N/A           N/A
ANNUAL ADMIN CHARGE                     3.00        3.00           3.00         3.00      N/A           N/A
94 TO '95 ERV LESS ADMIN CHG         1179.32     1344.83        1069.76      1099.76      N/A           N/A
95(OR INCEPT) TO '96 ROR              29.32%      21.11%         18.27%        1.00%      N/A           N/A
95 TO '96 ERV                        1525.06     1628.72        1265.21      1110.79      N/A           N/A
ANNUAL ADMIN CHARGE                     3.00        3.00           3.00         3.00      N/A           N/A
95 TO '96 ERV LESS ADMIN CHG         1522.06     1625.72        1262.21      1107.79      N/A           N/A
96(OR INCEPT) TO '97 ROR             -12.64%      31.26%          5.71%        8.37%      N/A           N/A
96 TO '97 ERV                        1329.70     2133.89        1334.31      1200.50      N/A           N/A
ANNUAL ADMIN CHARGE                     3.00        3.00           3.00         3.00      N/A           N/A
96 TO '97 ERV LESS ADMIN CHG         1326.70     2130.89        1331.31      1197.50      N/A           N/A
97(OR INCEPT) TO '98 ROR             -18.09%      26.89%         23.60%        7.78%      N/A           N/A
97 TO '98 ERV                        1086.75     2703.98        1645.49      1290.68      N/A           N/A
ANNUAL ADMIN CHARGE                     3.00        3.00           3.00         3.00      N/A           N/A
97 TO '98 ERV LESS ADMIN CHG         1083.75     2700.98        1642.49      1287.68      N/A           N/A
ANNUALIZED ROR BEFORE LOAD             1.62%      21.98%         10.43%        5.19%      N/A           N/A       1.09571 W/OUT

AMT SUBJ TO LOAD IF + RETURN          891.63      729.90         835.75       871.23      N/A           N/A
AMT SUBJ TO LOAD IF - RETURN          975.37     2430.88        1478.24      1158.91      N/A           N/A
AMT SUBJ TO LOAD                      891.63      729.90         835.75       871.23      N/A           N/A
5TH (OR INCEPTION) SALE CHARGE         3.00%       3.00%          3.00%        3.00%      N/A           N/A
AMT OF LOAD                            26.75       21.90          25.07        26.14      N/A           N/A
ERV LESS LOAD                        1057.00     2679.08        1617.42      1261.54      N/A           N/A
- -----------------------------------------------------------------------------------------------------------------

ANN.5YR RET W/LOAD AND ADM CHG         1.11%      21.79%         10.09%        4.76%      N/A           N/A      105.13% WITH
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

         UNIT VALUES FOR THE LAST DAY OF EVERY QUARTER SINCE INCEPTION FOR THE PRU VIP/QVIP PRODUCTS


         PRU VIP/QVIP             MMKT      DIBOND     EQUITY     FLXMGD       CONS       EQINC        RPA       HIYLD
         -----------------------------------------------------------------------------------------------------------------

<S>                             <C>        <C>        <C>         <C>        <C>         <C>         <C>        <C>       
         INCEPTION DATE         02-Jun-83  08-Jun-83  06-Jun-83   27-May-83  02-Jun-83   19-Feb-88   02-May-88  23-Feb-87

         WHOLE YEARS SINCE
         INCEPTION                  15.00      15.00      15.00       15.00      15.00       10.00       10.00      11.00

         INCEPTION
         UNIT VALUE               1.00018    0.99692    1.00243     1.00055    1.00433     0.99731     1.00345    0.99968



          30-Jun-83               1.00530    1.00272    1.02693     1.01753    1.01314     N/A         N/A        N/A

          30-Sep-83               1.02378    1.00281    0.99493     1.00086    1.01412     N/A         N/A        N/A

          31-Dec-83               1.04235    1.01629    0.98158     0.99072    1.01744     N/A         N/A        N/A

  1984    31-Mar-84               1.06224    1.02641    0.94082     0.95477    1.01202     N/A         N/A        N/A

          30-Jun-84               1.08491    1.01686    0.94069     0.94290    1.01601     N/A         N/A        N/A

          30-Sep-84               1.11094    1.07968    1.02073     1.01900    1.06862     N/A         N/A        N/A

          31-Dec-84               1.13500    1.13678    1.04475     1.05536    1.11031     N/A         N/A        N/A

  1985    31-Mar-85               1.15381    1.15086    1.13787     1.11869    1.15299     N/A         N/A        N/A

          30-Jun-85               1.17327    1.23024    1.21202     1.19396    1.22381     N/A         N/A        N/A

          30-Sep-85               1.19150    1.25129    1.15091     1.16127    1.21222     N/A         N/A        N/A

          31-Dec-85               1.21015    1.33247    1.37157     1.31311    1.32837     N/A         N/A        N/A

  1986    31-Mar-86               1.22814    1.40367    1.57422     1.50095    1.46075     N/A         N/A        N/A

          30-Jun-86               1.24479    1.42443    1.61918     1.52792    1.48853     N/A         N/A        N/A

          30-Sep-86               1.26020    1.45293    1.49957     1.43418    1.45031     N/A         N/A        N/A

          31-Dec-86               1.27393    1.50690    1.55982     1.49834    1.49851     N/A         N/A        N/A

  1987    31-Mar-87               1.28845    1.52078    1.89171     1.67720    1.61707     N/A         N/A        1.01388

          30-Jun-87               1.30457    1.48402    1.95230     1.67787    1.62673     N/A         N/A        1.00209

          30-Sep-87               1.32190    1.42835    2.05180     1.71478    1.65695     N/A         N/A        0.97156

          31-Dec-87               1.34087    1.49322    1.56684     1.45340    1.50337     N/A         N/A        0.94096

  1988    31-Mar-88               1.35917    1.54477    1.71753     1.54476    1.57127     1.00283     N/A        1.00277

          30-Jun-88               1.37746    1.55993    1.82741     1.60152    1.61545     1.06131     1.00567    1.01443

          30-Sep-88               1.39893    1.58964    1.76701     1.59446    1.61699     1.07484     1.06071    1.03300

          31-Dec-88               1.42268    1.59635    1.81228     1.62049    1.63683     1.09874     1.04699    1.05227

  1989    31-Mar-89               1.44979    1.60677    1.91512     1.67575    1.68042     1.15617     1.00801    1.06878

          30-Jun-89               1.47974    1.72914    2.07947     1.80804    1.76639     1.25045     1.03733    1.09308

          30-Sep-89               1.50774    1.73731    2.27225     1.89836    1.83900     1.32945     1.04684    1.06706

          31-Dec-89               1.53581    1.79017    2.32328     1.94994    1.89226     1.33181     1.06798    1.01855

  1990    31-Mar-90               1.56157    1.76305    2.26411     1.89201    1.87649     1.27764     1.07731    0.97265

          30-Jun-90               1.58799    1.81856    2.31918     1.97655    1.94414     1.31537     1.09102    1.02401

          30-Sep-90               1.61429    1.83157    1.95179     1.82538    1.88034     1.17152     1.10563    0.92218

          31-Dec-90               1.64133    1.91594    2.17588     1.96344    1.96812     1.26685     1.11478    0.88724

  1991    31-Mar-91               1.66497    1.96084    2.58450     2.12974    2.09088     1.40599     1.10959    1.02526

          28-Jun-91               1.68544    1.99025    2.60830     2.12168    2.11635     1.43223     1.11762    1.10641

          30-Sep-91               1.70425    2.09827    2.60343     2.25339    2.19644     1.50276     1.11776    1.16647

