FIRST INVESTORS LIFE LEVEL PREMIUM VARIABLE LIFE INSURANCE, 497, 1995-10-30

FIRST INVESTORS LIFE LEVEL PREMIUM VARIABLE LIFE INSURANCE
497, 1995-10-30

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FIRST INVESTORS LIFE
LEVEL PREMIUM
VARIABLE LIFE
INSURANCE POLICIES
- ---------------------------

Prospectus
- ----------------------------
May 1, 1995

[LOGO] First Investors

<PAGE>

LEVEL PREMIUM VARIABLE LIFE INSURANCE POLICIES

ISSUED BY
FIRST INVESTORS LIFE INSURANCE COMPANY

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

INVESTORS ARE ADVISED TO READ AND RETAIN THIS PROSPECTUS FOR FUTURE
REFERENCE.

This Prospectus describes the Level Premium Variable Life Insurance Policy
(the "Policy") offered by First Investors Life Insurance Company ("First
Investors Life"). The purpose of the Policy is to provide life insurance
coverage and to lessen the economic loss resulting from the death of the
Insured.

Policy premiums net of certain expenses ("net annual premiums") are paid
into a unit investment trust, First Investors Life Insurance Company Separate
Account B ("Separate Account B"). A Policyowner elects to have his or her net
annual premiums paid into one or more of the nine subaccounts of Separate
Account B ("Subaccounts"). Target Maturity 2007 Series is not offered to
Policyowners of Separate Account B. The assets of each Subaccount are invested
at net asset value in shares of a related series of First Investors Life Series
Fund (the "Fund"), an open-end diversified management investment company.

The Policy is like a limited payment life insurance policy with a death
benefit, level premiums, loan privileges and other features that are usually
associated with a limited payment insurance policy. Unlike the usual life
insurance policy, the Policy is "variable" because the amount of the insurance
coverage and the cash values may increase or decrease depending on the
investment performance of the chosen Subaccount or Subaccounts of Separate
Account B.

The death benefit during the first Policy year will be the face amount
shown on the Policy (the "Guaranteed Insurance Amount"). On each Policy
anniversary, the amount of coverage may increase or decrease depending on the
investment results of the designated Subaccount or Subaccounts, but it will
never be less than the Guaranteed Insurance Amount as long as there is no
outstanding Policy loan and premiums are paid when due.

The cash value of the Policy will vary from day to day, depending on the
investment results of the designated Subaccount or Subaccounts, but with no
guaranteed minimum. The Policyowner bears the entire investment risk and the
Policy's cash value (not the death benefit) could decline to zero.

Replacing existing insurance with the Policy described in this Prospectus
may not be to your advantage in light of the higher cost of the Policy during
the first few years.

This Prospectus sets forth the information about Separate Account B that a
prospective investor should know before investing and should be kept for future
reference.

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

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUS FOR FIRST INVESTORS LIFE SERIES FUND.

The date of this Prospectus is May 1, 1995

<PAGE>

THE PURPOSE OF THE POLICY IS TO PROVIDE LIFE INSURANCE PROTECTION FOR THE
BENEFICIARY NAMED IN THE POLICY. NO CLAIM IS MADE THAT THE POLICY IS IN ANY WAY
SIMILAR OR COMPARABLE TO A SYSTEMATIC INVESTMENT PLAN OF A MUTUAL FUND.

GENERAL DESCRIPTION

FIRST INVESTORS LIFE INSURANCE COMPANY

First Investors Life Insurance Company (TIN 13-1968606), 95 Wall Street,
New York, New York 10005 ("First Investors Life"), a stock life insurance
company incorporated under the laws of the State of New York in 1962, writes
life insurance, annuities and accident and health insurance. First Investors
Life is also the Sponsor of First Investors Life Variable Annuity Fund A and
First Investors Life Variable Annuity Fund C. First Investors Consolidated
Corporation ("FICC") owns all of the voting common stock of First Investors
Management Company, Inc. ("FIMCO" or "Adviser") and all of the outstanding stock
of First Investors Corporation ("FIC" or "Underwriter") and the Transfer Agent.
Mr. Glenn O. Head (and members of his family) and Mrs. Julie W. Grayson (as
executrix of the estate of her deceased husband, David D. Grayson) are
controlling persons of FICC and, therefore, jointly control the Adviser.

First Investors Life assumes all of the insurance risks under the Policy
and its assets support the Policy's benefits. At December 31, 1994, First
Investors Life had assets of over $393 million and over $2.939 billion of life
insurance in force. (See First Investors Life's financial statements under
"Financial Statements.")

SEPARATE ACCOUNT B

First Investors Life Insurance Company Separate Account B, also known by
its proprietary name, "Insured Series Plan" ("Separate Account B"), was
established on June 4, 1985 under the provisions of the New York Insurance Law.
Separate Account B is a separate investment account to which assets are
allocated to support the benefits under the Level Premium Variable Life
Insurance Policy (the "Policy") offered by First Investors Life. Separate
Account B is registered as a unit investment trust under the Investment Company
Act of 1940, as amended (the "1940 Act"), but such registration does not involve
any supervision of the management or investment practices or policies of
Separate Account B.

The assets of each subaccount of Separate Account B (the "Subaccount") are
invested at net asset value in shares of the corresponding Series (the "Series")
of First Investors Life Series Fund (the "Fund"). For example, the Blue Chip
Subaccount invests in the Blue Chip Series, the Government Subaccount invests in
the Government Series, and so on. The Fund's Prospectus describes the risks
attendant to an investment in each Series of the Fund.

Any and all distributions received from a Series will be reinvested to
purchase additional shares of the distributing Series at net asset value for the
corresponding Subaccount. Accordingly, no capital distributions are anticipated.
Deductions and redemptions from any Subaccount of Separate Account B may be
effected by redeeming the number of applicable Series shares, at net asset
value, necessary to satisfy the amount to be deducted or redeemed. Shares of the
Series in the Subaccounts will be valued at their net asset value.

Separate Account B is divided into the following Subaccounts, each of which
corresponds to the following Series of the Fund:

<PAGE>

SEPARATE ACCOUNT FUND
B SUBACCOUNT SERIES
-------------------- ----------------

Blue Chip Subaccount Blue Chip Series
Cash Management Subaccount Cash Management Series
Discovery Subaccount Discovery Series
Government Subaccount Government Series
Growth Subaccount Growth Series
High Yield Subaccount High Yield Series
International Securities Subaccount International Securities Series
Investment Grade Subaccount Investment Grade Series
Utilities Income Subaccount Utilities Income Series

The assets of Separate Account B are the property of First Investors Life.
Each Policy provides that the portion of the assets of Separate Account B equal
to the reserves and other liabilities under the Policy with respect to Separate
Account B shall not be chargeable with liabilities arising out of any other
business that First Investors Life may conduct. In addition to the net assets
and other liabilities for the Policies, the assets of Separate Account B include
amounts derived from expenses charged to Separate Account B by First Investors
Life (see "Charges and Expenses"). From time to time these additional amounts
will be transferred in cash by First Investors Life to its General Account.
Before making a transfer, First Investors Life will consider any possible
adverse impact that the transfer may have on Separate Account B.

First Investors Life reserves the right to invest the assets of Separate
Account B in the shares of other investment companies or any other investment
permitted by law. Such substitution would be made in accordance with the
provisions of the 1940 Act.

YOUR CHOICE OF INVESTMENT OBJECTIVE

When a Policy is purchased, the Policyowner decides to place the net annual
premium (premium less certain deductions) into at least one but not more than
five of the Subaccounts of Separate Account B to support the Policy's benefits,
provided the allocation to any one Subaccount is not less than 10% of the net
premium. The allocation is made on the Policy's first day and at the beginning
of each Policy year thereafter. A portion of the allocated amount covers the
cost of insurance protection. That Subaccount in turn invests in the
corresponding Series of the Fund, as set forth above. Twice a year, at any time
during the Policy year, the Policyowner may transfer all or part of the cash
value from one Subaccount to another provided the cash value is not allocated to
more than five of the Subaccounts, and provided the allocation to any one
Subaccount is not less than 10% of the cash value. Each Subaccount corresponds
to a Series of the Fund. The investment objectives of each Series of the Fund
which are offered to Policyowners of Separate Account B are set forth below. See
"The Fund." There is no assurance that the investment objective of any Series of
the Fund will be realized. Because each Series of the Fund is intended to serve
a different investment objective, each is subject to varying degrees of
financial and market risks. When deciding which Subaccount to utilize, a
Policyowner should consider that the Policy's investment return will affect the
death benefit, the cash value and the loan value of the Policy.

<PAGE>

As an example, using the policies illustrated on pages 19 through 21, First
Investors Life would allocate to the selected Subaccount(s) the following
amounts for each Policy year:

MALE ISSUE MALE ISSUE MALE ISSUE
AGE 10 AGE 25 AGE 40
BEGINNING $600 ANNUAL $1,200 ANNUAL $1,800 ANNUAL
OF POLICY PREMIUM FOR PREMIUM FOR PREMIUM FOR
YEAR STANDARD RISK STANDARD RISK STANDARD RISK
--------- ------------- ------------- -------------
1st................. $170.81 $ 508.46 $ 927.23
2nd-4th............. 489.00 1,008.00 1,527.00
5th and later....... 513.00 1,056.00 1,599.00

THE FUND

First Investors Life Series Fund is a diversified open-end management
investment company registered under the 1940 Act. The Fund consists of ten
separate Series, nine of which are offered to Policyowners of Separate Account
B. Target Maturity 2007 Series, a series of the Fund, is not offered to
Policyowners of Separate Account B. The shares of the Series are not sold
directly to the general public but are available only through the purchase of an
annuity contract or a variable life insurance policy issued by First Investors
Life.

The investment objectives of each Series of the Fund which are offered to
Policyowners of Separate Account B are as follows:

BLUE CHIP SERIES. The investment objective of Blue Chip Series is to seek
high total investment return consistent with the preservation of capital. This
goal will be sought by investing, under normal market conditions, primarily in
equity securities of larger, well-capitalized companies with high potential
earnings growth that have shown a history of dividend payments, commonly known
as "Blue Chip" companies.

CASH MANAGEMENT SERIES. The objective of Cash Management Series is to seek
to earn a high rate of current income consistent with the preservation of
capital and maintenance of liquidity. The Cash Management Series will invest in
money market obligations, including high quality securities issued or guaranteed
by the U.S. Government or its agencies and instrumentalities, bank obligations
and high grade corporate instruments. An investment in the Series is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the Series will be able to maintain a stable net asset value of $1.00 per share.

DISCOVERY SERIES. The investment objective of Discovery Series is to seek
long-term capital appreciation, without regard to dividend or interest income,
through investment in the common stock of companies with small to medium market
capitalization that the Adviser considers to be undervalued or less well known
in the current marketplace and to have the potential for capital growth.

GOVERNMENT SERIES. The investment objective of Government Series is to seek
to achieve a significant level of current income which is consistent with
security and liquidity of principal by investing, under normal market
conditions, primarily in obligations issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities ("U.S.
Government Obligations"), including mortgage-related securities.

<PAGE>

GROWTH SERIES. The investment objective of Growth Series is to seek
long-term capital appreciation. This goal will be sought by investing, under
normal market conditions, primarily in common stocks of companies and industries
selected for their growth potential.

HIGH YIELD SERIES. The primary objective of the High Yield Series is to
seek to earn a high level of current income. Consistent with that objective, the
Series will also seek growth of capital as a secondary objective. The High Yield
Series seeks to attain its objectives primarily through investments in
lower-grade, high-yielding, high risk debt securities. Investments in high
yield, high risk securities, commonly referred to as "junk bonds," may entail
risks that are different or more pronounced than those involved in higher-rated
securities. See "High Yield Securities--Risk Factors" in the Fund's Prospectus.

INTERNATIONAL SECURITIES SERIES. The primary objective of International
Securities Series is to seek long-term capital growth. As a secondary objective,
the Series seeks to earn a reasonable level of current income. These objectives
are sought, under normal market conditions, through investment in common stocks,
rights and warrants, preferred stocks, bonds and other debt obligations issued
by companies or governments of any nation, subject to certain restrictions with
respect to concentration and diversification.

INVESTMENT GRADE SERIES. The investment objective of the Investment Grade
Series is to seek a maximum level of income consistent with investment in
investment grade debt securities.

UTILITIES INCOME SERIES. The primary objective of the Utilities Income
Series is to seek high current income. Long-term capital appreciation is a
secondary objective. These objectives are sought, under normal market
conditions, through investment in equity and debt securities issued by companies
primarily engaged in the public utilities industry.

No offer will be made of a Policy funded by the underlying Fund unless a
current Fund Prospectus has been delivered.

For more complete information about each of the Series underlying Separate
Account B, including management fees and other expenses, see the Fund's
Prospectus. The Prospectus details each Series' investment goals, management
strategies, investment restrictions, portfolio turnover, and the inherent market
and financial risks of an investment in the Series' shares. It is important to
read the Prospectus carefully before you decide to invest. Additional copies of
the Fund's Prospectus, which is attached hereto, may be obtained by writing to
First Investors Life Insurance Company, 95 Wall Street, New York, New York 10005
or by calling (212) 858-8200. There can be no assurance that any of the
objectives of the Series will be achieved.

CHANGES IN FUND INVESTMENT POLICIES AND RESTRICTIONS

The investment policies and restrictions of the Series are set forth above
and within the Fund's Prospectus. Fundamental policies of a Series may not be
changed without the approval of a majority vote of Policyowners investing in the
Subaccount which invests in that Series in accordance with the 1940 Act (see
"Voting Rights"). Changes in the investment policies or the adoption of new
investment policies may be made without such approval when required by state
insurance regulatory authorities. The investment policies may not be changed if
such change is disapproved by First Investors Life although any such disapproval
may not be unreasonable. Such a change would be disapproved only if it violated
state law or was prohibited by state regulatory authorities or if First
Investors Life determined that the change would have an adverse effect on its
general account because it would result in unsound or overly speculative
investments. If First Investors Life disapproves a change, a summary of the

<PAGE>

change and the reasons for disapproval will be set forth in the Proxy Statement
for the Fund's next Special Meeting of Shareholders.

ADVISER

First Investors Management Company, Inc., 95 Wall Street, New York, NY
10005, a New York corporation, supervises and manages each Series' investments,
supervises all aspects of each Series operations and, except for INTERNATIONAL
SECURITIES SERIES and GROWTH SERIES, determines each Series' portfolio
transactions. The Adviser serves as such under an advisory agreement dated June
13, 1994, which was approved, with respect to each Series, by the Fund's Board
of Trustees and by the shareholders of each Series. See the Fund's Prospectus
for the amount of advisory fees paid by each Series for the fiscal year ended
December 31, 1994.