          31-Dec-91               1.72182    2.20438    2.70927     2.43353    2.31570     1.59617     1.10861    1.22019

  1992    31-Mar-92               1.73586    2.16912    2.85556     2.34998    2.29284     1.57543     1.09354    1.30324

          30-Jun-92               1.74730    2.25069    2.87122     2.36693    2.32268     1.60774     1.05510    1.34331

          30-Sep-92               1.75701    2.33922    2.89727     2.47154    2.37266     1.67452     1.06000    1.39449

          31-Dec-92               1.76575    2.33452    3.05622     2.58742    2.44709     1.73693     1.07040    1.41713

  1993    31-Mar-93               1.77362    2.42875    3.32862     2.72488    2.56017     1.92882     1.07877    1.49992

          30-Jun-93               1.78090    2.48888    3.42357     2.80169    2.62331     1.99606     1.09458    1.56897

          30-Sep-93               1.78846    2.56012    3.54449     2.94155    2.70625     2.06034     1.11619    1.58829

          31-Dec-93               1.79633    2.54072    3.68057     2.95516    2.71321     2.09889     1.12217    1.67012

  1994    31-Mar-94               1.80430    2.46157    3.57550     2.80289    2.63248     2.05769     1.12660    1.66214

          30-Jun-94               1.81484    2.42965    3.58857     2.77774    2.63448     2.06517     1.14052    1.64217

          30-Sep-94               1.82928    2.43504    3.78210     2.86672    2.68727     2.18204     1.15929    1.63973

          30-Dec-94               1.84692    2.42952    3.73800     2.82770    2.65511     2.10375     1.20195    1.60540

  1995    31-Mar-95               1.86773    2.52991    4.05731     2.95141    2.76933     2.22908     1.20958    1.68499

          30-Jun-95               1.88943    2.70702    4.33227     3.15285    2.89912     2.38653     1.23749    1.74803

          30-Sep-95               1.91033    2.76447    4.70277     3.34246    2.99686     2.51048     1.27929    1.79379

          31-Dec-95               1.93131    2.89855    4.84971     3.46853    3.07694     2.53006     1.29232    1.86497

  1996    31-Mar-96               1.95034    2.83333    5.09322     3.54782    3.17730     2.67539     1.31111    1.92154

          30-Jun-96               1.96919    2.83716    5.17367     3.62417    3.21302     2.69254     1.32409    1.94263

          30-Sep-96               1.98847    2.89272    5.23847     3.72708    3.25693     2.75868     1.33385    2.02568

          31-Dec-96               2.00831    2.98995    5.67957     3.89468    3.42427     3.04353     1.34933    2.05267

  1997    31-Mar-97               2.02785    2.97297    5.74831     3.85675    3.41989     3.05903     1.37463    2.05429

          30-Jun-97               2.04847    3.09448    6.39521     4.26399    3.66957     3.55431     1.40169    2.16052

          30-Sep-97               2.06983    3.19572    7.10653     4.61139    3.86452     4.10719     1.45336    2.28379

          31-Dec-97               2.09203    3.20766    6.99611     4.53976    3.83869     4.10841     1.48380    2.30802

  1998    31-Mar-98               2.11355    3.25776    7.83953     4.90872    4.06859     4.56104     1.50171    2.41722

          30-Jun-98               2.13528    3.33047    7.82240     4.94566    4.12224     4.48870     1.52455    2.41376

          30-Sep-98               2.15736    3.40084    6.64350     4.51187    3.97944     3.66324     1.55612    2.17797

          31-Dec-98               2.17869    3.39660    7.55872     4.94447    4.23790     3.96281     1.60383    2.22674
<CAPTION>
                               Date:           13-Apr-99
         UNIT VALUES FOR THE LAST DAY OF EVERY QUARTER SINCE INCEPTION FOR THE PRU VIP/QVIP PRODUCTS


         PRU VIP/QVIP              NATR         STIX        GLOBAL       GVTINC      PRUJEN         SMCAP       TOTAL
         ---------------------------------------------------------------------------------------------------------------

<S>                               <C>          <C>           <C>        <C>           <C>           <C>       
         INCEPTION DATE           02-May-88    19-Oct-87     01-May-89  01-May-89     01-May-95     01-May-95

         WHOLE YEARS SINCE
         INCEPTION                    10.00        11.00          9.00       9.00          3.00          3.00

         INCEPTION
         UNIT VALUE                 0.98753      0.80241       1.01099    1.00062       1.00870       1.00160  13.81670



          30-Jun-83                N/A          N/A           N/A         N/A          N/A           N/A        5.06563

          30-Sep-83                N/A          N/A           N/A         N/A          N/A           N/A        5.03651

          31-Dec-83                N/A          N/A           N/A         N/A          N/A           N/A        5.04839

  1984    31-Mar-84                N/A          N/A           N/A         N/A          N/A           N/A        4.99628

          30-Jun-84                N/A          N/A           N/A         N/A          N/A           N/A        5.00136

          30-Sep-84                N/A          N/A           N/A         N/A          N/A           N/A        5.29897

          31-Dec-84                N/A          N/A           N/A         N/A          N/A           N/A        5.48221

  1985    31-Mar-85                N/A          N/A           N/A         N/A          N/A           N/A        5.71422

          30-Jun-85                N/A          N/A           N/A         N/A          N/A           N/A        6.03329

          30-Sep-85                N/A          N/A           N/A         N/A          N/A           N/A        5.96718

          31-Dec-85                N/A          N/A           N/A         N/A          N/A           N/A        6.55566

  1986    31-Mar-86                N/A          N/A           N/A         N/A          N/A           N/A        7.16773

          30-Jun-86                N/A          N/A           N/A         N/A          N/A           N/A        7.30484

          30-Sep-86                N/A          N/A           N/A         N/A          N/A           N/A        7.09719

          31-Dec-86                N/A          N/A           N/A         N/A          N/A           N/A        7.33751

  1987    31-Mar-87                N/A          N/A           N/A         N/A          N/A           N/A        9.00908

          30-Jun-87                N/A          N/A           N/A         N/A          N/A           N/A        9.04758

          30-Sep-87                N/A          N/A           N/A         N/A          N/A           N/A        9.14533

          31-Dec-87                N/A           0.85935      N/A         N/A          N/A           N/A        9.15801

  1988    31-Mar-88                N/A           0.90033      N/A         N/A          N/A           N/A       10.64343

          30-Jun-88                 1.03564      0.95325      N/A         N/A          N/A           N/A       13.05207

          30-Sep-88                 0.99000      0.95374      N/A         N/A          N/A           N/A       13.07932

          31-Dec-88                 1.03792      0.98031      N/A         N/A          N/A           N/A       13.30486

  1989    31-Mar-89                 1.14595      1.04491      N/A         N/A          N/A           N/A       13.75167

          30-Jun-89                 1.20265      1.13189       0.98864    1.07011      N/A           N/A       16.63693

          30-Sep-89                 1.30914      1.24716       1.08647    1.07178      N/A           N/A       17.41256

          31-Dec-89                 1.39112      1.26833       1.11445    1.10787      N/A           N/A       17.79157

  1990    31-Mar-90                 1.36906      1.22524       1.02194    1.07736      N/A           N/A       17.37843

          30-Jun-90                 1.34845      1.29438       1.06702    1.11388      N/A           N/A       17.90055

          30-Sep-90                 1.32540      1.11345       0.92869    1.09998      N/A           N/A       16.77022

          31-Dec-90                 1.29539      1.20765       0.95902    1.16389      N/A           N/A       17.55953

  1991    31-Mar-91                 1.35148      1.37708       1.00150    1.17717      N/A           N/A       18.87900

          28-Jun-91                 1.38324      1.36795       0.99418    1.18160      N/A           N/A       19.10525

          30-Sep-91                 1.43378      1.43459       1.04325    1.25997      N/A           N/A       19.81436

          31-Dec-91                 1.41184      1.54800       1.05559    1.33535      N/A           N/A       20.66045

  1992    31-Mar-92                 1.42913      1.50315       1.00468    1.28604      N/A           N/A       20.59857

          30-Jun-92                 1.50681      1.52522       1.05137    1.33707      N/A           N/A       20.98544

          30-Sep-92                 1.54098      1.56677       0.99736    1.40185      N/A           N/A       21.47367

          31-Dec-92                 1.49691      1.63861       1.00733    1.39657      N/A           N/A       21.95488

  1993    31-Mar-93                 1.65960      1.70368       1.09493    1.46481      N/A           N/A       23.24657

          30-Jun-93                 1.81109      1.70478       1.13849    1.51447      N/A           N/A       23.94679

          30-Sep-93                 1.81080      1.74178       1.27875    1.57474      N/A           N/A       24.71176

          31-Dec-93                 1.85126      1.77569       1.42483    1.55337      N/A           N/A       25.18232

  1994    31-Mar-94                 1.79392      1.70182       1.36480    1.48787      N/A           N/A       24.47158

          30-Jun-94                 1.79521      1.70292       1.36149    1.45766      N/A           N/A       24.41042

          30-Sep-94                 1.98188      1.77910       1.41950    1.45439      N/A           N/A       25.21634

          30-Dec-94                 1.75071      1.77231       1.33909    1.45559      N/A           N/A       24.72605

  1995    31-Mar-95                 1.91776      1.93725       1.32967    1.52275      N/A           N/A       26.00677

          30-Jun-95                 2.01860      2.11369       1.45705    1.62031       1.12504       1.06572  29.75315

          30-Sep-95                 2.10210      2.27331       1.56772    1.64504       1.22835       1.18958  31.30655

          31-Dec-95                 2.19574      2.40054       1.53340    1.71849       1.24506       1.18974  32.19536

  1996    31-Mar-96                 2.52219      2.52124       1.62629    1.66881       1.28628       1.24683  33.38169

          30-Jun-96                 2.60714      2.62380       1.68061    1.66687       1.33056       1.30382  33.98927

          30-Sep-96                 2.64028      2.69421       1.71720    1.69021       1.35656       1.34006  34.66040

          31-Dec-96                 2.83947      2.90729       1.81356    1.73574       1.40755       1.40807  36.55399

  1997    31-Mar-97                 2.74960      2.97296       1.79889    1.71698       1.37160       1.32916  36.45291

          30-Jun-97                 2.78093      3.47745       2.02810    1.77095       1.63692       1.56100  39.84359

          30-Sep-97                 3.17386      3.72370       2.10160    1.82623       1.88408       1.80011  43.20191

          31-Dec-97                 2.48061      3.81606       1.91715    1.88100       1.83193       1.74162  42.24285

  1998    31-Mar-98                 2.67357      4.33108       2.19992    1.89997       2.09735       1.92781  45.79782

          30-Jun-98                 2.34689      4.45663       2.27472    1.94367       2.19916       1.83288  45.83701

          30-Sep-98                 2.12709      3.99966       1.94559    2.03999       1.92797       1.45069  41.58133

          31-Dec-98                 2.03196      4.84237       2.36959    2.02736       2.48856       1.70776  45.57736
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                                            Date: 13-Apr-99
UNIT VALUES FOR THE LAST DAY OF EVERY QUARTER SINCE INCEPTION FOR THE PRU VIP/QVIP PRODUCTS  


 PRU VIP/QVIP               MMKT        DIBOND       EQUITY       FLXMGD        CONS         EQINC        RPA         HIYLD    
- -------------------------------------------------------------------------------------------------------------------------------

<S>                        <C>          <C>          <C>          <C>           <C>         <C>          <C>          <C>        
INCEPTION DATE             02-Jun-83    08-Jun-83    06-Jun-83    27-May-83     02-Jun-83   19-Feb-88    02-May-88    23-Feb-87

WHOLE YEARS SINCE
   INCEPTION                   15.00        15.00        15.00        15.00         15.00       10.00        10.00        11.00


   INCEPTION    UNIT VALUE   1.00018      0.99692      1.00243      1.00055       1.00433     0.99731      1.00345      0.99968

31-Dec-97                    2.09203      3.20766      6.99611      4.53976       3.83869     4.10841      1.48380      2.30802

      31-Dec-83              1.04235      1.01629      0.98158      0.99072       1.01744     N/A         N/A          N/A     

      31-Dec-84              1.13500      1.13678      1.04475      1.05536       1.11031     N/A         N/A          N/A     

      31-Dec-85              1.21015      1.33247      1.37157      1.31311       1.32837     N/A         N/A          N/A     

      31-Dec-86              1.27393      1.50690      1.55982      1.49834       1.49851     N/A         N/A          N/A     

      31-Dec-87              1.34087      1.49322      1.56684      1.45340       1.50337     N/A         N/A           0.94096

      31-Dec-88              1.42268      1.59635      1.81228      1.62049       1.63683     1.09874      1.04699      1.05227

      31-Dec-89              1.53581      1.79017      2.32328      1.94994       1.89226     1.33181      1.06798      1.01855

      31-Dec-90              1.64133      1.91594      2.17588      1.96344       1.96812     1.26685      1.11478      0.88724

      31-Dec-91              1.72182      2.20438      2.70927      2.43353       2.31570     1.59617      1.10861      1.22019

      31-Dec-92              1.76575      2.33452      3.05622      2.58742       2.44709     1.73693      1.07040      1.41713

      31-Dec-93              1.79633      2.54072      3.68057      2.95516       2.71321     2.09889      1.12217      1.67012

      30-Dec-94              1.84692      2.42952      3.73800      2.82770       2.65511     2.10375      1.20195      1.60540

      31-Dec-95              1.93131      2.89855      4.84971      3.46853       3.07694     2.53006      1.29232      1.86497

      31-Dec-96              2.00831      2.98995      5.67957      3.89468       3.42427     3.04353      1.34933      2.05267

      31-Dec-97              2.09203      3.20766      6.99611      4.53976       3.83869     4.10841      1.48380      2.30802

      31-Dec-98              2.17869      3.39660      7.55872      4.94447       4.23790     3.96281      1.60383      2.22674





<CAPTION>

UNIT VALUES FOR THE LAST DAY OF EVERY QUARTER SINCE INCEPTION FOR THE PRU VIP/QVIP PRODUCTS                                    


 PRU VIP/QVIP               NATR          STIX         GLOBAL        GVTINC        PRUJEN         SMCAP        Total
- -------------------------------------------------------------------------------------------------------------------------

<S>                          <C>         <C>            <C>          <C>            <C>           <C>       
INCEPTION DATE               02-May-88   19-Oct-87      01-May-89    01-May-89      01-May-95     01-May-95

WHOLE YEARS SINCE
   INCEPTION                     10.00       11.00           9.00         9.00           3.00          3.00


   INCEPTION    UNIT VALUE     0.98753     0.80241        1.01099      1.00062        1.00870       1.00160     13.81670

31-Dec-97                      2.48061     3.81606        1.91715      1.88100        1.83193       1.74162     42.24285