SUBADVISER

Wellington Management Company, 75 State Street, Boston, MA 02109 ("WMC" or
"Subadviser"), has been retained by the Adviser and the Fund on behalf of
INTERNATIONAL SECURITIES SERIES and GROWTH SERIES as each of those Series'
investment subadviser. The Subadviser serves as such under a subadvisory
agreement dated June 13, 1994 which was approved by the Fund's Board of Trustees
and by the shareholders of the INTERNATIONAL SECURITIES SERIES and GROWTH
SERIES. The Adviser has delegated discretionary trading authority to WMC with
respect to all the assets of INTERNATIONAL SECURITIES SERIES and GROWTH SERIES,
subject to the continuing oversight and supervision of the Adviser and the Board
of Trustees. As compensation for its services, WMC is paid by the Adviser, and
not by either Series, a fee which is computed daily and paid monthly.

UNDERWRITER

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

CHARGES AND EXPENSES

First Investors Life guarantees that it will not increase the amount of
premiums, charges deducted from premiums and the charges to the Subaccount(s)
for mortality and expense risks.

CHARGES DEDUCTED FROM PREMIUMS

AMOUNT ALLOCATED TO SELECTED SUBACCOUNT. The amount allocated to the
selected Subaccount(s) for a standard mortality risk Policy is the annual
premium you pay less the premiums for any optional insurance benefits and less
the charges listed below, which are allocated to First Investors Life's General
Account.

ANNUAL CHARGE. A $30 charge, which will be made in each Policy year, is for
annual administrative expenses, including premium billing and collection,
recordkeeping, processing death benefit claims, cash surrenders and Policy
changes, reporting and other communications to Policyowners. This charge has
been set at a level that will recover no more than the actual costs associated
with administering the Policy.

<PAGE>

ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE. A charge in the first Policy
year at the rate of $5 per $1,000 of initial face amount of insurance or a pro
rata portion thereof, is made to cover administrative expenses in connection
with the issuance of the Policy. Such expenses include medical examinations,
insurance underwriting costs, and costs incurred in processing applications and
establishing permanent Policy records. This charge has been set at a level that
will recover no more than the actual costs associated with administering the
Policy.

SALES LOAD. A charge, which is deemed to be a "sales load" as defined in
the 1940 Act, not to exceed the following percentages of the annual premium,
will be charged as follows:

YEARS MAXIMUM PERCENTAGES
----- -------------------

1 ............................. 30%
2-4 ........................... 10%
5 and thereafter .............. 6%

The amount of the "sales load" in any Policy year is not specifically
related to sales expenses for that year. First Investors Life expects to recover
its distribution costs solely from sales charges over the life of the Policy.

STATE PREMIUM TAX CHARGE. This charge is 2% of the annual premium. Premium
taxes vary from state to state and the 2% rate is the average rate expected to
be paid on premiums received in all states over the lifetime of the Insured
covered by the Policy.

RISK CHARGE. This is a maximum 1.5% charge of the annual premium, to cover
the contingency that the Insured would die at a time when the guaranteed minimum
death benefit exceeds the death benefit which would have been payable in the
absence of the guaranteed minimum death benefit.

OTHER CHARGES. The extra premium charged for sub-standard life insurance
risk and the charge for premiums not paid on an annual basis is deducted from
the gross premium upon receipt.

For the fiscal year ended December 31, 1994, First Investors Life received
$5,950,000 in sales charges and $350,000 in administrative fees.

EXPENSES CHARGED TO SEPARATE ACCOUNT B

CHARGE FOR MORTALITY AND EXPENSE RISKS. First Investors Life makes a daily
charge to each Subaccount for mortality and expense risks assumed by First
Investors Life. The charge is computed at an effective annual rate of .50% of
the value of the Subaccount's assets attributable to the Policies.

The mortality risk assumed is that the Insured may live for a shorter
period of time than estimated and, therefore, a greater amount of death benefits
than expected will be payable in relation to the amount of the premiums
received. The expense risk assumed is that expenses incurred in issuing and
administering the Policies will be greater than estimated. First Investors Life
will realize a gain from this charge to the extent it is not needed to provide
for benefits and expenses under the Policies.

COST OF INSURANCE. After the net annual premium is placed into Separate
Account B, a charge is made for the cost of insurance protection (see "Cost of
Insurance Protection").

CHARGES FOR INCOME TAXES. First Investors Life currently does not charge
Separate Account B for its corporate Federal income taxes that may be
attributable to Separate Account B. However, First Investors Life may make such

<PAGE>

a charge in the future. Charges for other applicable taxes attributable to
Separate Account B may also be made (see "Charges for First Investors Life's
Income Taxes").

EXPENSES CHARGED TO THE FUND

BROKERAGE CHARGES. The Series bear the cost of brokerage commissions,
transfer taxes and other fees related to securities transactions. See the Fund's
Statement of Additional Information for the amount of brokerage commissions paid
by the Series for the fiscal year ended December 31, 1994, all of which were
paid to unaffiliated dealers.

OTHER CHARGES. Each Subaccount purchases shares of the corresponding Series
at net asset value. The net asset value of those shares reflects management fees
and expenses already deducted from the assets of the Series. Those fees and
expenses are described in detail in the Fund's Prospectus.

THE VARIABLE LIFE POLICY
GENERAL

The following discussion summarizes important provisions of the Policy
offered by this Prospectus. Appendix I to this Prospectus contains summaries of
other provisions. These discussions assume that premiums have been duly paid and
there have been no Policy loans. The death benefit and cash value are affected
if premiums are not duly paid or if a Policy loan is made. For information about
a default in premium payment, see "Premiums-Default and Options on Lapse." For
loan information, see "Loan Provisions." Policy years and anniversaries will be
measured from the Date of Issue, and each Policy year will commence on the
anniversary of the Date of Issue.

DEATH BENEFIT

The death benefit is the amount paid to the beneficiary at the death of the
Insured. It will be the sum of the Guaranteed Insurance Amount (face amount of
the Policy) plus, if positive, the variable insurance amount for each selected
Subaccount as described below. The benefit will be increased to reflect any
insurance on the life of the Insured added by rider and any premium paid which
applies to a period of time beyond the Policy month in which the Insured dies.
It will be reduced by any Policy loan and loan interest and any unpaid premium
which applies to a period prior to and including the Policy month in which the
Insured dies.

Generally, payment is made within seven days after all claim requirements
are received by First Investors Life at its Home Office. Interest is paid on
death proceeds from the date of death until payment is made at the annual rate
First Investors Life is paying under the payment option when proceeds are left
on deposit with First Investors Life, or at a higher rate if required by law.

THE GUARANTEED MINIMUM. The death benefit is guaranteed never to be less
than the Policy's face amount. The Policy's face amount is constant throughout
the life of the Policy. During the first Policy year, the death benefit is equal
to the Guaranteed Insurance Amount. Thereafter, the death benefit is determined
on each Policy anniversary, and it remains level during the following Policy
year. The death benefit payable, therefore, depends on the Policy year in which
the Insured dies.

THE VARIABLE INSURANCE AMOUNT. The death benefit is made up of two parts:
the Guaranteed Insurance Amount and, if positive, the variable insurance amount
for each selected Subaccount. The variable insurance amount reflects the

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investment results of the selected Subaccount(s). During the first Policy year,
the death benefit is the Guaranteed Insurance Amount because the variable
insurance amount is zero. On the first Policy anniversary, and on each
anniversary thereafter, the investment results for the preceding Policy year are
ascertained. If the net investment return ("Net Investment Return") for each
selected Subaccount is 4%, then the variable insurance amount does not change.

If the Net Investment Return for each selected Subaccount for the preceding
Policy year is greater than 4%, the variable insurance amount increases. If the
Net Investment Return is less than 4%, the variable insurance amount decreases
(but the death benefit never goes below the Guaranteed Insurance Amount). The
variable insurance amount is set on each Policy anniversary and remains at that
amount until the next Policy anniversary. The percentage change in the death
benefit is not the same as the Net Investment Return.

The change in the variable insurance amount on a Policy anniversary equals
the amount of insurance purchased under a Policy or the amount of insurance
coverage cancelled under a Policy which results from positive or negative
investment return, respectively. To calculate the change in the variable
insurance amount, First Investors Life uses a net single premium per $1 of
paid-up whole life insurance based on the Insured's age at the anniversary.
Thus, if the investment return for a male age 25 is $100, positive or negative,
the variable insurance amount will increase or decrease by $542 (see net single
premium amounts on next page).

For example, using the policy illustration for a male issue age 25 on Page
20, and assuming the 8% hypothetical gross annual investment return (equivalent
to a Net Investment Return of approximately 6.55%), the change in the variable
insurance amount on the 6th Policy anniversary and the change on the 12th Policy
anniversary are calculated as follows:

CALCULATION OF CHANGE IN
VARIABLE INSURANCE ADJUSTMENT
AMOUNT AT END OF POLICY YEAR
------------------------------
6 12
--------- ----------
(1) Cash Value End of Prior Year. $4,972.00 $14,529.00
(2) Net Premium...................... 1,056.00 1,056.00
(3) Benefit Base Beginning of
Current Policy Year: (1)+(2)..... 6,028.00 15,585.00
(4) Actual Net Rate of Return
(.064399) less the Base
Rate of Return which is the
Assumed Rate (.04)............... .024399 .024399
(5) Investment Return (3)x(4)........ 147.08 380.25
(6) Net Single Premium at
End of Current Year.............. 0.22416 0.27338
(7) Change in Variable Adjustment
Amounts (5) divided by (6)....... $ 656.14 $ 1,390.92

Figures are rounded.

It should be noted that, as shown in the table below, the net single
premium increases as the Insured advances in age and thus larger dollar amounts
of investment return are required each year to result in the same increases in
the variable insurance amount.

NET SINGLE PREMIUM. A Policy includes a table of net single premiums used
to convert the investment return for a Policy into increases or decreases in the
variable insurance amount. This purchase basis does not depend upon the risk

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classification of a Policy or any changes in the Insured's health after issue of
a Policy. The net single premium will be lower for a Policy issued to a female
than for a Policy issued to a male, as shown below.

VARIABLE INSURANCE
ADJUSTMENT AMOUNT
NET SINGLE PREMIUM PURCHASED OR CANCELLED
MALE PER $1.00 OF VARIABLE BY $1.00 OF
ATTAINED AGE INSURANCE AMOUNT INVESTMENT RETURN
------------ --------------------- ----------------------
5 $.09884 $10.12
15 .13693 7.30
25 .18452 5.42
35 .25593 3.91
45 .35291 2.83
55 .47352 2.11
65 .60986 1.64

VARIABLE INSURANCE
ADJUSTMENT AMOUNT
NET SINGLE PREMIUM PURCHASED OR CANCELLED
FEMALE PER $1.00 OF VARIABLE BY $1.00 OF
ATTAINED AGE INSURANCE AMOUNT INVESTMENT RETURN
------------ --------------------- ----------------------
5 $.08195 $12.20
15 .11326 8.83
25 .15684 6.38
35 .21872 4.57
45 .30185 3.31
55 .40746 2.45
65 .54017 1.85

The variable insurance amount is cumulative and reflects the accumulation
of increases and decreases from past Policy years. The amount may be positive or
may be negative, depending on the investment performance of the designated
Subaccount(s) during the time the Policy is in force. If, at the time of the
Insured's death, the variable insurance amount is negative, then the insurance
benefit is the Guaranteed Insurance Amount. Good investment performance must
first offset any negative variable insurance amount before there can be a
positive amount.

An example of the death benefit using the policy illustration for a male
issue age 25 on Page 20, and assuming the 8% hypothetical gross annual
investment return (equivalent to a Net Investment Return of approximately
6.55%), the death benefit shown for the end of Policy year 5 would increase to
the amount shown for the end of Policy year 6 for the Policy, as follows:

GUARANTEED
INSURANCE VARIABLE
VARIABLE LIFE AMOUNT + INSURANCE = DEATH
POLICY MINIMUM AMOUNT BENEFIT
-------------- ---------- --------- -------
End of Policy Year 5.. $51,908 $1,489 $53,398
Increase.............. -- 657 657 (1.2% Increase)
End of Policy Year 6.. $51,908 $2,146 $54,055

If, instead, the gross annual investment return in the year illustrated had
been 0% (equivalent to a Net Investment Return of approximately -1.45%), the
death benefit would have decreased by $1,464 (a 2.7% decrease), and the death
benefit for the end of Policy year 6 would have been $51,934.

At a given Net Investment Return rate, the dollar amount of an increase or
decrease in the variable insurance amount is greater when assets in the
Subaccount(s) supporting the death benefit under a Policy are greater.

<PAGE>

Therefore, the change in the variable insurance amount (which affects the change
in the death benefit) is greater in the later Policy years when those assets are
higher in relation to the death benefit, than in the early Policy years when
those assets are relatively low.

For example, as shown in the example above for a male issue age 25 assuming
the 8% hypothetical gross annual investment return (equivalent to a Net
Investment Return of approximately 6.55%), the death benefit for the end of
Policy year 6 is 1.2% higher than the death benefit for the end of Policy year
5. The death benefit for that Policy at the end of Policy year 12, assuming the
8% hypothetical gross annual investment return, would be 2.4% higher than the
death benefit for the end of Policy year 11 (not shown on Page 20), as follows:

GUARANTEED
INSURANCE VARIABLE
VARIABLE LIFE AMOUNT + INSURANCE = DEATH
POLICY MINIMUM AMOUNT BENEFIT
-------------- ---------- --------- -------
End of Policy Year 11.. $51,908 $7,258 $59,166
Increase............... -- 1,391 1,391 (2.4% Increase)
End of Policy Year 12.. $51,908 $8,649 $60,557

Where a Policy's death benefit for a Policy year (after the first Policy
year) was equal to the Guaranteed Insurance Amount because the variable
insurance amount was negative, the death benefit would increase above the
Guaranteed Insurance Amount on a Policy anniversary only if the Net Investment
Return for the preceding Policy year was sufficiently greater than 4% to result
in a positive variable insurance amount and, accordingly, a death benefit above
the Guaranteed Insurance Amount. For example, assume the Policy for a male issue
age 25 illustrated on Page 20 had a 0% hypothetical gross annual investment
return for the first five policy years (which results in a negative variable
insurance amount). In order for there to be an increase in the death benefit
above the Guaranteed Insurance Amount for Policy year 7 (the amount shown for
the end of Policy year 6), the Net Investment Return for Policy year 6 would
have to be at least 17.5%.

NET INVESTMENT RETURN. On each Policy anniversary, the Net Investment
Return of the designated Subaccount(s) is computed separately for each Policy.
The Net Investment Return reflects the investment performance of each selected
Subaccount from the first day of the Policy year until the last day of the
Policy year. It reflects each Subaccount's:

Investment income (net of Series expenses);
Plus realized and unrealized capital gains;
Minus realized and unrealized capital losses;
Minus charges, if any, for taxes;
Minus a charge not exceeding .50% per year for mortality, expenses and
other risks.

The method of calculating the Net Investment Return is detailed in the
Policy. The Net Investment Return for a Policy year is not the same as the Net
Investment Return for the Subaccount(s) for a calendar year unless a Policy's
anniversary is the last day of the calendar year.

VALUATION OF ASSETS. For purposes of computing the Net Investment Return,
the value of the assets of each Subaccount are determined as of the close of
business on each business day.

First Investors Life daily calculates the asset valuation of each
Subaccount. The net asset value of a Series share is determined by the Series in
the manner set forth in the Fund's prospectus.

<PAGE>

CASH VALUE

AMOUNT OF CASH VALUE. The cash value of the Policy on any date is the sum of
the cash value you have in each Subaccount in which you have invested. The
amounts of the cash value you have in each Subaccount will vary daily depending
on investment experience. The cash value of each Subaccount at the end of each
Policy year is the amount of the tabular cash value attributable to the
Subaccount(s) on that date plus or minus the net single premium for the current
variable insurance amount attributable to the Subaccount(s) on that date. If the
date is other than the Policy anniversary date, the cash value will be increased
or decreased depending on the investment results of the Subaccount(s) selected
for the time elapsed since the last Policy anniversary. This assumes that no
premium is due and unpaid. In calculating the cash value, adjustments are made
for the net premium, the investment results and the cost of insurance
protection. (See below for an explanation of the Cost of Insurance Protection.)

For example, using the Policy illustration for a male issue age 25 on Page
20, and assuming the 8% hypothetical gross annual investment return (equivalent
to a Net Investment Return of approximately 6.55%), the cash value shown for the
end of Policy year 5 would increase to the amount shown for the end of Policy
year 6 for the Policy as follows:

(1) Cash Value End of Prior Year.............................. $ 4,972
(2) Net Premium............................................... 1,056
(3) Benefit Base Beginning of Current Policy Year 6: (1)+(2).. 6,028
(4) Actual Rate of Return..................................... .064399
(5) Actual Investment Return (3)x(4).......................... 388
(6) Benefit Base End of Policy Year 6: (3)+(5)................ 6,416
(7) Cost of Insurance During Policy Year 6.................... 84
(8) Cash Value End of Policy Year 6: (6)-(7).................. 6,332

The cash value is not guaranteed. The Policy offers the possibility of cash
value appreciation resulting from good investment performance, although there is
no assurance that such appreciation will occur. It is also possible, due to poor
investment performance, for the cash value to decline to the point of having no
value. The Policyowner bears all the investment risk as to the amount of the
cash value. It is unlikely that the Policy will have any cash value until the
later months of the first Policy year (see "Additional First Year Administrative
Charge"). The cash value stated in the illustrations on Pages 19 to 21 and Pages
30 to 32 are at the end of the Policy years shown, assuming the various
hypothetical investment returns, the cash value as of the end of the preceding
Policy year, adjusted to reflect the Net Investment Return of each Subaccount in
which you have invested, the cost of the insurance protection and premiums paid
since the Policy's last anniversary.

TRANSFER RIGHTS. Twice a year, at any time during the Policy year, you may
transfer part or all of your cash value from the Subaccounts you are in to any
other Subaccounts provided the cash value is not allocated to more than five of
the Subaccounts.

SURRENDER FOR CASH VALUE. The Policyowner may surrender the Policy for its
cash value at any time while the Insured is living. The amount payable will be
the cash value next computed after the request is received at the Home Office of
First Investors Life. Surrender will be effective on the date First Investors
Life has received both the Policy and a written request in a form acceptable to
First Investors Life. First Investors Life will usually pay the surrender value
within 7 days, but payment may be delayed when First Investors Life is not able
to determine the amount because the New York Stock Exchange is closed for
trading or the Securities and Exchange Commission determines that a state of
emergency exists.

<PAGE>

COST OF INSURANCE PROTECTION

First Investors Life issues variable life insurance policies to individuals
with standard mortality risks and to individuals with higher mortality risks, as
permitted by First Investors Life's underwriting rules. A higher gross premium
is charged for the person with the higher mortality risk. Given the same age,
sex and insurance face amount, the net annual premium going into the
Subaccount(s) is the same for the standard risk and the higher risk person.
Also, the cost of insurance deducted from the Subaccount(s) (item 7 in the
example above) would be the same for each such individual. First Investors Life
uses the 1980 Commissioners' Standard Ordinary Mortality Table to actuarially
compute the cost of insurance for each Policy, except mortality rates for
extended term insurance are from the Commissioners' 1980 Extended Term Table.
The cost is based on the net amount of insurance at risk (the Policy's face
amount plus the variable insurance amount less the cash value) and the person's
sex and attained age. The amount that is deducted each year is different because
as the person's age increases the probability of death generally increases. The
net amount of insurance at risk may decrease or increase each year depending on
investment experience of the selected Subaccount(s).

LOAN PROVISION

LOAN PRIVILEGE. The Policyowner may borrow up to 75% of the cash value
during the first three Policy years or 90% of the cash value after the first
three Policy years upon assignment to First Investors Life of the Policy as sole
security. Interest will be charged daily at an effective annual rate of 6%
compounded on each Policy anniversary. In general, the loan amount is sent
within seven days of receipt of the request. Except when used to pay premiums, a
new loan will not be permitted unless it is at least $100. The Policyowner may
repay all or a portion of any loan and accrued interest while the Insured is
living and the Policy is in force.

EFFECT OF LOAN. A loan does not affect the amount of the premiums due. When
a loan is taken out, a portion of the cash value equal to the loan is
transferred from the Subaccount(s) to First Investors Life's General Account.
Loans will be charged to each Subaccount in proportion to the investment in each
Subaccount as of the date of the Policy loan. The amount maintained in the
General Account will not be credited with the Net Investment Return earned by
Subaccount(s) during the period the loan is outstanding. Instead, it grows at
the assumed interest rate of 4%, in accordance with the tabular cash value
calculations as filed with the state insurance departments. Therefore, a
Policy's death benefit above the Guaranteed Insurance Amount and a Policy's cash
value are permanently affected by any loan whether or not repaid in whole or in
part.

Recall that the death benefit is made up of two parts: the Guaranteed
Insurance Amount and, if positive, the variable insurance amount (see "The
Guaranteed Minimum" and "The Variable Insurance Amount"). The cash value, the
variable insurance amount and the death benefit in excess of the Guaranteed
Insurance Minimum, if any, are dependent upon the Net Investment Return of the
Subaccount(s). During periods of favorable investment return (a net rate of
return greater than 4%), an outstanding Policy loan will result in lower Policy
values than would have otherwise resulted in the absence of any indebtedness.

For example, use the Policy for a male issue age 25 illustrated on Page 20,
and assume the 8% gross annual investment return and that a $3,000 loan was made
at the end of Policy year 9. For the end of Policy year 10, the death benefit
and cash value would be $57,612 and $12,612, respectively. (The outstanding
indebtedness would be deducted from these amounts upon death or surrender.) The
differences between these amounts and the $57,898 death benefit and $12,685 cash

<PAGE>

value shown on Page 20 for Policy year 10 result because the portion of the cash
value equal to the indebtedness which is transferred from the Subaccount(s) does
not reflect the Subaccount(s) Net Investment Return of approximately 6.55%.

However, outstanding indebtedness will diminish the adverse effect on
Policy values during a period of unfavorable investment return (a net rate of
return less than 4%) because the portion of the cash value transferred from the
Subaccount(s) to the General Account will grow at the assumed rate of 4%. Thus,
a Policy loan can protect the cash value from decreasing if the Net Investment
Return is less than 4%.

Interest will be charged daily at an effective annual rate of 6% compounded
on each Policy anniversary. Interest is payable at the end of each Policy year
and on the date the loan is repaid. If interest is not paid when due, the loan
will be increased by that amount and an equivalent amount of cash value will be
transferred from the Subaccount(s) to the General Account. Loan repayments will
be credited to each Subaccount in proportion to the investment in each
Subaccount as of the date of repayment.

The amount of any outstanding loan plus interest is subtracted from the
death benefit or the cash value on payment. Whenever the then outstanding loan
with accrued interest equals or exceeds the cash value, the Policy terminates 31
days after notice has been mailed by First Investors Life to the Policyowner and
any assignee of record at their last known addresses, unless a repayment is made
within that period.

As of December 31, 1994, loans in the aggregate amount of $5,814,229 were
outstanding. During the year 1994, First Investors Life received $257,934 in
interest on outstanding loans. As of December 31, 1994, there were no loans in
default.

PREMIUMS

ALLOCATION OF PREMIUM. At the time of application, the Policyowner decides
to place his or her net annual premium (see "Charges Deducted from Premiums")
into any one or more of the Subaccounts. The death benefit and cash value may
increase or decrease depending on the investment performance of the chosen
Subaccount(s).

PAYMENT PERIODS AND FREQUENCY. Premiums are payable annually or may be paid
more frequently as elected by the Policyowner. Payments are due on or before the
due dates as specified in the Policy at the Home Office of First Investors Life.
Premium payments received before they are due will be placed in First Investors
Life's General Account. On the day the premium payment is due, the premium will
be credited to the Subaccount(s) selected by the Policyowner. Premiums for the
Policy are payable for twelve years. A refund will be made of premiums paid
which are applicable to any period which extends beyond the end of the month in
which the Insured's death occurs.

LEVEL PREMIUMS. The level premiums act as an averaging device to cover
expenses, which are highest in the early Policy years, and the cost of the
mortality risk, which increases with age. Thus, in the early Policy years,
premiums are higher than needed to pay death claims, while in the later years
premiums are less than required to meet the death claims. Accordingly, the
assets allocated to the Subaccount(s) in the early Policy years are used in part
to support the expected death claims in those years, with the balance
accumulated as a reserve to help meet the death claims in the later Policy
years. Also, assets are allocated to First Investors Life's General Account to
accumulate as a reserve to cover the contingency that the Insured will die at a
time when the guaranteed minimum death benefit exceeds the death benefit which
would have been payable in the absence of such guarantee. In setting its premium

<PAGE>

rates, First Investors Life took into consideration actuarial estimates of death
and surrender benefits, lapses, expenses, investment experience and an amount to
be contributed to First Investors Life's surplus.

PREMIUM RATES. When payments are made on other than an annual basis, the
aggregate premium amounts for a Policy year are higher, reflecting charges for
loss of interest and additional billing and collection expenses. The additional
charge is deducted from these premiums when they are received.

PREMIUMS ON INSTALLMENT BASIS
(AS A PERCENTAGE OF AN ANNUAL PREMIUM)

AGGREGATE PREMIUMS
FREQUENCY EACH PREMIUM FOR POLICY YEAR
--------- ------------ ------------------
Annual.................. 100.00% 100.00%
Semiannual.............. 51.00 102.00
Quarterly............... 26.00 104.00
Pre-authorized Monthly.. 8.83 105.96

Under a pre-authorized monthly plan, premiums are automatically paid by
charges made against the Policyowner's bank account.

AUTOMATIC PREMIUM LOAN PROVISION. Any premium not paid before the end of
the grace period (described below) will be paid by charging the premium as a
Policy loan against the Policy provided the Automatic Premium Loan provision has
been elected in the application for the Policy or is elected in writing and
received by First Investors Life at its Home Office while no premium is in
default; provided, the resulting Policy loan and loan interest to the next
premium due date do not exceed the loan value.

The Automatic Premium Loan Provision may be revoked at any time by written
request from the Policyowner received by First Investors Life at its Home
Office.

DEFAULT AND OPTIONS ON LAPSE. A premium not paid on or before its due date
is in default, but the Policy provides for a 31-day grace period for the payment
of each premium after the due date. The insurance continues in force during the
grace period, but, if the Insured dies during the grace period, the portion of
the premium due which is applicable to the period from the premium due date to
the end of the Policy month in which death occurs is deducted from the death
benefit.

Within 60 days after the date of default, if a Policy is not surrendered,
the cash value less any loans and interest may be applied to purchase continued
insurance. The options are for reduced paid-up whole life insurance or extended
term insurance. Under the Policy, the extended term insurance option would be
the automatic option if no other election was selected. However, that option is
available only in standard risk cases. If the Policy was rated for extra
mortality risks, the paid-up insurance will be the automatic option, unless
paid-up insurance provides equal or more insurance. Both options are for fixed
life insurance and neither option requires the further payment of premiums.

The reduced paid-up whole life insurance option provides a fixed and level
amount of paid-up whole life insurance. The amount of coverage will be that
which the surrender value on the date the option becomes effective will
purchase. The extended term insurance option provides a fixed and level amount
of term insurance equal to the death benefit (less any indebtedness) as of the
date the option became effective. The insurance coverage under this option will

<PAGE>

continue for as long a period as the surrender value on such date will purchase.

For example, use the Policy for a male issue age 25 illustrated on Page 20
and assume the 0% and 8% hypothetical gross annual investment returns. If an
option became effective at the end of Policy year 5, the fixed insurance
coverage under these Policies would be as follows:

0% 8%
------- -------
Cash Value.................... $ 3,992 $ 4,972
Reduced Paid-up Insurance..... 18,406 22,925
for life for life
Extended Term Insurance....... 51,908 53,398
for 25 years for 28 years

A Policy continued under either option may be surrendered for its cash
value while the Insured is living. Loans are available under the reduced paid-up
whole life insurance option, but not under the extended term insurance option.

REINSTATEMENT. A Policy not surrendered for its cash value may be
reinstated within five years from the date of default in accordance with the
Policy. To reinstate, the Policyowner must present evidence of insurability
acceptable to First Investors Life and must pay to First Investors Life the
greater of (a) (i) all premiums from the date of default with interest to the
date of reinstatement plus (ii) any Policy debt (plus interest to the date of
reinstatement) in effect when the Policy was continued as paid up insurance or
extended term insurance; or (b) 110% of the increase in cash value resulting
from reinstatement. Any Policy debt that arose after the Policy was continued as
paid up insurance and in effect immediately before reinstatement is then added
to the greater of (a) or (b) to comprise the payment required. Interest is
calculated at the rate of 6% per year compounded annually.

For the fiscal year ended December 31, 1994, First Investors Life received
$26,505,000 in premiums from Policyowners.

CANCELLATION RIGHTS

The Policyowner has a limited right to cancel and return the Policy to
First Investors Life. The Policyowner may examine the Policy and at any time
within 10 days after receipt of the Policy or notice of right of withdrawal, or
within 45 days after completion of Part I of the application for the Policy,
whichever is later, return it to First Investors Life or to the agent of First
Investors Life through whom it was purchased with a written request for
cancellation and obtain a full refund of the premiums paid.

EXCHANGE PRIVILEGE

Provided premiums are duly paid, within twenty-four months after the issue
date shown in the Policy, the Policyowner may exchange the Policy for a
permanent fixed life insurance policy specified in the Policy on the Insured's
life. Evidence of insurability is not required to exercise this privilege. The
new policy will have a level face amount equal to the face amount of the Policy
and the same benefit riders, issue dates and risk classification for the Insured
as the Policy. Premiums for the new policy will be based on the premium rates
for the new policy which were in effect on the Policy date. The Policyowner may
elect either a continuous-premium policy or a limited-payment policy.