      31-Dec-83              N/A           N/A          N/A           N/A           N/A            N/A           5.04839

      31-Dec-84              N/A           N/A          N/A           N/A           N/A            N/A           5.48221

      31-Dec-85              N/A           N/A          N/A           N/A           N/A            N/A           6.55566

      31-Dec-86              N/A           N/A          N/A           N/A           N/A            N/A           7.33751

      31-Dec-87              N/A           0.85935      N/A           N/A           N/A            N/A           9.15801

      31-Dec-88                1.03792     0.98031      N/A           N/A           N/A            N/A          13.30486

      31-Dec-89                1.39112     1.26833        1.11445      1.10787      N/A            N/A          17.79157

      31-Dec-90                1.29539     1.20765        0.95902      1.16389      N/A            N/A          17.55953

      31-Dec-91                1.41184     1.54800        1.05559      1.33535      N/A            N/A          20.66045

      31-Dec-92                1.49691     1.63861        1.00733      1.39657      N/A            N/A          21.95488

      31-Dec-93                1.85126     1.77569        1.42483      1.55337      N/A            N/A          25.18232

      30-Dec-94                1.75071     1.77231        1.33909      1.45559      N/A            N/A          24.72605

      31-Dec-95                2.19574     2.40054        1.53340      1.71849        1.24506       1.18974     32.19536

      31-Dec-96                2.83947     2.90729        1.81356      1.73574        1.40755       1.40807     36.55399

      31-Dec-97                2.48061     3.81606        1.91715      1.88100        1.83193       1.74162     42.24285

      31-Dec-98                2.03196     4.84237        2.36959      2.02736        2.48856       1.70776     45.57736

                                                              PREPARED BY:
                                                              REVIEWED BY:
                                                              APPROVED BY:
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

ANNUALIZED RATES OF RETURN                                                                                           Date: 13-Apr-99
SINCE INCEPTION RATE OF RETURN                                                                                                      

   VIP/QVIP                      MMKT        DIBOND       EQUITY       FLXMGD        CONS         EQINC        RPA         HIYLD    
- ------------------------------------------------------------------------------------------------------------------------------------

<S>                             <C>          <C>          <C>          <C>           <C>         <C>          <C>          <C>  
YEARS IN EXISTENCE                  15.58        15.56        15.57        15.60         15.58       10.86        10.66        11.85
INCEPT. TO '83 ROR                  4.22%        1.94%       -2.08%       -0.98%         1.31%     N/A         N/A          N/A     
INCEPT. TO '83 ERV                1042.17      1019.43       979.20       990.17       1013.05     N/A         N/A          N/A     
ANNUAL ADMIN CHARGE                  1.74         1.69         1.71         1.79          1.74     N/A         N/A          N/A     
INCEPT TO '83 ERV LESS ADMIN CHG  1040.42      1017.74       977.49       988.38       1011.31     N/A         N/A          N/A     
83 (OR INCEPT) TO '84 ROR           8.89%       11.86%        6.44%        6.53%         9.13%     N/A         N/A          N/A     
INCEPT. TO '84 ERV                1132.90      1138.40      1040.40      1052.87       1103.62     N/A         N/A          N/A     
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00     N/A         N/A          N/A     
INCEPT. TO 84 ERV LESS ADMIN CHG  1129.89      1135.40      1037.40      1049.87       1100.62     N/A         N/A          N/A     
'84  TO '85 ROR                     6.62%       17.21%       31.28%       24.42%        19.64%     N/A         N/A          N/A     
'84 TO '85 ERV                    1204.71      1330.85      1361.92      1306.28       1316.77     N/A         N/A          N/A     
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00     N/A         N/A          N/A     
'84 TO '85 ERV LESS ADMIN CHG     1201.71      1327.85      1358.92      1303.28       1313.77     N/A         N/A          N/A     
'85 TO '86 ROR                      5.27%       13.09%       13.73%       14.11%        12.81%     N/A         N/A          N/A     
'85 TO '86 ERV                    1265.04      1501.68      1545.43      1487.12       1482.05     N/A         N/A          N/A     
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00     N/A         N/A          N/A     
'85 TO '86 ERV LESS ADMIN CHG     1262.04      1498.68      1542.43      1484.12       1479.05     N/A         N/A          N/A     
'86 TO '87 ROR                      5.25%       -0.91%        0.45%       -3.00%         0.32%     N/A         N/A            -5.87%
'86 TO '87 ERV                    1328.36      1485.07      1549.37      1439.61       1483.85     N/A         N/A            941.26
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00     N/A         N/A              2.56
'86 TO '87 ERV LESS ADMIN CHG     1325.36      1482.07      1546.37      1436.61       1480.85     N/A         N/A            938.70
'87(OR INCEPT) TO '88 ROR           6.10%        6.91%       15.66%       11.50%         8.88%      10.17%        4.34%       11.83%
'87 TO '88 ERV                    1406.22      1584.43      1788.61      1601.77       1612.31     1101.70      1043.39      1049.75
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        2.60         2.00         3.00
'87 TO '88 ERV LESS ADMIN CHG     1403.22      1581.43      1785.60      1598.77       1609.31     1099.11      1041.39      1046.75
'88(OR INCEPT) TO '89 ROR           7.95%       12.14%       28.20%       20.33%        15.61%      21.21%        2.00%       -3.20%
'88 TO '89 ERV                    1514.81      1773.44      2289.08      1923.80       1860.44     1332.25      1062.27      1013.20
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'88 TO '89 ERV LESS ADMIN CHG     1511.81      1770.44      2286.08      1920.80       1857.44     1329.25      1059.27      1010.20
'89(OR INCEPT) TO 90 ROR            6.87%        7.03%       -6.34%        0.69%         4.01%      -4.88%        4.38%      -12.89%
'89 TO '90 ERV                    1615.68      1894.82      2141.04      1934.10       1931.90     1264.42      1105.69       879.97
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'89 TO '90 ERV LESS ADMIN CHG     1612.68      1891.82      2138.04      1931.10       1928.90     1261.42      1102.69       876.97
'90(OR INCEPT) TO '91 ROR           4.90%       15.05%       24.51%       23.94%        17.66%      26.00%       -0.55%       37.53%
'90 TO '91 ERV                    1691.76      2176.63      2662.16      2393.45       2269.56     1589.33      1096.59      1206.07
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'90 TO '91 ERV LESS ADMIN CHG    1,688.76     2,173.63     2,659.16     2,390.45      2,266.56    1,586.33     1,093.58     1,203.07
'91(OR INCEPT) TO '92 ROR           2.55%        5.90%       12.81%        6.32%         5.67%       8.82%       -3.45%       16.14%
'91 TO '92 ERV                   1,731.85     2,301.95     2,999.69     2,541.61      2,395.16    1,726.22     1,055.89     1,397.24
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'91 TO '92 ERV LESS ADMIN CHG    1,728.85     2,298.95     2,996.69     2,538.61      2,392.16    1,723.22     1,052.89     1,394.24
'92(OR INCEPT) TO '93 ROR           1.73%        8.83%       20.43%       14.21%        10.87%      20.84%        4.84%       17.85%
'92 TO '93 ERV                   1,758.79     2,502.01     3,608.88     2,899.41      2,652.31    2,082.32     1,103.82     1,643.15
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'92 TO '93 ERV LESS ADMIN CHG    1,755.79     2,499.01     3,605.88     2,896.41      2,649.30    2,079.32     1,100.82     1,640.15
'93(OR INCEPT) TO '94 ROR           2.82%       -4.38%        1.56%       -4.31%        -2.14%       0.23%        7.11%       -3.88%
'93 TO '94 ERV                   1,805.24     2,389.64     3,662.14     2,771.49      2,592.57    2,084.13     1,179.08     1,576.59
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'93 TO '94 ERV LESS ADMIN CHG    1,802.24     2,386.64     3,659.14     2,768.49      2,589.57    2,081.13     1,176.08     1,573.59
'94(OR INCEPT) TO '95 ROR           4.57%       19.31%       29.74%       22.66%        15.89%      20.26%        7.52%       16.17%
'94 TO '95 ERV                   1,884.58     2,847.39     4,747.40     3,395.90      3,000.99    2,502.86     1,264.50     1,828.01
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'94 TO '95 ERV LESS ADMIN CHG    1,881.58     2,844.39     4,744.40     3,392.90      2,997.99    2,499.86     1,261.50     1,825.01
'95(OR INCEPT) TO '96 ROR           3.99%        3.15%       17.11%       12.29%        11.29%      20.29%        4.41%       10.06%
'95 TO '96 ERV                   1,956.60     2,934.08     5,556.24     3,809.76      3,336.41    3,007.20     1,317.15     2,008.69
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
'95 TO '96 ERV LESS ADMIN CHG    1,953.60     2,931.08     5,553.24     3,806.76      3,333.41    3,004.20     1,314.15     2,005.69
96(OR INCEPT) TO '97 ROR            4.17%        7.28%       23.18%       16.56%        12.10%      34.99%        9.97%       12.44%
96 TO '97 ERV                    2,035.04     3,144.50     6,840.49     4,437.27      3,736.83    4,055.32     1,445.12     2,255.20
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
96 TO '97 ERV LESS ADMIN CHG     2,032.04     3,141.50     6,837.49     4,434.27      3,733.83    4,052.32     1,442.12     2,252.20
97(OR INCEPT) TO '98 ROR            4.14%        5.89%        8.04%        8.91%        10.40%      -3.54%        8.09%       -3.52%
97 TO '98 ERV                    2,116.21     3,326.54     7,387.35     4,829.58      4,122.14    3,908.71     1,558.77     2,172.88
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
97 TO '98 ERV LESS ADMIN CHG     2,113.21     3,323.54     7,384.35     4,826.58      4,119.14    3,905.71     1,555.77     2,169.88