<PAGE>

In some cases, there may be a cash adjustment on exchange. The adjustment
will be the Policy's surrender value minus the new policy's tabular cash value.
If the result is positive, First Investors Life must pay the owner; if the
result is negative, the owner must pay First Investors Life. First Investors
Life will determine the amount of a cash adjustment as of the date the Policy
and written request is received by First Investors Life at its Home Office.

The foregoing description of Policy provisions is qualified by reference to
a specimen of the Policy which has been filed as an exhibit to the Registration
Statement of Separate Account B. Settlement options, optional insurance benefits
and general provisions of the Policies are discussed under Appendix I.

ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES AND ACCUMULATED PREMIUMS

The tables on Pages 19 to 21 illustrate the way in which the Policy
operates. They show how the death benefit and the cash value may vary over an
extended period of time assuming the Subaccount(s) experience hypothetical rates
of investment return (i.e., investment income and capital gains and losses,
realized or unrealized) equivalent to constant gross annual rates of 0%, 4% and
8%. The cash value on any day within a Policy year equals the cash value as of
the end of the preceding Policy year, adjusted to reflect the Subaccount(s) Net
Investment Return, the cost of the insurance protection and premiums paid since
the Policy's last anniversary. The tables are based on annual premiums of $600,
$1,200 and $1,800 to assist in a comparison of the death benefits and cash
values under the Policy with those under other variable life insurance policies
which may be issued by First Investors Life or other companies. The death
benefit and cash value for the Policy would be different from those shown if
premiums are paid more frequently than annually or if the actual rates of
investment return applicable to the Policy averaged 0%, 4% or 8% over a period
of years, but nevertheless fluctuated above or below that average for individual
Policy years. Please refer to Pages 30 to 32 for additional illustrations of
death benefits, cash values and accumulated premiums which assume a hypothetical
gross annual investment return of 0%, 6% and 12%.

The constant gross annual rate of investment return of 0%, 4% and 8% is reduced
by the following:

1. A daily charge to the Subaccount(s) for mortality and expense risks
and other contingencies equivalent to an annual charge of .50% at the
beginning of each year.
2. An investment advisory fee of 0.75% of each underlying Series' average
daily net assets.
3. Assumed operating expenses of 0.20% of each underlying Series' average
daily net assets.

Taking into account all of these charges, the gross annual rates of
investment return of 0%, 4%, and 8% correspond to net annual rates of
approximately -1.45%, 2.55% and 6.55%, respectively. The tables reflect that no
charge is currently made to the Subaccount(s) for First Investors Life's
corporate Federal income taxes. However, First Investors Life may make such
charges in the future which would require higher rates of investment return in
order to produce after-tax returns of 0%, 4% and 8% (see "Charges for First
Investors Life's Income Taxes").

The second column of each table shows the amount which would be accumulated
if the annual premium (gross amount) was invested to earn interest, after taxes,
at 5% compounded annually. For a further discussion of illustrations of death
benefits, cash values and accumulated premiums, see Appendix II.

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

<PAGE>

First Investors Life will furnish upon request a comparable illustration
using the proposed Insured's age and the face amount or premium amount
requested, and assuming that premiums are paid on an annual basis and the
proposed Insured is a standard risk. In addition, a comparable illustration will
be included at the delivery of the Policy if a purchase is made, reflecting the
Insured's risk classification.

<PAGE>

MALE ISSUE AGE 10
$600 ANNUAL PREMIUM FOR STANDARD RISK (1)
$39,638 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)
<TABLE>
<CAPTION>
TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT A RETURN OF
YEAR DUE INTEREST AT 5% 0% 4% 8% 0% 4% 8%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $600 $ 630 $39,638 $39,638 $39,673 $ 138 $ 145 $ 152
2 600 1,291 39,638 39,638 39,798 586 617 650
3 600 1,986 39,638 39,638 40,014 1,023 1,098 1,176
4 600 2,715 39,638 39,638 40,321 1,450 1,585 1,730
5 600 3,481 39,638 39,638 40,720 1,889 2,104 2,339
6 600 4,285 39,638 39,638 41,213 2,316 2,629 2,981
7 600 5,129 39,638 39,638 41,799 2,734 3,163 3,658
8 600 6,016 39,638 39,638 42,479 3,143 3,707 4,374
9 600 6,947 39,638 39,638 43,253 3,547 4,263 5,132
10 600 7,924 39,638 39,638 44,120 3,946 4,832 5,936

15 0 11,608 39,638 39,638 49,496 4,473 6,382 9,133

20 0 14,816 39,638 39,638 55,625 4,010 6,971 12,064

25 0 18,909 39,638 39,638 62,507 3,610 7,646 15,998

30 0 24,133 39,638 39,638 70,244 3,244 8,369 21,173

Attained
Age
65 0 81,723 39,638 39,638 126,226 1,685 11,721 76,980
</TABLE>

(1) Corresponds to $306.00 semiannually, $156.00 quarterly, or $52.98 monthly.

(2) Assumes no policy loan is made.

Hypothetical rates of interest are illustrative only and are not a
representation of past or future rates of return. They are after deduction of
tax charges but before any other expenses charged against the Series Fund or
Separate Account B. Actual rates may be higher or lower than hypothetical rates.
No representation can be made by First Investors Life or the Series Fund that
hypothetical rates can be achieved for any one year or sustained over any period
of time. See prospectus for details of the calculations.

<PAGE>

MALE ISSUE AGE 25
$1,200 ANNUAL PREMIUM FOR STANDARD RISK (1)
$51,908 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)
<TABLE>
<CAPTION>
TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT A RETURN OF
YEAR DUE INTEREST AT 5% 0% 4% 8% 0% 4% 8%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,200 $ 1,260 $51,908 $51,908 $51,973 $ 409 $ 429 $ 449
2 1,200 2,583 51,908 51,908 52,154 1,308 1,385 1,462
3 1,200 3,972 51,908 51,908 52,451 2,197 2,366 2,543
4 1,200 5,431 51,908 51,908 52,864 3,076 3,375 3,695
5 1,200 6,962 51,908 51,908 53,398 3,992 4,459 4,972
6 1,200 8,570 51,908 51,908 54,054 4,897 5,572 6,332
7 1,200 10,259 51,908 51,908 54,832 5,791 6,713 7,778
8 1,200 12,032 51,908 51,908 55,732 6,673 7,882 9,315
9 1,200 13,893 51,908 51,908 56,754 7,544 9,080 10,949
10 1,200 15,848 51,908 51,908 57,898 8,404 10,308 12,685

15 0 23,217 51,908 51,908 64,950 9,524 13,635 19,577

20 0 29,631 51,908 51,908 72,999 8,504 14,836 25,762

25 0 37,818 51,908 51,908 82,058 7,539 16,033 33,680

30 0 48,266 51,908 51,908 92,259 6,628 17,185 43,687

Attained
Age
65 0 78,620 51,908 51,908 116,712 4,947 19,096 71,178
</TABLE>

(1) Corresponds to $612.00 semiannually, $312.00 quarterly, or $105.96 monthly.

(2) Assumes no policy loan is made.

<PAGE>

MALE ISSUE AGE 40
$1,800 ANNUAL PREMIUM FOR STANDARD RISK (1)
$47,954 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)

TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT A RETURN OF
YEAR DUE INTEREST AT 5% 0% 4% 8% 0% 4% 8%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,800 $ 1,890 $47,954 $47,954 $48,027 $ 762 $ 799 $ 835
2 1,800 3,874 47,954 47,954 48,206 2,097 2,225 2,355
3 1,800 5,958 47,954 47,954 48,492 3,406 3,678 3,964
4 1,800 8,146 47,954 47,954 48,883 4,689 5,161 5,667
5 1,800 10,443 47,954 47,954 49,386 6,020 6,747 7,549
6 1,800 12,856 47,954 47,954 49,999 7,328 8,367 9,543
7 1,800 15,388 47,954 47,954 50,724 8,615 10,023 11,656
8 1,800 18,048 47,954 47,954 51,560 9,884 11,717 13,898
9 1,800 20,840 47,954 47,954 52,509 11,137 13,450 16,276
10 1,800 23,772 47,954 47,954 53,571 12,375 15,225 18,798

15 0 34,825 47,954 47,954 60,126 13,764 19,765 28,471

20 0 44,447 47,954 47,954 67,618 11,963 20,956 36,545

25 0 56,727 47,954 47,954 76,062 10,274 21,963 46,387

30 0 72,399 47,954 47,954 85,589 8,695 22,699 58,095

Attained
Age
65 0 56,727 47,954 47,954 76,062 10,274 21,963 46,387
</TABLE>

(1) Corresponds to $918.00 semi annually; $468.00 quarterly, or $158.94
monthly.

(2) Assumes no policy loan is made.

<PAGE>

FEDERAL INCOME TAX STATUS

POLICY PROCEEDS

The discussion herein is general in nature and not intended as tax advice.
It is based upon First Investors Life's understanding of Federal income tax laws
as they are currently interpreted. No representation is made regarding the
likelihood of continuation of such laws or the current interpretations by the
Internal Revenue Service. Moreover, no attempt is made to consider any
applicable state or other (e.g., estate or inheritance) tax laws. Each
interested person should consult his tax advisor concerning the matters set
forth herein.

First Investors Life believes that the Policy qualifies as a life insurance
contract as defined in Section 7702(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). Consequently, the death benefit should be fully excludable
from the beneficiary's gross income and the Policyowner should not be deemed to
be in actual or constructive receipt of the cash values (including increments
thereof) under the Policy, until its actual surrender. With respect to a
corporate Policyowner, however, such "inside build-up" of the Policy may be
subject to the alternative minimum tax.

Qualification as a life insurance contract for Federal income tax purposes
depends, in part, upon the satisfaction by Separate Account B of certain
diversification requirements contained in Section 817(h) of the Code. The
Adviser is expected to manage the assets of the Series in a manner that complies
with these diversification requirements, and under a special "look-through"
rule, satisfaction of such requirements by the Series will be attributed to
Separate Account B. The look-through rule is applicable because all shares of
the Series comprising the Fund will be owned only by Separate Account B (and
similar accounts of First Investors Life or other insurance companies) and
access to the Series will be available exclusively through the purchase of
Policies (and additional variable annuity or life insurance products of First
Investors Life or other insurance companies). Series shares also may be held by
the Adviser provided such shares are being held in connection with the creation
or management of the Series. The Adviser does not intend to sell any Series
shares it owns to the general public. It is possible that future guidelines, if
any, concerning diversification could restrict the rights of a Policyowner with
respect to the selection of investment options.

First Investors Life does not believe that any Policy will be
characterized, at issuance, as a "modified endowment contract" within the
meaning of Section 7702A of the Code. Section 7702A and the characterizations
given thereunder generally apply to a Policy that was newly issued, or that was
received in exchange for another that was issued, on or after June 21, 1988, but
only if the amounts to be paid for the new Policy or the Policy surrendered in
exchange therefor were deemed to be excessive by reference to a statutorily
prescribed test. A Policy that escapes characterization as a modified endowment
contract may nonetheless be treated as such if a material term of the Policy,
e.g., death benefits, is altered or if the Policy is converted from a term life
insurance contract to a life insurance contract providing a different form of
coverage (whether or not issued before June 21, 1988). If a Policy is treated as
a modified endowment contract, then distributions thereunder (including the
proceeds of any loan made under, or in result of a pledge or assignment of, the
Policy) will be includable in gross income and subject to regular Federal income
taxation to the extent of the income in the contract. An additional 10% tax will
also be imposed on the taxable amount of any such portion, subject to certain
exceptions.

Prospective Policyowners are advised that Code Section 7702A was only
recently enacted into law and that no regulations or other forms of definitive
guidance have as yet been provided with respect to such section. Section 7702A
is complex and there can be no assurance that the Internal Revenue Service would

<PAGE>

necessarily agree in every particular with First Investors Life's interpretation
of such section. Interested persons are accordingly urged to consult their tax
advisors before acquiring or converting a Policy or otherwise effecting a
material change to a Policy.

Subject to the foregoing discussion of modified endowment contracts, any
loans made under a Policy will be treated as indebtedness and no part of such
loan will constitute income to the Policyowner. In addition, the deductibility
of the interest on such loans will depend upon the purposes for which the loan
is made in accordance with the normal Federal income tax treatment of interest
expense.

With respect to business-related policies (purchased after June 20, 1986
and covering the lives of officers, employees or persons with a financial
interest in the Policyowner's trade or business), no deduction for interest on
loans is allowed to the extent that aggregate loans to any such officer,
employee or financially interested person exceed $50,000.

Under the Code, income tax must generally be withheld from the taxable
portion of the proceeds paid upon surrender of a Policy, unless the Policyowner
notifies First Investors Life in writing, before the payment date, that such
withholding is not to be made. Failure to withhold or withholding of an
insufficient amount may subject the Policyowner to taxation. In addition,
insufficient withholding and insufficient estimated tax payments may subject the
Policyowner to penalties.

CHARGES FOR FIRST INVESTORS LIFE'S INCOME TAXES

First Investors Life is taxed as a "life insurance company" under
Subchapter L of the Code. Under the applicable provisions of the Code, First
Investors Life will be required to include its variable life insurance
operations in its Federal income tax return. Currently, no charges are made
against the Subaccount(s) for First Investors Life's Federal income taxes
attributable to the Subaccount(s). However, First Investors Life may make such
charges in the future. First Investors Life may charge the Subaccount(s) for its
Federal income taxes attributable to the Subaccount(s) when First Investors
Life's tax treatment and obligations become clarified. Any such charges against
a Subaccount would reduce its Net Investment Return.

Under current laws, First Investors Life may incur state and local taxes
(in addition to premium taxes) in several states. At present, these taxes are
not significant. After First Investors Life's Federal income tax treatment is
clarified, or if prior to that time there is a material change in applicable
state or local tax laws, charges for such taxes, if any, attributable to the
Subaccount(s) may be made.

If any tax charges are made in the future they will be accumulated daily
and transferred from the Subaccount(s) to First Investors Life's General
Account. Any investment earnings on tax charges accumulated in the Subaccount(s)
will be retained by First Investors Life.

VOTING RIGHTS

In accordance with its view of present applicable law, First Investors Life
will vote the Series' shares held in the corresponding Subaccount(s) at regular
and special meetings of shareholders of the Fund in accordance with instructions
received from Policyowners. Shares of the Series held by First Investors Life
which do not represent shares attributable to Policyowners will be voted, on any
matter, in proportion to the instructions from Policyowners as to their own
shares. However, if the 1940 Act or any Regulation thereunder should be amended
or if the present interpretation thereof should change, and as a result, First

<PAGE>

Investors Life determines that it is permitted to vote the Series' shares in its
own right, it may elect to do so.

The number of Series shares held in the corresponding Subaccount which is
attributable to each Policyowner is determined by dividing the corresponding
Subaccount's Accumulated Value by the value of one Series share. The number of
votes which a person has the right to cast will be determined as of the record
date established by the Fund. Voting instructions will be solicited by written
communication prior to the date of the meeting at which votes are to be cast.
Series shares held in the corresponding Subaccount as to which no timely
instructions are received will be voted by First Investors Life in proportion to
the voting instructions which are received with respect to all Policies
participating in the Subaccount. Each person having a voting interest in the
Subaccount will receive reports and other materials relating to the Series.

The voting rights described in this Prospectus are created under applicable
Federal securities laws. To the extent that such laws or regulations promulgated
thereunder eliminate the necessity to submit such matters for approval by
persons having voting rights in separate accounts of insurance companies or
restrict such voting rights, First Investors Life reserves the right to proceed
in accordance with any such laws or regulations. First Investors Life also
reserves the right, subject to compliance with applicable law, including
approval of Policyowners if so required, (1) to transfer assets determined by
First Investors Life to be associated with the class of policies to which the
Policies belong from Separate Account B to another separate account by
withdrawing the same percentage of each investment in Separate Account B with
appropriate adjustments to avoid odd lots and fractions, (2) to operate Separate
Account B as an "open-end investment company" under the 1940 Act, or in any
other form permitted by law, the investment adviser of which would be First
Investors Life or an affiliate, (3) to deregister Separate Account B under the
1940 Act, and (4) to operate Separate Account B under the general supervision of
a committee any or all the members of which may be interested persons (as
defined in the 1940 Act) of First Investors Life or an affiliate, or to
discharge the Committee. First Investors Life has reserved all rights in respect
of its corporate name and any part thereof, including without limitation the
right to withdraw its use and to grant its use to one or more other separate
accounts and other entities.

OFFICERS AND DIRECTORS OF FIRST INVESTORS LIFE INSURANCE COMPANY

NAME OFFICE PRINCIPAL OCCUPATION FOR LAST 5 YEARS
- ---- ------ -------------------------------------

Jay G. Baris Director Partner, Kramer, Leven, Naftalis,
Nessen, Kamin & Frankel, New York,
Attorneys; Secretary and Counsel,
First Financial Savings Bank, S.L.A.,
New Jersey.

William H. Drinkwater First Vice First Vice President and Chief
President and Actuary, First Investors Life since
Chief Actuary April, 1992; Vice President - Actuary,
Home Life Insurance Company, New York,
prior thereto.

Lawrence M. Falcon Senior Senior Vice President and Comptroller,
Vice President First Investors Life.
and Comptroller

Richard H. Gaebler President President, First Investors Life.
and Director

<PAGE>

NAME OFFICE PRINCIPAL OCCUPATION FOR LAST 5 YEARS
- ---- ------ -------------------------------------

George V. Ganter Director Vice President, First Investors Asset
Management Company, Inc., Portfolio
Manager, FIMCO.

Albert J. Gretz Vice President Vice President, First Investors Life

Robert J. Grosso Director Assistant Counsel, FIC since January
1995; Business Consultant; Assistant
Vice President and Assistant General
Counsel, Alliance Fund Distributors,
Inc. from September 1993 to August
1994; Of Counsel, Law Office of
Richard S. Mazawey from May 1991 to
September 1993; Secretary and General
Counsel, FIC prior to April 1990

Glenn O. Head Chairman and Director Chairman and Director, FICC, FIMCO and
FIC.

Kathryn S. Head Director President, FICC and FIMCO; Vice
President, Chief Financial Officer and
Director, FIC; President and Director,
First Financial Savings Bank, S.L.A.

Scott Hodes Director Partner, Ross & Hardies, Chicago,
Illinois, Attorneys, since January
1992; prior thereto, Partner, Arvery,
Hodes, Costello & Burman, Chicago,
Illinois, Attorneys.

Carol Lerner Brown Secretary Assistant Secretary, FIC; Secretary,
FIMCO and FICC.

William M. Lipkus Chief Accounting Chief Accounting Officer, First
Officer Investors Life since June, 1992;
Manager, Tait Weller & Baker, Edison,
New Jersey from June, 1986 to
June, 1992.

F. Van S. Parr Director Of Counsel to Whitman & Ransom, New
York, Attorneys.

Jackson Ream Director Senior Vice President, Nations Bank of
Texas (formerly NCNB Texas National
Bank), Dallas, Texas.

Nelson Schaenen Jr. Director Partner, Weiss, Peck & Greer, New
York, Investment Managers.

Ada M. Suchow Vice President Vice President, First Investors Life.

John T. Sullivan Director Director, FIMCO and FIC; Of Counsel to
Hawkins, Delafield & Wood, New York,
Attorneys.

First Investors Life paid its three highest paid officers aggregate
compensation from salaries of $441,459 during 1994. The aggregate remuneration
paid to all other officers during 1994 was $350,295. Administrative personnel,
excluding officers, received $1,868,292 in compensation. Directors of First
Investors Life were paid $8,250 in the aggregate for directors fees.

A fidelity bond in the amount of $5,000,000 covering First Investors Life's
officers and employees has been issued by Gulf Insurance Company and CNA
Insurance Company, as co-surety. A directors and officers liability policy in
the amount of $3,000,000 covering First Investors Life's directors and officers
has been issued by the Great American Insurance Companies.

<PAGE>

DISTRIBUTION OF POLICIES

The Policies distributed by First Investors Life are sold by insurance
agents who are licensed to sell variable life insurance.

The Policies are offered for sale in Alabama, Arizona, Arkansas, Colorado,
Connecticut, Florida, Georgia, Iowa, Illinois, Indiana, Kentucky, Louisiana,
Massachusetts, Maryland, Michigan, Minnesota, Missouri, Mississippi, North
Carolina, Nebraska, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, West
Virginia, Wisconsin and Wyoming.

CUSTODIAN

First Investors Life, subject to applicable laws and regulations, is to be
the custodian of the securities of the Subaccounts. First Investors Life will
maintain the records and accounts of Separate Account B. The assets of the
Subaccounts will be held by United States Trust Company of New York (TIN 13-
6065574), 114 W. 47th Street, New York, NY 10036 under a safekeeping
arrangement. Under the terms of a Safekeeping Agreement dated June 16, 1986,
between First Investors Life and United States Trust Company of New York,
securities and similar investments of the Subaccounts shall be deposited in the
safekeeping of United States Trust Company of New York. Such agreement will
remain in effect until Separate Account B has been completely liquidated and the
proceeds of the liquidation distributed to the security holders of Separate
Account B, or a successor custodian, having the requisite qualifications, has
been designated and has accepted such custodianship. First Investors Life is
responsible for the payment of all expenses of, and compensation to, United
States Trust Company of New York in such amounts as may be agreed upon from time
to time. For the fiscal year ended December 31, 1994, First Investors Life paid
$400 to United States Trust Company of New York.

REPORTS

At least once each Policy year, First Investors Life shall mail a report to
the Policyowner within 31 days after the Policy anniversary. The report shall be
mailed to the last address known to First Investors Life. The report will show
the death benefit, cash value and policy debt on the anniversary and any loan
interest for the prior year. The report will also show the allocation of the
investment base on that anniversary. No report will be sent if the Policy is
continued as reduced paid-up or extended term insurance.

STATE REGULATION

First Investors Life is subject to the laws of the State of New York
governing insurance companies and to regulations by the New York State Insurance
Department. An annual statement in a prescribed form is filed with the
Department of Insurance each year covering the operations of First Investors
Life for the preceding year and its financial condition as of the end of such
year.

First Investors Life's books and accounts are subject to review by the
Insurance Department at any time and a full examination of its operations is
conducted periodically. Such regulation does not, however, involve any
supervision of management or investment practices or policies except to
determine compliance with the requirements of the New York Insurance Law. In
addition, First Investors Life is subject to regulation under the insurance laws
of other jurisdictions in which it may operate.

<PAGE>

EXPERTS

The financial statements included in this Prospectus have been examined by
Tait, Weller & Baker, independent certified public accountants, and are included
herein in reliance upon the authority of said firm as experts in accounting and
auditing.

RELEVANCE OF FINANCIAL STATEMENTS

The values of the interests of Policyowners under the Policies will be
affected solely by the investment results of the Subaccount(s). The financial
statements of First Investors Life as contained herein should be considered only
as bearing upon First Investors Life's ability to meet its obligations to
Policyowners under the Policies, and they should not be considered as bearing on
the investment performance of the Subaccount(s).

The most current financial statements of First Investors Life and Separate
Account B are those as of the end of the most recent fiscal year. Neither First
Investors Life nor Separate Account B prepare their financial statements more
often than annually and believe that any incremental benefit to prospective
policyholders that may result from preparing and delivering more current
financial statements, though unaudited, does not justify the additional cost
that would be incurred. In addition, First Investors Life represents that there
have been no adverse changes in the financial condition or operations of First
Investors Life or Separate Account B between the end of the most current fiscal
year and the date of this Prospectus.

APPENDIX I-OTHER POLICY PROVISIONS

SETTLEMENT OPTIONS

In lieu of a single sum payment of Policy proceeds on death or surrender,
an election may be made to apply all or a portion of the proceeds under any one
of the fixed benefit settlement options provided in the Policy. The options are
stated below.

PROCEEDS LEFT AT INTEREST. Left on deposit to accumulate with First
Investors Life with interest payable at a rate of 2 1/2% per year.

PAYMENT OF A DESIGNATED AMOUNT. Payable in installments until proceeds
applied under the option and interest on unpaid balance at 2 1/2% per year and
any additional interest are exhausted.

PAYMENT FOR A DESIGNATED NUMBER OF YEARS. Payable in installments for up to
25 years, including interest at 2 1/2% per year. Payments may be increased by
additional interest which would be paid at the end of each installment year.

LIFE INCOME OPTION, GUARANTEED PERIOD. Payments are guaranteed for 10 or 20
years, as elected, and for life thereafter. During the guaranteed period of 10
or 20 years, the payments may be increased by additional interest.

LIFE INCOME, GUARANTEED RETURN. The sum of the payments made and any
payments due at the death of the person on whom the payments are based will
never be less than the proceeds applied.

LIFE INCOME ONLY. Payments will be made only while the person on whom the
payments are based is alive.

<PAGE>

OPTIONAL INSURANCE BENEFITS

On payment of an additional premium and subject to certain age and
insurance underwriting requirements, the following optional provisions, which is
subject to the restrictions and limitations set forth therein, may be included
in a Policy.

DISABILITY PREMIUM WAIVER. Providing that in the event of the Insured's
total disability before the Policy anniversary nearest to the Insured's 60th
birthday and continuing for at least 6 months, First Investors Life will waive
all premiums falling due after the commencement and during the continuance of
such disability.

TERM INSURANCE. Providing 12 year convertible level term insurance.

GENERAL PROVISIONS

BENEFICIARY. The beneficiary is as designated in the application for the
Policy, unless thereafter changed by the Policyowner during the Insured's
lifetime. A change of designation may be made by filing a written request with
the Home Office of First Investors Life in a form acceptable to First Investors
Life.

ASSIGNMENT. The Policy may be assigned by the Policyowner but no assignment
shall be binding on First Investors Life unless it is in writing and filed with
First Investors Life at its Home Office. First Investors Life will assume no
responsibility for the validity or sufficiency of any assignment. Unless
otherwise provided in the assignment, the interest of any revocable beneficiary
shall be subordinate to the interest of any assignee, regardless of when the
assignment was made and the assignee shall receive any sum payable to the extent
of his or her interest.

AGE AND SEX. If the age or sex of the Insured has been misstated, the
benefits available under the Policy will be those which the premiums paid would
have purchased for the correct age and sex.

SUICIDE. If the Insured commits suicide within 2 years from the Policy's
date of issue, the liability of First Investors Life under the Policy will be
limited to all premiums paid less any indebtedness.

INCONTESTABILITY. Except for nonpayment of premiums, the validity of the
Policy and its riders will not be contestable after it has been in force during
the lifetime of the Insured for 2 years from the Date of Issue.

GRACE PERIOD. A Grace Period of 31 days will be allowed for payment of each
premium after the first. The Policy will continue in force during the Grace
Period unless surrendered.

PAYMENTS AND DEFERMENT. Payment of the death benefit or surrender value or
loan proceeds will usually be made within 7 days after receipt by First
Investors Life of all documents required for such payments. However, payment may
be delayed if the amount cannot be determined because the New York Stock
Exchange is closed for trading or the Securities and Exchange Commission
determines that a state of emergency exists.

Under a Policy continued as paid-up or extended term insurance, the payment
of the surrender value or loan proceeds may be deferred for up to six months. If
the payment is postponed more than 30 days, interest at a rate of not less than
3% will be paid on the Surrender Value. The interest will be paid from the date
of surrender to the date payment is made.

DIVIDENDS. The Policies do not provide for dividend payments and therefore
are considered "non-participating" in the earnings of First Investors Life.

<PAGE>

APPENDIX II
ADDITIONAL ILLUSTRATIONS OF DEATH BENEFITS,
CASH VALUES AND ACCUMULATED PREMIUMS

Tables on Pages 30 to 32 illustrate the way in which a Policy operates.
They show how the death benefit and the cash value may vary over an extended
period of time assuming hypothetical rates of investment return for the
Subaccount(s) equivalent to constant gross annual rates of 0%, 6% and 12%. The
table on Page 30 is based on an annual premium of $600 for a male issue age 10,
the table on Page 31 is based on an annual premium of $1,200 for a male issue
age 25, and the table on Page 32 is based on an annual premium of $1,800 for a
male issue age 40. The illustrations assume a standard risk classification and
will assist in the comparison of death benefits and cash values under the
Policies with those under other variable life policies issued by First Investors
Life or other companies. Please refer to Page 17 for additional discussion and
to Pages 19 to 21 for additional illustrations of death benefits, cash values
and accumulated premiums which assume a hypothetical gross annual investment
return of 0%, 4% and 8%.

The amounts shown are as of the end of each Policy year and take into
account deductions from the annual premium and the daily charge for investment
advisory services and mortality and expense risk equivalent to an effective
annual charge of 1.45%. Taking account of the daily charges, the gross annual
rates of investment return of 0%, 6% and 12% correspond to net annual rates of
approximately -1.45%, 4.55% and 10.55%, respectively. The returns shown are also
net of any tax charges attributable to the Subaccount(s).

The second column of each table shows the amount to which the total
premiums paid to the end of the Policy year during the premium paying period
would accumulate if an amount equal to those premiums were invested to earn
interest, after taxes, at 5% compounded annually.

First Investors Life will furnish upon request a comparable illustration
reflecting the proposed Insured's age and the face amount or premium amount
requested, and assuming that premiums are paid on an annual basis and the
proposed Insured is a standard risk. In addition, a comparable illustration will
be included at the delivery of a Policy if a purchase is made reflecting the
Insured's risk classification if other than standard.