ANNUALIZED ROR BEFORE LOAD          4.92%        8.02%       13.70%       10.62%         9.51%      13.36%        4.23%        6.75%

AMT SUBJ TO LOAD IF + RETURN       788.68       667.65       261.57       517.34        588.09      609.43       844.42       783.01
AMT SUBJ TO LOAD IF - RETURN     1,901.89     2,991.19     6,645.91     4,343.92      3,707.22    3,515.14     1,400.20     1,952.89
AMT SUBJ TO LOAD                   788.68       667.65       261.57       517.34        588.09      609.43       844.42       783.01
10TH (OR INCEPTION) SALE CHARGE     0.00%        0.00%        0.00%        0.00%         0.00%       0.00%        0.00%        0.00%
AMT OF LOAD                          0.00         0.00         0.00         0.00          0.00        0.00         0.00         0.00
ERV LESS LOAD                    2,113.21     3,323.54     7,384.35     4,826.58      4,119.14    3,905.71     1,555.77     2,169.88
- ------------------------------------------------------------------------------------------------------------------------------------

ANN. RET W/LOAD AND ADM CHG         4.92%        8.02%       13.70%       10.62%         9.51%      13.36%        4.23%        6.75%


<CAPTION>

   VIP/QVIP                      NATR          STIX         GLOBAL        GVTINC        PRUJEN         SMCAP
- -----------------------------------------------------------------------------------------------------------------

<S>                             <C>         <C>             <C>          <C>            <C>           <C> 
YEARS IN EXISTENCE                    10.66       11.20           9.67         9.67           3.67          3.67
INCEPT. TO '83 ROR                N/A           N/A          N/A           N/A           N/A            N/A
INCEPT. TO '83 ERV                N/A           N/A          N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE               N/A           N/A          N/A           N/A           N/A            N/A
INCEPT TO '83 ERV LESS ADMIN CHG  N/A           N/A          N/A           N/A           N/A            N/A
83 (OR INCEPT) TO '84 ROR         N/A           N/A          N/A           N/A           N/A            N/A
INCEPT. TO '84 ERV                N/A           N/A          N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE               N/A           N/A          N/A           N/A           N/A            N/A
INCEPT. TO 84 ERV LESS ADMIN CHG  N/A           N/A          N/A           N/A           N/A            N/A
'84  TO '85 ROR                   N/A           N/A          N/A           N/A           N/A            N/A
'84 TO '85 ERV                    N/A           N/A          N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE               N/A           N/A          N/A           N/A           N/A            N/A
'84 TO '85 ERV LESS ADMIN CHG     N/A           N/A          N/A           N/A           N/A            N/A
'85 TO '86 ROR                    N/A           N/A          N/A           N/A           N/A            N/A
'85 TO '86 ERV                    N/A           N/A          N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE               N/A           N/A          N/A           N/A           N/A            N/A
'85 TO '86 ERV LESS ADMIN CHG     N/A           N/A          N/A           N/A           N/A            N/A
'86 TO '87 ROR                    N/A             7.10%      N/A           N/A           N/A            N/A
'86 TO '87 ERV                    N/A           1070.96      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE               N/A              0.60      N/A           N/A           N/A            N/A
'86 TO '87 ERV LESS ADMIN CHG     N/A           1070.36      N/A           N/A           N/A            N/A
'87(OR INCEPT) TO '88 ROR             5.10%      14.08%      N/A           N/A           N/A            N/A
'87 TO '88 ERV                      1051.03     1221.02      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    2.00        3.00      N/A           N/A           N/A            N/A
'87 TO '88 ERV LESS ADMIN CHG       1049.03     1218.02      N/A           N/A           N/A            N/A
'88(OR INCEPT) TO '89 ROR            34.03%      29.38%         10.23%       10.72%      N/A            N/A
'88 TO '89 ERV                      1406.01     1575.88        1102.34      1107.18      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           2.01         2.01      N/A            N/A
'88 TO '89 ERV LESS ADMIN CHG       1403.01     1572.88        1100.33      1105.18      N/A            N/A
'89(OR INCEPT) TO 90 ROR             -6.88%      -4.78%        -13.95%        5.06%      N/A            N/A
'89 TO '90 ERV                      1306.46     1497.63         946.87      1161.06      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00      N/A            N/A
'89 TO '90 ERV LESS ADMIN CHG       1303.46     1494.63         943.87      1158.06      N/A            N/A
'90(OR INCEPT) TO '91 ROR             8.99%      28.18%         10.07%       14.73%      N/A            N/A
'90 TO '91 ERV                      1420.64     1915.86        1038.91      1328.66      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00      N/A            N/A
'90 TO '91 ERV LESS ADMIN CHG      1,417.64    1,912.86       1,035.91     1,325.66      N/A            N/A
'91(OR INCEPT) TO '92 ROR             6.03%       5.85%         -4.57%        4.58%      N/A            N/A
'91 TO '92 ERV                     1,503.05    2,024.83         988.55     1,386.44      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00      N/A            N/A
'91 TO '92 ERV LESS ADMIN CHG      1,500.05    2,021.83         985.55     1,383.44      N/A            N/A
'92(OR INCEPT) TO '93 ROR            23.67%       8.37%         41.45%       11.23%      N/A            N/A
'92 TO '93 ERV                     1,855.15    2,190.97       1,394.03     1,538.76      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00      N/A            N/A
'92 TO '93 ERV LESS ADMIN CHG      1,852.15    2,187.97       1,391.03     1,535.76      N/A            N/A
'93(OR INCEPT) TO '94 ROR            -5.43%      -0.19%         -6.02%       -6.29%      N/A            N/A
'93 TO '94 ERV                     1,751.55    2,183.80       1,307.32     1,439.09      N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00      N/A            N/A
'93 TO '94 ERV LESS ADMIN CHG      1,748.55    2,180.80       1,304.32     1,436.09      N/A            N/A
'94(OR INCEPT) TO '95 ROR            25.42%      35.45%         14.51%       18.06%         23.43%        18.78%
'94 TO '95 ERV                     2,193.03    2,953.83       1,493.58     1,695.47       1,234.32      1,187.84
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00           2.01          2.01
'94 TO '95 ERV LESS ADMIN CHG      2,190.03    2,950.83       1,490.58     1,692.47       1,232.32      1,185.83
'95(OR INCEPT) TO '96 ROR            29.32%      21.11%         18.27%        1.00%         13.05%        18.35%
'95 TO '96 ERV                     2,832.09    3,573.74       1,762.92     1,709.46       1,393.14      1,403.45
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00           3.00          3.00
'95 TO '96 ERV LESS ADMIN CHG      2,829.09    3,570.74       1,759.92     1,706.46       1,390.14      1,400.45
96(OR INCEPT) TO '97 ROR            -12.64%      31.26%          5.71%        8.37%         30.15%        23.69%
96 TO '97 ERV                      2,471.54    4,686.90       1,860.45     1,849.27       1,809.27      1,732.19
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00           3.00          3.00
96 TO '97 ERV LESS ADMIN CHG       2,468.54    4,683.90       1,857.45     1,846.27       1,806.27      1,729.19
97(OR INCEPT) TO '98 ROR            -18.09%      26.89%         23.60%        7.78%         35.84%        -1.94%
97 TO '98 ERV                      2,022.07    5,943.61       2,295.80     1,989.92       2,453.71      1,695.57
ANNUAL ADMIN CHARGE                    3.00        3.00           3.00         3.00           3.00          3.00
97 TO '98 ERV LESS ADMIN CHG       2,019.07    5,940.61       2,292.80     1,986.92       2,450.71      1,692.57