<PAGE>

MALE ISSUE AGE 10
$600 ANNUAL PREMIUM FOR STANDARD RISK (1)
$39,638 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)

<TABLE>
<CAPTION>
TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT RETURN OF
YEAR DUE INTEREST AT 5% 0% 6% 12% 0% 6% 12%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $600 $ 630 $39,638 $39,645 $39,729 $ 138 $ 148 $ 158
2 600 1,291 39,638 39,669 40,061 586 633 682
3 600 1,986 39,638 39,710 40,642 1,023 1,136 1,256
4 600 2,715 39,638 39,767 41,482 1,450 1,656 1,884
5 600 3,481 39,638 39,841 42,599 1,889 2,219 2,597
6 600 4,285 39,638 39,932 44,005 2,316 2,800 3,375
7 600 5,129 39,638 40,039 45,711 2,734 3,402 4,227
8 600 6,016 39,638 40,161 47,732 3,143 4,026 5,160
9 600 6,947 39,638 40,299 50,081 3,547 4,676 6,184
10 600 7,924 39,638 40,453 52,774 3,946 5,354 7,309

15 0 11,608 39,638 41,363 70,965 4,473 7,632 13,094

20 0 14,816 39,638 42,310 95,773 4,010 9,176 20,771

25 0 18,909 39,638 43,278 129,224 3,610 11,076 33,073

30 0 24,133 39,638 44,269 174,378 3,244 13,343 52,561

Attained
Age
65 0 81,723 39,638 49,597 785,431 1,685 30,247 479,001
</TABLE>

(1) Corresponds to $306.00 semi annually; $156.00 quarterly, or $52.98 monthly.

(2) Assumes no policy loan is made.

<PAGE>

MALE ISSUE AGE 25
$1,200 ANNUAL PREMIUM FOR STANDARD RISK (1)
$51,908 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)

<TABLE>
<CAPTION>
TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT RETURN OF
YEAR DUE INTEREST AT 5% 0% 6% 12% 0% 6% 12%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,200 $ 1,260 $51,908 $51,921 $ 52,078 $ 409 $ 439 $ 469
2 1,200 2,583 51,908 51,955 52,558 1,308 1,423 1,542
3 1,200 3,972 51,908 52,011 53,359 2,197 2,454 2,727
4 1,200 5,431 51,908 52,088 54,495 3,076 3,532 4,037
5 1,200 6,962 51,908 52,188 55,994 3,992 4,710 5,535
6 1,200 8,570 51,908 52,308 57,870 4,897 5,941 7,187
7 1,200 10,259 51,908 52,450 60,141 5,791 7,226 9,008
8 1,200 12,032 51,908 52,612 62,823 6,673 8,568 11,014
9 1,200 13,893 51,908 52,794 65,934 7,544 9,969 13,222
10 1,200 15,848 51,908 52,996 69,495 8,404 11,430 15,653

15 0 23,217 51,908 54,188 93,429 9,524 16,333 28,161

20 0 29,631 51,908 55,430 126,119 8,504 19,562 44,508

25 0 37,818 51,908 56,702 170,313 7,539 23,273 69,903

30 0 48,266 51,908 58,005 230,101 6,628 27,467 108,958

Attained
Age
65 0 78,620 51,908 60,711 420,822 4,947 37,025 256,641
</TABLE>

(1) Corresponds to $612.00 semi annually; $312.00 quarterly, or $105.96
monthly.

(2) Assumes no policy loan is made.

<PAGE>

MALE ISSUE AGE 40
$1,800 ANNUAL PREMIUM FOR STANDARD RISK (1)
$47,954 FACE AMOUNT (GUARANTEED MINIMUM DEATH BENEFIT)

<TABLE>
<CAPTION>
TOTAL DEATH BENEFIT (2) CASH VALUES (2)
END OF PREMIUMS ASSUMING HYPOTHETICAL GROSS (AFTER ASSUMING HYPOTHETICAL GROSS (AFTER
POLICY PREMIUM PAID PLUS TAX) ANNUAL INVESTMENT RETURN OF TAX) ANNUAL INVESTMENT A RETURN OF
YEAR DUE INTEREST AT 5% 0% 6% 12% 0% 6% 12%
------ ------- -------------- ------- ------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $1,800 $ 1,890 $47,954 $47,968 $ 48,144 $ 762 $ 817 $ 872
2 1,800 3,874 47,954 48,002 48,621 2,097 2,289 2,488
3 1,800 5,958 47,954 48,056 49,393 3,406 3,819 4,263
4 1,800 8,146 47,954 48,129 50,473 4,689 5,409 6,211
5 1,800 10,443 47,954 48,222 51,886 6,020 7,138 8,431
6 1,800 12,856 47,954 48,335 53,645 7,328 8,937 10,869
7 1,800 15,388 47,954 48,467 55,766 8,615 10,809 13,548
8 1,800 18,048 47,954 48,617 58,266 9,884 12,760 16,491
9 1,800 20,840 47,954 48,786 61,164 11,137 14,792 19,724
10 1,800 23,772 47,954 48,973 64,480 12,375 16,911 23,276

15 0 34,825 47,954 50,080 86,798 13,764 23,714 41,101

20 0 44,447 47,954 51,233 117,342 11,963 27,690 63,419

25 0 56,727 47,954 52,416 158,741 10,274 31,966 96,809

30 0 72,399 47,954 53,630 214,919 8,695 36,402 145,879

Attained
Age
65 0 56,727 47,954 52,416 158,741 10,274 31,966 96,809
</TABLE>

(1) Corresponds to $918.00 semi annually; $468.00 quarterly, or $158.94
monthly.

(2) Assumes no policy loan is made.

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
First Investors Life Insurance Company
New York, New York

We have audited the accompanying balance sheets of First Investors Life
Insurance Company as of December 31, 1994 and 1993, and the related statements
of income, stockholder's equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Investors Life
Insurance Company as of December 31, 1994 and 1993, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.

As discussed in notes 2 and 7 to the Financial Statements, the Company
changed its method of accounting for investments and its method of accounting
for income taxes.

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
February 21, 1995

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
<S> <C> <C>
Investments (note 2):
Available-for-sale securities................................. $103,898,007 $108,821,051
Held-to-maturity securities................................... 5,990,367 5,973,791
Short term investments........................................ 6,964,868 6,282,689
Policy loans.................................................. 14,686,101 12,884,321
------------ ------------
Total investments........................................... 131,539,343 133,961,852

Cash............................................................ 977,133 2,384,714
Premiums and other receivables, net of allowances of
$30,000 in 1994 and 1993...................................... 3,901,489 2,895,579
Accrued investment income....................................... 2,593,771 2,357,922
Deferred policy acquisition costs (note 6)...................... 19,321,891 19,006,119
Deferred Federal income taxes (note 7).......................... 1,884,000 --
Furniture, fixtures and equipment, at cost, less accumulated
depreciation of $697,010 in 1994 and $583,419 in 1993......... 243,634 290,104
Other assets.................................................... 193,780 171,566
Separate account assets......................................... 232,913,278 198,746,658
------------ ------------
Total assets................................................ $393,568,299 $359,814,454
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY

LIABILITIES:
Policyholder account balances (note 6).......................... $115,256,764 $112,537,306
Claims and other contract liabilities........................... 10,737,716 10,234,691
Deferred Federal income taxes (note 7).......................... -- 1,322,799
Accounts payable and accrued liabilities........................ 3,463,635 2,799,156
Separate account liabilities.................................... 232,913,278 198,746,658
------------ ------------
Total liabilities........................................... 362,371,393 325,640,610
------------ ------------

STOCKHOLDER'S EQUITY:
Common Stock, par value $4.75; authorized,
issued and outstanding 534,350 shares......................... 2,538,163 2,538,163
Additional paid in capital...................................... 6,496,180 6,496,180
Unrealized holding gains (losses) on available-for-sale
securities (note 2)........................................... (2,486,000) 3,050,000
Retained earnings............................................... 24,648,563 22,089,501
------------ ------------
Total stockholder's equity.................................. 31,196,906 34,173,844
------------ ------------
Total liabilities and stockholder's equity.................. $393,568,299 $359,814,454
============ ============
</TABLE>

See accompanying notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
<S> <C> <C>
REVENUES
Policyholder fees............................................ $16,433,269 $14,825,696
Premiums..................................................... 7,630,182 8,141,342
Investment income (note 2)................................... 8,835,356 8,470,643
Realized gain (loss) on fixed securities (259,987) 318,372
Other income................................................. 701,355 654,608
----------- -----------
Total income............................................... 33,340,175 32,410,661
----------- -----------
BENEFITS AND EXPENSES
Benefits and increases in contract liabilities............... 14,297,499 13,118,328
Dividends to policyholders................................... 910,754 985,756
Amortization of deferred acquisition costs (note 6) ......... 1,573,216 1,528,876
Commissions and general expenses............................. 13,513,644 13,212,536
----------- -----------
Total benefits and expenses................................ 30,295,113 28,845,496
----------- -----------
Income before Federal income tax, and cumulative
effect of a change in accounting principle................... 3,045,062 3,565,165
Federal income tax (note 7):
Current...................................................... 838,000 1,425,000
Deferred..................................................... (352,000) (721,000)
----------- -----------
486,000 704,000
----------- -----------
Income before cumulative effect
of a change in accounting principle.......................... 2,559,062 2,861,165
Cumulative effect on prior years
of a change in accounting principle (note 7)................. -- 540,000
----------- -----------
Net Income..................................................... $ 2,559,062 $ 3,401,165
=========== ===========
Income per share, based on 534,350 shares outstanding
Income before cumulative effect
of a change in accounting principle.......................... $4.79 $5.35
Cumulative effect of a change in accounting principle -- 1.01
----------- -----------
$4.79 $6.36
=========== ===========
</TABLE>

See accompanying notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
<S> <C> <C>
Balance at beginning of year................................... $ 34,173,844 $ 27,722,679
Net income..................................................... 2,559,062 3,401,165
Increase (decrease) in unrealized holding gains on
available-for-sale securities................................ (5,536,000) 3,050,000
------------ ------------
Balance at end of year......................................... $ 31,196,906 $ 34,173,844
============ ============
</TABLE>

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
<S> <C> <C>
Increase (decrease) in cash:
Cash flows from operating activities:
Policyholder fees received............................. $ 16,433,269 $ 14,825,696
Premiums received...................................... 7,366,276 7,996,528
Amounts received on policyholder accounts.............. 63,526,544 52,654,219
Investment income received............................. 8,886,847 8,583,133
Other receipts......................................... 46,581 44,193
Benefits and contract liabilities paid................. (75,131,495) (61,360,490)
Commissions and general expenses paid.................. (15,252,935) (15,866,354)
------------ ------------
Net cash provided by (used for) operating activities... 5,874,988 6,876,905
------------ ------------

Cash flows from investing activities:
Proceeds from sale of investment securities.............. 36,751,082 36,063,998
Purchase of investment securities........................ (42,164,770) (39,148,690)
Purchase of furniture, equipment and other assets........ (67,121) (40,227)
Net increase in policy loans............................. (1,801,780) (1,941,256)
------------ ------------
Net cash provided by (used for) investing activities..... (7,282,589) (5,066,175)
------------ ------------
Net increase (decrease) in cash.......................... (1,407,601) 1,810,730
Cash
Beginning of year........................................ 2,384,714 573,984
------------ ------------
End of year.............................................. $ 977,113 $ 2,384,714
============ ============
</TABLE>

The Company paid Federal income tax of $1,368,000 in 1994 and $1,265,000 in
1993.

See accompanying notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
<S> <C> <C>
Reconciliation of net income to net cash
provided by (used for) operating activities:
Net income............................................... $ 2,559,062 $ 3,401,165
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization.......................... 122,199 118,365
Amortization of deferred policy acquisition costs...... 1,573,216 1,528,876
Realized investment (gains) losses..................... 259,987 (318,372)
Amortization of premiums and discounts on fixed
maturities........................................... 287,340 299,666
Deferred Federal income taxes.......................... (352,000) (721,000)
Cumulative effect of a change in
accounting principle................................. -- (540,000)
Other items not requiring cash - net................... (149) (1,908)
(Increase) decrease in:
Premiums and other receivables, net.................... (1,055,910) 1,683,261
Accrued investment income.............................. (235,849) (187,196)
Deferred policy acquisition costs, exclusive
of amortization...................................... (1,138,988) (1,254,547)
Other assets........................................... (30,882) (13,108)
Increase (decrease) in:
Policyholder account balances.......................... 2,719,458 1,268,788
Claims and other contract liabilities.................. 503,025 1,903,908
Accounts payable and accrued liabilities............... (664,479) (290,993)
----------- -----------
$ 5,874,988 $ 6,876,905
=========== ===========
</TABLE>

See accompanying notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS

Note 1 -- Basis of Financial Statements

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles (GAAP). Such basis of presentation
differs from statutory accounting practices permitted or prescribed by insurance
regulatory authorities primarily in that:

(a) policy reserves are computed according to the Company's estimates of
mortality, investment yields, withdrawals and other benefits and expenses,
rather than on the statutory valuation basis;

(b) certain expenditures, principally for furniture and equipment and
agents' debit balances, are recognized as assets rather than being non-admitted
and therefore charged to retained earnings;

(c) commissions and other costs of acquiring new business are recognized as
deferred acquisition costs and are amortized over the premium paying period of
policies and contracts, rather than charged to current operations when incurred;

(d) income tax effects of temporary differences, relating primarily to
policy reserves and acquisition costs, are provided;

(e) the statutory asset valuation and interest maintenance reserves are
reported as retained earnings rather than as liabilities;

Note 2 -- Other Significant Accounting Practices

(a) Depreciation. Depreciation is computed on the useful service life of
the depreciable asset using the straight line method of depreciation.

(b) Investments. The Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting For Certain Investments in Debt and Equity
Securities" ("SFAS 115"), effective December 31, 1993. SFAS 115 requires that
investments in equity securities that have readily determinable fair values and
all investments in debt securities be classified in three separate categories
and accounted for as follows:

HELD-TO-MATURITY SECURITIES

Debt securities the Company has the positive intent and ability to
hold to maturity are recorded at amortized cost.

TRADING SECURITIES

Debt and equity securities that are held principally for the purpose
of selling such securities in the near term are recorded at fair value
with unrealized gains and losses included in earnings.

AVAILABLE-FOR-SALE SECURITIES

Debt and equity securities not classified in the other two categories
are recorded at fair value with unrealized gains and losses excluded
from earnings and reported as "unrealized holding gains or losses on
available-for-sale securities" in stockholder's equity.

Short term investments are reported at market value which approximates
cost.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Gains and losses on sales of investments are determined using the specific
identification method. Investment income for the years indicated consists of the
following:

YEAR ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- ----------------
Interest on fixed maturities........ $8,091,627 $7,844,723
Interest on short term investments.. 225,682 232,244
Interest on policy loans............ 886,465 771,082
Dividends on equity securities...... 10,220 --
---------- ----------
Total investment income........... 9,213,994 8,848,049
Investment expense................ 378,638 377,406
---------- ----------
Net investment income............... $8,835,356 $8,470,643
========== ==========

The amortized cost and estimated market values of investments at December
31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Available-For-Sale Securities
- -----------------------------
December 31, 1994
- -----------------
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies............................ $ 49,362,608 $ 5,901 $1,541,620 $ 47,826,889
Debt Securities issued by
States of the U.S....................... 3,910,143 -- 379,945 3,530,198
Corporate Debt Securities................. 53,768,481 86,359 2,578,037 51,276,803
Other Debit Securities.................... 873,777 1,801 96,461 779,117
Equity Securities......................... 500,000 -- 15,000 485,000
------------ ---------- ---------- ------------
$108,415,009 $ 94,061 $4,611,063 $103,898,007
============ ========== ========== ============
December 31, 1993
- ----------------
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies............................ $ 49,405,229 $2,528,521 $ -- $ 51,933,750
Debt Securities issued by
States of the U.S....................... 4,085,000 26,292 -- 4,111,292
Corporate Debt Securities................. 49,330,996 2,110,508 100,808 51,340,696
Other Debt Securities..................... 1,376,028 59,285 -- 1,435,313
------------ ---------- ---------- ------------
$104,197,253 $4,724,606 $ 100,808 $108,821,051
============ ========== ========== ============
</TABLE>

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

At December 31, 1994 and 1993, the Company recognized "Unrealized Holding
Gains (Losses) on Available-For-Sale Securities" of ($2,981,000) and $3,050,000,
net of applicable deferred income taxes and amortization of deferred acquisition
costs. The change in the Unrealized Holding Gains (Losses) of ($5,536,000) and
$3,050,000 for 1994 and 1993 respectively is reported as a separate component of
stockholders' equity.

<TABLE>
<CAPTION>
Held-To-Maturity Securities
- ---------------------------
December 31, 1994
- ----------------
<S> <C> <C> <C> <C>
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies............................ $3,380,367 $ 4,873 $ 56,807 $3,328,433
Corporate Debt Securities................. 2,000,000 -- 324,020 1,675,980
Other Debt Securities..................... 610,000 -- -- 610,000
---------- -------- -------- ----------
$5,990,367 $ 4,873 $380,827 $5,614,413
========== ======== ======== ==========

December 31, 1993
- ----------------
U.S. Treasury Securities and obligations
of U.S. Government Corporations
and Agencies............................ $3,163,791 $121,583 $ 124 $3,285,250
Corporate Debt Securities................. 2,000,000 -- -- 2,000,000
Other Debt Securities..................... 810,000 -- -- 810,000
---------- -------- -------- ----------
$5,973,791 $121,583 $ 124 $6,095,250
========== ======== ======== ==========
</TABLE>

The amortized cost and estimated market value of debt securities at
December 31, 1994, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
HELD TO MATURITY AVAILABLE FOR SALE
------------------------ --------------------------
AMORTIZED ESTIMATED AMORTIZED ESTIMATED
COST MARKET VALUE COST MARKET VALUE
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Due in one year or less................. $1,402,857 $1,406,636 $ 5,349,646 $ 5,338,348
Due after one year through five years... 2,005,617 1,975,524 54,476,425 54,091,139
Due after five years through ten years.. 581,893 556,273 43,764,673 40,099,497
Due after ten years..................... 2,000,000 1,675,980 4,324,265 3,884,023
---------- ---------- ------------ ------------
$5,990,367 $5,614,413 $107,915,009 $103,413,007
========== ========== ============ ============
</TABLE>

Proceeds from sales of investments in fixed maturities were $36,701,082 and
$35,352,716 in 1994 and 1993, respectively. Gross gains of $85,827 and gross
losses of $345,814 were realized on those sales in 1994. Gross gains of $397,829
and gross losses of $79,457 were realized on those sales in 1993.

TRADITIONAL ORDINARY LIFE AND HEALTH

Revenues from the traditional life insurance policies represent
premiums which are recognized as earned when due. Health insurance premiums
are recognized as revenue over the time period to which the premiums
relate. Benefits and expenses are associated with earned premiums so as to
result in recognition of profits over the lives of the contracts. This
association is accomplished by means of the provision for liabilities for
future policy benefits and the deferral and amortization of policy
acquisition costs.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

UNIVERSAL LIFE AND VARIABLE LIFE

Revenues from universal life and variable life policies represent
amounts assessed against policyholders. Included in such assessments are
mortality charges, surrender charges and policy service fees.

Policyholder account balances on universal life consist of the
premiums received plus credited interest, less accumulated policyholder
assessments. Amounts included in expense represent benefits in excess of
policyholder account balances. The value of policyholder accounts on
variable life are included in separate account liabilities as discussed
below.

ANNUITIES

Revenues from annuity contracts represent amounts assessed against
contractholders. Such assessments are principally sales charges,
administrative fees, and in the case of variable annuities, mortality and
expense risk charges. The carrying value and fair value of fixed annuities
are equal to the policyholder account balances, which represent the net
premiums received plus accumulated interest.

(d) Separate Accounts. Separate account assets and the related liabilities,
both of which are valued at market, represent segregated variable annuity and
variable life contracts maintained in accounts with individual investment
objectives. All investment income (gains and losses of these accounts) accrues
directly to the contractholders and therefore does not affect net income of the
Company.

(e) Reclassifications. Certain reclassifications have been made to the 1993
Financial Statements in order to conform to the 1994 presentation.

Note 3 -- Fair Value of Financial Instruments

The carrying amounts for cash, short-term investments and policy loans as
reported in the accompanying balance sheet approximate their fair values. The
fair values for fixed maturities and equity-securities are based upon quoted
market prices, where available or are estimated using values from independent
pricing services.

The carrying amounts for the Company's liabilities under investment-type
contracts approximate their fair values because interest rates credited to
account balances approximate current rates paid on similar investments and are
generally not guaranteed beyond one year. Fair values for the Company's
insurance contracts other than investment-type contracts are not required to be
disclosed. However, the fair values of liabilities for all insurance contracts
are taken into consideration in the overall management of interest rate risk,
which minimizes exposure to changing interest rates.

Note 4 -- Retirement Plans

The Company has a non-contributory profit sharing plan for the benefit of
its employees which provides for retirement benefits based upon earnings.
Vesting of benefits is based upon years of service. The Company did not make
profit sharing contributions in 1994 and 1993.

The Company also has a non-contributory retirement plan for the benefit of
its sales agents. The plan provides for retirement benefits based upon
commission on first-year premiums and length of service. The plan is unfunded.
Vesting of benefits is based upon graduated percentages dependent upon the
number of allocations made in accordance with the plan by the Company for each
participant. The Company charged to operations pension expenses of approximately
$312,000 in 1994 and $292,000 in 1993. The accrued liability of approximately
$2,415,000 in 1994 and $2,194,600 in 1993 was sufficient to cover the value of
benefits provided by the plan.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 5 -- Commitments and Contingent Liabilities

The Company has agreements with affiliates and non-affiliates as follows:

(a) The Company's maximum retention on any one life is $100,000. The
Company reinsures a portion of its risk with other insurance companies and
reserves are reduced by the amount of reserves for such reinsured risks. The
Company is liable for any obligations which any reinsurance company may be
unable to meet. The Company had reinsured approximately 10% of its net life
insurance in force at December 31, 1994 and 1993. The Company also had assumed
reinsurance amounting to approximately 21% and 22% of its net life insurance in
force at the respective year ends. None of these transactions had any material
effect on the Company's operating results.

(b) The Company and certain affiliates share office space, data processing
facilities and management personnel. Charges for these services are based upon
space occupied, usage of data processing facilities and time allocated to
management. During the years ended December 31, 1994 and 1993, the Company paid
approximately $1,099,000 and $1,187,000, respectively, for these services. In
addition, the Company reimbursed an affiliate approximately $196,000 in 1993 for
its share of the cost of the branch offices and approximately $6,651,000 in 1994
and $5,510,000 in 1993 for commissions relating to the sale of its products.

(c) The Company is subject to certain claims and lawsuits arising in the
ordinary course of business. In the opinion of management, all such claims
currently pending will not have a material adverse effect on the financial
position of the Company or its results of operations.

Note 6 -- Adjustments Made to Statutory Accounting Practices

Note 1 describes some of the common differences between statutory practices
and generally accepted accounting principles. The effects of these differences
for the years ended December 31, 1994 and 1993 are shown in the following table
in which net income and capital shares and surplus reported therein on a
statutory basis are adjusted to a GAAP basis.

<TABLE>
<CAPTION>
NET INCOME CAPITAL SHARES AND SURPLUS
YEAR ENDED DECEMBER 31 AT DECEMBER 31
-------------------------- ------------------------------
1994 1993 1994 1993
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Reported on a statutory basis............... $2,205,814 $1,682,537 $18,020,531 $15,933,807
---------- ---------- ----------- -----------
Adjustments:
Deferred policy acquisition costs (b)..... (434,228) (274,329) 19,321,891 19,006,119
Future policy benefits (a)................ 727,849 669,990 (3,334,870) (4,062,719)
Deferred income taxes..................... 352,000 1,261,435 (1,884,000) (1,322,799)
Premiums due and deferred (e)............. 70,968 11,558 (1,524,702) (1,595,669)
Cost of collection and other statutory
liabilities............................. (32,454) 8,598 65,585 98,039
Non-admitted assets....................... -- -- 385,500 423,038
Asset valuation reserve................... -- -- 901,041 744,264
Interest maintenance reserve.............. (71,048) (222,809) (5,070) 325,965
Gross unrealized holding gains (losses) on
available-for-sale securities........... -- -- (4,517,000) 4,623,799
Net realized capital gains (losses)....... (259,987) 262,712 -- --
Other..................................... 148 1,473 -- --
---------- ---------- ----------- -----------
353,248 1,718,628 13,176,375 18,240,037
---------- ---------- ----------- -----------
In accordance with generally accepted
accounting principles..................... $2,559,062 $3,401,165 $31,196,906 $34,173,844
========== ========== =========== ===========
Per share, based on 534,350 shares
outstanding............................... $4.79 $6.36 $58.38 $63.95
========== ========== =========== ===========
</TABLE>

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The following is a description of the significant policies used to adjust
the net income and capital shares and surplus from a statutory to a GAAP basis.

(a) Liabilities for future policy benefits have been computed primarily by
the net level premium method with assumptions as to anticipated mortality,
withdrawals and investment yields. The composition of the policy liabilities and
the more significant assumptions pertinent thereto are presented below:

<TABLE>
<CAPTION>
DISTRIBUTION OF LIABILITIES* BASIS OF ASSUMPTIONS
- --------------------------------------------------- ----------------------------------------------------
1994 1993 YEARS OF ISSUE INTEREST MORTALITY TABLE WITHDRAWAL
---- ---- -------------- -------- ---------------------------------- ----------
<S> <C> <C> <C> <C> <C>
Non-par:
$ 1,721,636 $ 1,746,952 1962-1967 4 1/2% 1955-60 Basic Select plus Ultimate Linton B
5,764,026 5,889,653 1968-1988 5 1/2% 1955-60 Basic Select plus Ultimate Linton B
2,583,886 2,551,830 1984-1988 7 1/2% 85% of 1965-70 Basic Select Modified
plus Ultimate Linton B
62,830 51,486 1989-Present 7 1/2% 1975-80 Basic Select plus Ultimate Linton B
99,022 86,776 1989-Present 7 1/2% 1975-80 Basic Select plus Ultimate Actual
41,021 44,040 1989-Present 8% 1975-80 Basic Select plus Ultimate Actual
31,043,074 29,886,814 1985-Present 6% Accumulation of Funds --

Par:
232,295 233,940 1966-1967 4 1/2% 1955-60 Basic Select plus Ultimate Linton A
13,696,383 13,238,049 1968-1988 5 1/2% 1955-60 Basic Select plus Ultimate Linton A
1,037,503 973,551 1981-1984 7 1/4% 90% of 1965-70 Basic Select
plus Ultimate Linton B
4,634,783 4,457,912 1983-1988 9 1/2% 80% of 1965-70 Basic Select
plus Ultimate Linton B
9,922,152 7,509,240 1990-Present 8% 66% of 1975-80 Basic Select
plus Ultimate Linton B
Annuities:
32,707,541 35,905,357 1976-Present 5 1/2% Accumulation of Funds --

Miscellaneous:
12,776,574 11,081,764 1962-Present 2 1/2%-3 1/2% 1958-CSO None
</TABLE>

- ----------
* The above amounts are before deduction of deferred premiums of $1,065,962
in 1994 and $1,120,058 in 1993.

(b) The costs of acquiring new business, principally commissions and
related agency expenses, and certain costs of issuing policies, such as medical
examinations and inspection reports, all of which vary with and are primarily
related to the production of new business, have been deferred. Costs deferred on
universal life and variable life are amortized as a level percentage of the
present value of anticipated gross profits resulting from investment yields,
mortality and surrender charges. Costs deferred on traditional ordinary life and
health are amortized over the premium-paying period of the related policies in
proportion to the ratio of the annual premium revenue to the total anticipated
premium revenue. Anticipated premium revenue was estimated using the same
assumptions which were used for computing liabilities for future policy
benefits. Amortization of $1,573,216 in 1994 and $1,528,876 in 1993 was charged
to operations.

(c) Participating business represented 11.9% and 12.4% of individual life
insurance in force at December 31, 1994 and 1993, respectively.

The Board of Directors annually approves a dividend formula for calculation
of dividends to be distributed to participating policyholders.

The portion of earnings of participating policies that can inure to the
benefit of shareholders is limited to the larger of 10% of such earnings or $.50
per thousand dollars of participating insurance in force. Earnings in excess of
that limit must be excluded from shareholders' equity by a charge against
operations. No such charge has been made, since participating business has
operated at a loss to date on a statutory basis. It is anticipated, however,
that the participating lines will be profitable over the lives of the policies.

(d) New York State insurance law prohibits the payment of dividends to
stockholders from any source other than the statutory unassigned surplus. The
amount of said surplus was $8,235,339 and $6,148,130 at December 31, 1994 and
1993, respectively.

(e) Statutory due and deferred premiums are adjusted to conform to the
expected premium revenue used in computing future benefits and deferred policy
acquisition costs. In this regard, the GAAP due premium is recorded as an asset
and the GAAP deferred premium is applied against future policy benefits.

<PAGE>

FIRST INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Note 7 -- Federal Income Taxes

The Company joins with its parent company and other affiliated companies in
filing a consolidated Federal income tax return. The provision for Federal
income taxes is determined on a separate company basis.

Retained earnings at December 31, 1994 included approximately $146,000
which is defined as "policyholders' surplus" and may be subject to Federal
income tax at ordinary corporate rates under certain future conditions,
including distributions to stockholders.