ANNUALIZED ROR BEFORE LOAD            6.81%      17.24%          8.96%        7.36%         27.68%        15.42% W/OUT     154.60%

AMT SUBJ TO LOAD IF + RETURN         798.09      405.94         770.72       801.31         754.93        830.74
AMT SUBJ TO LOAD IF - RETURN       1,817.16    5,346.55       2,063.52     1,788.23       2,205.64      1,523.31
AMT SUBJ TO LOAD                     798.09      405.94         770.72       801.31         754.93        830.74
10TH (OR INCEPTION) SALE CHARGE       0.00%       0.00%          0.00%        0.00%          4.00%         4.00%
AMT OF LOAD                            0.00        0.00           0.00         0.00          30.20         33.23
ERV LESS LOAD                      2,019.07    5,940.61       2,292.80     1,986.92       2,420.51      1,659.34
- -----------------------------------------------------------------------------------------------------------------

ANN. RET W/LOAD AND ADM CHG           6.81%      17.24%          8.96%        7.36%         27.25%        14.80% WITH      153.55%

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


ANNUALIZED RATES OF RETURN                                                                                           Date: 13-Apr-99
10 YR RATE OF RETURN                                                                                                                

   VIP/QVIP                      MMKT        DIBOND       EQUITY       FLXMGD        CONS         EQINC        RPA         HIYLD    
- ------------------------------------------------------------------------------------------------------------------------------------

<S>                            <C>          <C>          <C>          <C>           <C>         <C>          <C>          <C>  
YEARS IN EXISTENCE                  10.00        10.00        10.00        10.00         10.00       10.00        10.00        10.00
                                 1,000.00     1,000.00     1,000.00     1,000.00      1,000.00    1,000.00     1,000.00     1,000.00
88 TO '89 ROR                       7.95%       12.14%       28.20%       20.33%        15.61%      21.21%        2.00%       -3.20%
88 TO '89 ERV                    1,079.52     1,121.41     1,281.97     1,203.30      1,156.05    1,212.12     1,020.05       967.95
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
88 TO '89 ERV LESS ADMIN CHG     1,076.52     1,118.41     1,278.96     1,200.30      1,153.05    1,209.12     1,017.05       964.95
89 (OR INCEPT) TO '90 ROR           6.87%        7.03%       -6.34%        0.69%         4.01%      -4.88%        4.38%      -12.89%
89 TO '90 ERV                    1,150.48     1,196.99     1,197.82     1,208.61      1,199.28    1,150.15     1,061.62       840.55
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
89 TO '90 ERV LESS ADMIN CHG     1,147.48     1,193.99     1,194.82     1,205.61      1,196.28    1,147.15     1,058.62       837.55
90 (OR INCEPT) TO '91 ROR           4.90%       15.05%       24.51%       23.94%        17.66%      26.00%       -0.55%       37.53%
90 TO '91 ERV                    1,203.75     1,373.74     1,487.72     1,494.26      1,407.54    1,445.35     1,052.76     1,151.86
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
90 TO '91 ERV LESS ADMIN CHG     1,200.75     1,370.74     1,484.72     1,491.26      1,404.54    1,442.35     1,049.76     1,148.86
91 (OR INCEPT) TO '92 ROR           2.55%        5.90%       12.81%        6.32%         5.67%       8.82%       -3.45%       16.14%
91 TO '92 ERV                    1,231.39     1,451.67     1,674.85     1,585.56      1,484.24    1,569.55     1,013.57     1,334.28
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
91 TO '92 ERV LESS ADMIN CHG     1,228.39     1,448.66     1,671.85     1,582.56      1,481.24    1,566.55     1,010.57     1,331.28
92 (OR INCEPT) TO '93 ROR           1.73%        8.83%       20.43%       14.21%        10.87%      20.84%        4.84%       17.85%
92 TO '93 ERV                    1,249.66     1,576.62     2,013.39     1,807.49      1,642.32    1,893.00     1,059.45     1,568.95
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
92 TO '93 ERV LESS ADMIN CHG     1,246.66     1,573.62     2,010.39     1,804.49      1,639.32    1,890.00     1,056.45     1,565.95
93 (OR INCEPT) TO '94 ROR           2.82%       -4.38%        1.56%       -4.31%        -2.14%       0.23%        7.11%       -3.88%
93 TO '94 ERV                    1,281.77     1,504.75     2,041.76     1,726.66      1,604.22    1,894.38     1,131.56     1,505.27
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
93 TO '94 ERV LESS ADMIN CHG     1,278.77     1,501.75     2,038.76     1,723.66      1,601.22    1,891.38     1,128.56     1,502.27
94 (OR INCEPT) TO '95 ROR           4.57%       19.31%       29.74%       22.66%        15.89%      20.26%        7.52%       16.17%
94 TO '95 ERV                    1,337.20     1,791.67     2,645.10     2,114.28      1,855.61    2,274.65     1,213.41     1,745.16
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
94 TO '95 ERV LESS ADMIN CHG     1,334.20     1,788.67     2,642.10     2,111.28      1,852.61    2,271.65     1,210.41     1,742.16
95 (OR INCEPT) TO '96 ROR           3.99%        3.15%       17.11%       12.29%        11.29%      20.29%        4.41%       10.06%
95 TO '96 ERV                    1,387.40     1,845.07     3,094.20     2,370.68      2,061.73    2,732.68     1,263.81     1,917.50
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
95 TO '96 ERV LESS ADMIN CHG     1,384.40     1,842.07     3,091.20     2,367.68      2,058.73    2,729.68     1,260.81     1,914.50
96 (OR INCEPT) TO '97 ROR           4.17%        7.28%       23.18%       16.56%        12.10%      34.99%        9.97%       12.44%
96 TO '97 ERV                    1,442.11     1,976.20     3,807.75     2,759.84      2,307.89    3,684.74     1,386.45     2,152.66
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
96 TO '97 ERV LESS ADMIN CHG     1,439.11     1,973.20     3,804.75     2,756.84      2,304.89    3,681.74     1,383.45     2,149.66
97 (OR INCEPT) TO '98 ROR           4.14%        5.89%        8.04%        8.91%        10.40%      -3.54%        8.09%       -3.52%
97 TO '98 ERV                    1,498.72     2,089.42     4,110.72     3,002.61      2,544.59    3,551.26     1,495.37     2,073.96
ANNUAL ADMIN CHARGE                  3.00         3.00         3.00         3.00          3.00        3.00         3.00         3.00
97 TO '98 ERV LESS ADMIN CHG     1,495.72     2,086.42     4,107.72     2,999.61      2,541.59    3,548.26     1,492.37     2,070.96


ANNUALIZED ROR BEFORE LOAD          4.11%        7.63%       15.18%       11.61%         9.78%      13.50%        4.08%        7.55%

AMT SUBJ TO LOAD IF + RETURN       850.43       791.36       589.23       700.04        745.84      645.17       850.76       792.90
AMT SUBJ TO LOAD IF - RETURN     1,346.15     1,877.78     3,696.95     2,699.65      2,287.43    3,193.44     1,343.13     1,863.86
AMT SUBJ TO LOAD                   850.43       791.36       589.23       700.04        745.84      645.17       850.76       792.90
10TH (OR INCEPTION) SALE CHARGE     0.00%        0.00%        0.00%        0.00%         0.00%       0.00%        0.00%        0.00%
AMT OF LOAD                          0.00         0.00         0.00         0.00          0.00        0.00         0.00         0.00
ERV LESS LOAD                    1,495.72     2,086.42     4,107.72     2,999.61      2,541.59    3,548.26     1,492.37     2,070.96
- ------------------------------------------------------------------------------------------------------------------------------------

ANN.10YR RET W/LOAD AND ADM CHG     4.11%        7.63%       15.18%       11.61%         9.78%      13.50%        4.08%        7.55%
AMT SUBJ TO LOAD IF + RETURN      850.43       791.36       589.23       700.04        745.84      645.17       650.76       792.90
AMT SUBJ TO LOAD IF - RETURN    1,346.15     1,877.78     3,695.95     2,699.65      2,287.43    3,193.44     1,343.13     1,663.86


<CAPTION>
   VIP/QVIP                      NATR          STIX         GLOBAL        GVTINC        PRUJEN         SMCAP
- ------------------------------------------------------------------------------------------------------------------------------

<S>                             <C>         <C>             <C>          <C>            <C>           <C> 
YEARS IN EXISTENCE                    10.00       10.00           9.67         9.67           3.67          3.67
                                   1,000.00    1,000.00      N/A           N/A           N/A            N/A
88 TO '89 ROR                        34.03%      29.38%      N/A           N/A           N/A            N/A
88 TO '89 ERV                      1,340.30    1,293.81      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
88 TO '89 ERV LESS ADMIN CHG       1,337.30    1,290.80      N/A           N/A           N/A            N/A
89 (OR INCEPT) TO '90 ROR            -6.88%      -4.78%      N/A           N/A           N/A            N/A
89 TO '90 ERV                      1,245.27    1,229.05      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
89 TO '90 ERV LESS ADMIN CHG       1,242.27    1,226.05      N/A           N/A           N/A            N/A
90 (OR INCEPT) TO '91 ROR             8.99%      28.18%      N/A           N/A           N/A            N/A
90 TO '91 ERV                      1,353.94    1,571.58      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
90 TO '91 ERV LESS ADMIN CHG       1,350.94    1,568.58      N/A           N/A           N/A            N/A
91 (OR INCEPT) TO '92 ROR             6.03%       5.85%      N/A           N/A           N/A            N/A
91 TO '92 ERV                      1,432.34    1,660.40      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
91 TO '92 ERV LESS ADMIN CHG       1,429.34    1,657.40      N/A           N/A           N/A            N/A
92 (OR INCEPT) TO '93 ROR            23.67%       8.37%      N/A           N/A           N/A            N/A
92 TO '93 ERV                      1,767.70    1,796.05      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
92 TO '93 ERV LESS ADMIN CHG       1,764.70    1,793.05      N/A           N/A           N/A            N/A
93 (OR INCEPT) TO '94 ROR            -5.43%      -0.19%      N/A           N/A           N/A            N/A
93 TO '94 ERV                      1,668.85    1,789.64      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
93 TO '94 ERV LESS ADMIN CHG       1,665.85    1,786.64      N/A           N/A           N/A            N/A
94 (OR INCEPT) TO '95 ROR            25.42%      35.45%      N/A           N/A           N/A            N/A
94 TO '95 ERV                      2,089.31    2,419.95      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
94 TO '95 ERV LESS ADMIN CHG       2,086.31    2,416.95      N/A           N/A           N/A            N/A
95 (OR INCEPT) TO '96 ROR            29.32%      21.11%      N/A           N/A           N/A            N/A
95 TO '96 ERV                      2,697.96    2,927.16      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
95 TO '96 ERV LESS ADMIN CHG       2,694.96    2,924.16      N/A           N/A           N/A            N/A
96 (OR INCEPT) TO '97 ROR           -12.64%      31.26%      N/A           N/A           N/A            N/A
96 TO '97 ERV                      2,354.36    3,838.20      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
96 TO '97 ERV LESS ADMIN CHG       2,351.36    3,835.20      N/A           N/A           N/A            N/A
97 (OR INCEPT) TO '98 ROR           -18.09%      26.89%      N/A           N/A           N/A            N/A
97 TO '98 ERV                      1,926.09    4,866.66      N/A           N/A           N/A            N/A
ANNUAL ADMIN CHARGE                    3.00        3.00      N/A           N/A           N/A            N/A
97 TO '98 ERV LESS ADMIN CHG       1,923.09    4,863.66      N/A           N/A           N/A            N/A


ANNUALIZED ROR BEFORE LOAD            6.76%      17.14%      N/A           N/A           N/A            N/A      W/OUT       97.34%

AMT SUBJ TO LOAD IF + RETURN         807.69      513.63      N/A           N/A           N/A            N/A
AMT SUBJ TO LOAD IF - RETURN       1,730.78    4,377.29      N/A           N/A           N/A            N/A
AMT SUBJ TO LOAD                     807.69      513.63      N/A           N/A           N/A            N/A
10TH (OR INCEPTION) SALE CHARGE       0.00%       0.00%      N/A           N/A           N/A            N/A
AMT OF LOAD                            0.00        0.00      N/A           N/A           N/A            N/A
ERV LESS LOAD                      1,923.09    4,863.66      N/A           N/A           N/A            N/A
- -----------------------------------------------------------------------------------------------------------------

ANN.10YR RET W/LOAD AND ADM CHG       6.76%      17.14%      N/A           N/A           N/A            N/A      WITH        97.34%
AMT SUBJ TO LOAD IF + RETURN        807.69      513.63       N/A           N/A           N/A            N/A
AMT SUBJ TO LOAD IF - RETURN      1,730.78    4,377.29       N/A           N/A           N/A            N/A
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

ANNUALIZED RATES OF RETURN      QUARTER =======> 4                                                                         13-Apr-99
AVG POLICY SIZE 1000            30/9999*1000 = $3.00 ANNUAL CHG                     Quarter Charge  3.00000

   VIP/QVIP                         MMKT       DIBOND       EQUITY       FLXMGD       CONS         EQINC        RPA        HIYLD    
- ------------------------------------------------------------------------------------------------------------------------------------


<S>                                <C>         <C>          <C>          <C>         <C>          <C>          <C>         <C>  
YTD % OF RETURN                        4.14%       5.89%        8.04%        8.91%       10.40%      -3.54%        8.09%      -3.52%
ERV(ENDING REDEEMABLE VALUE)         1041.42     1058.90      1080.42      1089.15      1104.00      964.56      1080.89      964.78
ANNUAL ADMIN CHARGE                     3.00        3.00         3.00         3.00         3.00        3.00         3.00        3.00
ERV LESS ADMIN CHARGE                1038.42     1055.90      1077.42      1086.15      1101.00      961.56      1077.89      961.78
ROR BEFORE LOAD                        3.84%       5.59%        7.74%        8.61%       10.10%      -3.84%        7.79%      -3.82%

AMT SUBJ TO LOAD IF + RETURN          896.16      894.41       892.26       891.39       889.90      903.84       892.21      903.82
AMT SUBJ TO LOAD IF - RETURN          934.58      950.31       969.68       977.53       990.90      865.40       970.10      865.61
AMT SUBJ TO LOAD                      896.16      894.41       892.26       891.39       889.90      865.40       892.21      865.61
1ST YEAR SALE CHARGE                   7.00%       7.00%        7.00%        7.00%        7.00%       7.00%        7.00%       7.00%
AMT OF LOAD                            62.73       62.61        62.46        62.40        62.29       60.58        62.45       60.59
ERV LESS ADMIN CHG & LOAD             975.69      993.29      1014.96      1023.75      1038.70      900.98      1015.44      901.19
- ------------------------------------------------------------------------------------------------------------------------------------

RETURN W/SALES LOAD AND ADM CHG       -2.43%      -0.67%        1.50%        2.38%        3.87%      -9.90%        1.54%      -9.88%

<CAPTION>
   VIP/QVIP                         NATR          STIX         GLOBAL        GVTINC        PRUJEN         SMCAP
- ---------------------------------------------------------------------------------------------------------------------------------


<S>                                   <C>         <C>            <C>           <C>           <C>            <C>       <C>
YTD % OF RETURN                        -18.09%      26.89%         23.60%        7.78%         35.84%        -1.94%
ERV(ENDING REDEEMABLE VALUE)            819.14     1268.94        1236.00      1077.81        1358.44        980.56
ANNUAL ADMIN CHARGE                       3.00        3.00           3.00         3.00           3.00          3.00
ERV LESS ADMIN CHARGE                   816.14     1265.94        1233.00      1074.81        1355.44        977.56
ROR BEFORE LOAD                        -18.39%      26.59%         23.30%        7.48%         35.54%        -2.24%    108.30% W/OUT

AMT SUBJ TO LOAD IF + RETURN            918.39      873.41         876.70       892.52         864.46        902.24
AMT SUBJ TO LOAD IF - RETURN            734.52     1139.35        1109.70       967.33        1219.89        879.80
AMT SUBJ TO LOAD                        734.52      873.41         876.70       892.52         864.46        879.80
1ST YEAR SALE CHARGE                     7.00%       7.00%          7.00%        7.00%          7.00%         7.00%
AMT OF LOAD                              51.42       61.14          61.37        62.48          60.51         61.59
ERV LESS ADMIN CHG & LOAD               764.72     1204.81        1171.63      1012.33        1294.92        915.97
- --------------------------------------------------------------------------------------------------------------------

RETURN W/SALES LOAD AND ADM CHG        -23.53%      20.48%         17.16%        1.23%         29.49%        -8.40%      22.84% WITH


</TABLE>


<TABLE>
<CAPTION>




ANNUALIZED RATES OF RETURN                                                                                           Date: 13-Apr-99
AVG POLICY SIZE 1000            30/9999*1000 = $3.00 ANNUAL CHG

   VIP/QVIP                         MMKT       DIBOND       EQUITY       FLXMGD       CONS         EQINC        RPA        HIYLD    
- ------------------------------------------------------------------------------------------------------------------------------------


<S>                                <C>         <C>          <C>          <C>         <C>          <C>          <C>         <C>  
1 YEAR % OF RETURN                     4.14%       5.89%        8.04%        8.91%       10.40%      -3.54%        8.09%      -3.52%
ERV(ENDING REDEEMABLE VALUE)         1041.42     1058.90      1080.42      1089.15      1104.00      964.56      1080.89      964.78
ANNUAL ADMIN CHARGE                     3.00        3.00         3.00         3.00         3.00        3.00         3.00        3.00
ERV LESS ADMIN CHARGE                1038.42     1055.90      1077.42      1086.15      1101.00      961.56      1077.89      961.78
ROR BEFORE LOAD                        3.84%       5.59%        7.74%        8.61%       10.10%      -3.84%        7.79%      -3.82%

AMT SUBJ TO LOAD IF + RETURN          896.16      894.41       892.26       891.39       889.90      903.84       892.21      903.82
AMT SUBJ TO LOAD IF - RETURN          934.58      950.31       969.68       977.53       990.90      865.40       970.10      865.61
AMT SUBJ TO LOAD                      896.16      894.41       892.26       891.39       889.90      865.40       892.21      865.61
1ST YEAR SALE CHARGE                   7.00%       7.00%        7.00%        7.00%        7.00%       7.00%        7.00%       7.00%
AMT OF LOAD                            62.73       62.61        62.46        62.40        62.29       60.58        62.45       60.59
ERV LESS ADMIN CHG & LOAD             975.69      993.29      1014.96      1023.75      1038.70      900.98      1015.44      901.19
- ------------------------------------------------------------------------------------------------------------------------------------

RETURN W/SALES LOAD AND ADM CHG       -2.43%      -0.67%        1.50%        2.38%        3.87%      -9.90%        1.54%      -9.88%

<CAPTION>

   VIP/QVIP                        NATR          STIX         GLOBAL        GVTINC        PRUJEN         SMCAP
- --------------------------------------------------------------------------------------------------------------------------------


<C>                                  <C>         <C>            <C>           <C>           <C>            <C>      <C>
1 YEAR % OF RETURN                    -18.09%      26.89%         23.60%        7.78%         35.84%        -1.94%
ERV(ENDING REDEEMABLE VALUE)           819.14     1268.94        1236.00      1077.81        1358.44        980.56
ANNUAL ADMIN CHARGE                      3.00        3.00           3.00         3.00           3.00          3.00
ERV LESS ADMIN CHARGE                  816.14     1265.94        1233.00      1074.81        1355.44        977.56
ROR BEFORE LOAD                       -18.39%      26.59%         23.30%        7.48%         35.54%        -2.24%     108.30% W/OUT

AMT SUBJ TO LOAD IF + RETURN           918.39      873.41         876.70       892.52         864.46        902.24
AMT SUBJ TO LOAD IF - RETURN           734.52     1139.35        1109.70       967.33        1219.89        879.80
AMT SUBJ TO LOAD                       734.52      873.41         876.70       892.52         864.46        879.80
1ST YEAR SALE CHARGE                    7.00%       7.00%          7.00%        7.00%          7.00%         7.00%
AMT OF LOAD                             51.42       61.14          61.37        62.48          60.51         61.59
ERV LESS ADMIN CHG & LOAD              764.72     1204.81        1171.63      1012.33        1294.92        915.97
- -------------------------------------------------------------------------------------------------------------------

RETURN W/SALES LOAD AND ADM CHG       -23.53%      20.48%         17.16%        1.23%         29.49%        -8.40%       22.84% WITH
</TABLE>



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