The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting For Income Taxes" ("SFAS 109"), effective January 1, 1993. SFAS 109
is an asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's financial statements or tax returns.
Financial statements for the prior years have not been restated and the
cumulative effect of the accounting change as of January 1, 1993 was to increase
earnings by $540,000. This amount is reflected in the 1993 accompanying
Statement of Income as the cumulative effect of a change in accounting
principle. It primarily represents the impact of adjusting deferred taxes to
reflect the current tax rate of 34% as opposed to the tax rates that were in
effect when the deferred taxes were originally recorded.

Deferred tax liabilities (assets) are comprised of the following:

1994 1993
------------ ------------
Policyholder dividend provision................... $ (309,818) $ (317,722)
Non-qualified agents' pension plan reserve........ (967,466) (890,532)
Deferred policy acquisition costs................. 3,521,550 4,061,347
Future policy benefits............................ (2,862,789) (3,111,454)
Bond discount..................................... 20,182 13,534
Unrealized holding gains (losses)
on Available-For-Sale Securities................ (1,281,000) 1,573,798
Other............................................. (4,659) (6,172)
----------- -----------
$ 1,884,000 $ 1,322,799
=========== ===========

The currently payable Federal Income tax provision of $838,000 for 1994 is
net of a $102,000 Federal tax benefit resulting from a capital loss carry back
of $259,987.

A reconciliation of the Federal statutory income tax rate to the Company's
effective tax rate is as follows:
1994 1993
---- ----
Application of statutory tax rate................... 34% 34%
Special tax deduction for life insurance companies.. (18) (16)
Other............................................... - 2
--- ---
16% 20%
=== ===

<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
First Investors Life Insurance Company
New York, New York

We have audited the statement of assets and liabilities of First Investors
Life Level Premium Variable Life Insurance (a separate account of First
Investors Life Insurance Company, registered as a unit investment trust under
the Investment Company Act of 1940), as of December 31, 1994, and the related
statement of operations for the year then ended and changes in net assets for
each of the two years in the period then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Investors Life Level
Premium Variable Life Insurance as of December 31, 1994, and the results of its
operations for the year then ended and the changes in its net assets for each of
the two years in the period then ended, in conformity with generally accepted
accounting principles.

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
February 21, 1995

<PAGE>

FIRST INVESTORS LIFE
LEVEL PREMIUM VARIABLE LIFE INSURANCE

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1994

ASSETS
Investments at net asset value (Note 3):
First Investors Life Series Fund ....................... $74,481,771

LIABILITIES
Payable to First Investors Life Insurance Company ........ 2,110,584
-----------
NET ASSETS ................................................. $72,371,187
===========
Net assets represented by Contracts ........................ $72,371,187
===========

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1994

INVESTMENT INCOME
Income:
Dividends ............................................. $ 1,701,408
-----------
Total income ........................................ 1,701,408
-----------
Expenses:
Cost of insurance charges (Note 4) .................... 2,282,737
Mortality and expense risks (Note 4) .................. 349,558
-----------
Total expenses ...................................... 2,632,295
-----------
NET INVESTMENT LOSSES ..................................... (930,887)
-----------
UNREALIZED APPRECIATION ON INVESTMENTS
Beginning of year ....................................... 8,605,598
End of year ............................................. 5,684,606
-----------
Change in unrealized appreciation on investments .......... (2,920,992)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ...... $(3,851,829)
===========

See notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE
LEVEL PREMIUM VARIABLE LIFE INSURANCE

STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31,

1994 1993
----------- -----------
Increase (Decrease) in Net Assets
From Operations
Net investment income (loss) ............... $ (930,887) $ 860,676
Change in unrealized appreciation
on investments............................ (2,920,992) 5,563,208
----------- -----------
Net increase (decrease) in net assets
resulting from operations ................ (3,851,879) 6,423,884
----------- -----------
From Unit Transactions
Net insurance premiums ..................... 20,555,397 17,890,358
Contract payments .......................... (8,253,343) (8,587,789)
----------- -----------
Net increase in net assets derived
from unit transactions ................... 12,302,054 9,302,569
----------- -----------
Net increase in net assets ................. 8,450,175 15,726,453

Net Assets
Beginning of year ........................... 63,921,012 48,194,559
----------- -----------
End of year ................................. $72,371,187 $63,921,012
=========== ===========

See notes to financial statements.

<PAGE>

FIRST INVESTORS LIFE
LEVEL PREMIUM VARIABLE LIFE INSURANCE

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994

Note 1 -- Organization

First Investors Life Level Premium Variable Life Insurance (Separate
Account B), a unit investment trust registered under the Investment Company Act
of 1940 (the 1940 Act), is a segregated investment account established by First
Investors Life Insurance Company (FIL). Assets of the Separate Account B have
been used to purchase shares of First Investors Life Series Fund (The Fund), an
open-end diversified management investment company registered under the 1940
Act.

Note 2 -- Significant Accounting Policies

INVESTMENTS

Shares of the Fund held by Separate Account B are valued at net asset
value per share. All distributions received from the Fund are reinvested to
purchase additional shares of the Fund at net asset value.

NET ASSETS REPRESENTED BY CONTRACTS

The net assets represented by contracts represents the cash value of
the policyholder accounts which is the estimated liability for future
policy benefits. The liability for future policy benefits is computed based
upon assumptions as to anticipated mortality, withdrawals and investment
yields. The mortality assumption is based upon the 1975-80 Basic Select
plus Ultimate mortality table.

FEDERAL INCOME TAXES

Separate Account B is not taxed separately because its operations are
part of the total operations of FIL, which is taxed as a life insurance
company under the Internal Revenue Code. Separate Account B will not be
taxed as a regulated investment company under Subchapter M of the Code.
Under existing Federal income tax law, no taxes are payable on the
investment income or on the capital gains of Separate Account B.

Note 3 -- Investments

Investments consist of the following:

<TABLE>
<CAPTION>
NET ASSET MARKET
SHARES VALUE VALUE COST
--------- ------ ----------- -----------
<S> <C> <C> <C> <C>
First Investors Life
Series Fund
Cash Management ....... 1,278,618 $ 1.00 $ 1,278,618 $ 1,278,618
High Yield ............ 2,228,425 10.58 23,587,190 23,878,448
Growth ................ 693,452 16.73 11,600,467 10,394,496
Discovery ............. 556,800 19.86 11,060,355 9,492,816
Blue Chip ............. 891,224 13.75 12,255,449 10,721,550
International Securities 929,760 13.51 12,560,403 10,819,067
Government ............ 57,849 9.70 561,297 595,539
Investment Grade ...... 112,881 10.31 1,163,786 1,192,131
Utility Income ......... 45,074 9.19 414,206 424,500
----------- -----------
$74,481,771 $68,797,165
=========== ===========
</TABLE>

The High Yield Series' investments in high yield securities whether rated
or unrated may be considered speculative and subject to greater market
fluctuations and risks of loss of income and principal than lower yielding,
higher rated, fixed income securities.

Note 4 -- Mortality and Expense Risks and Deductions

In consideration for its assumption of the mortality and expense risks
connected with the Variable Life Contracts, FIL deducts an amount equal on an
annual basis to .50% of the daily net asset value of Separate Account B. The
deduction for the year ended December 31, 1994 was $349,558.

A monthly charge is also made to Separate Account B for the cost of
insurance protection. This amount varies with the age and sex of the insured and
the net amount of insurance at risk. For further discussion, see "Cost of
Insurance Protection" in the Prospectus. For the year ended December 31, 1994
cost of insurance charges amounted to $2,282,737.

<PAGE>

TABLE OF CONTENTS
- ------------------------------------------------------
General Description............................... 2
Charges and Expenses.............................. 6
The Variable Life Policy.......................... 8
Illustrations of Death Benefits,
Cash Values and Accumulated Premiums............ 17
Federal income Tax Status......................... 22
Voting Rights..................................... 23
Officers and Directors of
First Investors Life Insurance Company.......... 24
Distribution of Policies.......................... 26
Custodian......................................... 26
Reports........................................... 26
State Regulation.................................. 26
Experts........................................... 27
Relevance of Financial Statements................. 27
Appendix I -- Other Policy Provisions............. 27
Appendix II -- Additional Illustrations of Death
Benefits, Cash Values and
Accumulated Premiums............................ 29
Financial Statements of First Investors Life...... 33
Financial Statements of Separate Account B........ 45

LIFE 318

<PAGE>

FIRST INVESTORS
LIFE SERIES FUND
- --------------------------------------------------------------------------------

Blue Chip Series
Cash Management Series
Discovery Series
Government Series
Growth Series
High Yield Series
International Securities Series
Investment Grade Series
Target Maturity 2007 Series
Utilities Income Series

Prospectus
- --------------------------------------------------------------------------------

May 1, 1995

[LOGO] First Investors

<PAGE>

First Investors Life Series Fund

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

This is a Prospectus for First Investors Life Series Fund ("Life Series
Fund"), an open-end, diversified management investment company. The Fund offers
ten separate investment series, each of which has different investment
objectives and policies: Blue Chip Fund, Cash Management Fund, Discovery Fund,
Government Fund, Growth Fund, High Yield Fund, International Securities Fund,
Investment Grade Fund, Target Maturity 2007 Fund and Utilities Income Fund
(each, a Fund, and collectively, "Funds"). Each Fund's investment objectives are
listed on the inside cover.

Investments in a Fund are made through purchases of the Level Premium
Variable Life Insurance Policies ("Policies") or the Individual Variable Annuity
Contracts ("Contracts") offered by First Investors Life Insurance Company
("First Investors Life"). Policy premiums, net of certain expenses, are paid
into a unit investment trust, First Investors Life Insurance Company Separate
Account B ("Separate Account B"). Purchase payments for the Contracts, net of
certain expenses, are also paid into a unit investment trust, First Investors
Life Variable Annuity Fund C ("Separate Account C"). Separate Account B and
Separate Account C ("Separate Accounts") pool these proceeds to purchase shares
of a Fund designated by purchasers of the Policies or Contracts. Investments in
the Fund are used to fund benefits under the Policies and Contracts. Target
Maturity 2007 Fund is only offered to Contractowners of Separate Account C.

An investment in Life Series Fund, including Cash Management Fund, is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Cash Management Fund will be able to maintain a stable net asset value
of $1.00 per share. Investments by the High Yield Fund in high-yield, high risk
securities, commonly referred to as "junk bonds," may entail risks that are
different or more pronounced than those that would result from investment in
higher-rated securities. See "High Yield Securities--Risk Factors."

This Prospectus sets forth concisely the information about the Funds
that a prospective investor should know before investing and should be retained
for future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Funds. A Statement of Additional
Information ("SAI"), dated October 13, 1995 (which is incorporated by reference
herein), has been filed with the Securities and Exchange Commission. The SAI is
available at no charge upon request to the Funds at the address or telephone
number indicated above.

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

An investment in these securities is not a deposit or obligation of, or
guaranteed or endorsed by, any bank and is not federally insured or protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other governmental agency.

The date of this Prospectus is October 13, 1995

<PAGE>

The investment objectives of each Fund of Life Series Fund offered by
this Prospectus are as follows:

Blue Chip Fund. The investment objective of the Fund is to seek high
total investment return consistent with the preservation of capital. This goal
will be sought by investing, under normal market conditions, primarily in equity
securities of larger, well-capitalized companies with high potential earnings
growth that have shown a history of dividend payments, commonly known as "Blue
Chip" companies.

Cash Management Fund. The objective of the Fund is to seek to earn a
high rate of current income consistent with the preservation of capital and
maintenance of liquidity. The Cash Management Fund will invest in money market
obligations, including high quality securities issued or guaranteed by the U.S.
Government or its agencies and instrumentalities, bank obligations and high
grade corporate instruments.

Discovery Fund. The investment objective of the Fund is to seek
long-term capital appreciation, without regard to dividend or interest income,
through investment in the common stock of companies with small to medium market
capitalization that the Adviser considers to be undervalued or less well known
in the current marketplace and to have the potential for capital growth.

Government Fund. The investment objective of the Fund is to seek to
achieve a significant level of current income which is consistent with security
and liquidity of principal by investing, under normal market conditions,
primarily in obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies or instrumentalities, including
mortgage-related securities.

Growth Fund. The investment objective of the Fund is to seek long-term
capital appreciation. This goal will be sought by investing, under normal market
conditions, primarily in common stocks of companies and industries selected for
their growth potential.

High Yield Fund. The primary objective of the Fund is to seek to earn a
high level of current income. The Fund actively seeks to achieve its secondary
objective of capital appreciation to the extent consistent with its primary
objective. The Fund seeks to attain its objectives primarily through investments
in lower-grade, high-yielding, high risk debt securities, commonly referred to
as "junk bonds" ("High Yield Securities").

International Securities Fund. The primary objective of the Fund is to
seek long-term capital growth. As a secondary objective, the Fund seeks to earn
a reasonable level of current income. These objectives are sought, under normal
market conditions, through investment in common stocks, rights and warrants,
preferred stocks, bonds and other debt obligations issued by companies or
governments of any nation, subject to certain restrictions with respect to
concentration and diversification.

Investment Grade Fund. The investment objective of the Fund is to seek
a maximum level of income consistent with investment in investment grade debt
securities.

Target Maturity 2007 Fund. The investment objective of the Fund is to
seek a predictable compounded investment return for investors who hold their
Fund shares until the Fund's maturity, consistent with preservation of capital.
The Fund will seek its objective by investing, under normal market conditions,
at least 65% of its total assets in zero coupon securities which are issued by
the U.S. Government, its agencies or instrumentalities or created by third
parties using securities issued by the U.S. Government, its agencies or
instrumentalities. The Fund intends to terminate in the year 2007. As a result

<PAGE>

of the volatile nature of the market for zero coupon securities, the value of
Fund shares prior to the Fund's maturity may fluctuate significantly in price.
Thus, to achieve a predictable return, investors should hold their investments
in the Fund until the Fund liquidates since the Fund's value changes daily with
market conditions. Accordingly, any investor who redeems his or her shares prior
to the Fund's maturity is likely to achieve a different investment result than
the return that was predicted on the date the investment was made, and may even
suffer a significant loss.

Utilities Income Fund. The primary investment objective of Utilities
Income Fund is to seek high current income. Long-term capital appreciation is a
secondary objective. These objectives are sought, under normal market
conditions, through investment in equity and debt securities issued by companies
primarily engaged in the public utilities industry.

There can be no assurance that any Fund will achieve its investment
objectives. See "Investment Objectives and Policies" for a detailed description
of each Fund's investment objectives and policies.

<PAGE>

FINANCIAL HIGHLIGHTS

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

- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
-------------------------------------- -----------------------
Net Realized
Net Asset Value Net and Unrealized Total from Net Net
Beginning of Investment Gain(Loss) Investment Investment Realized Total Net Asset Value
Period Income on Investments Operations Income Gains Distributions End of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Blue Chip
- ---------
3/8/90* to 12/31/90 ..... $ 10.00 $ .07 $ (.02) $ .05 $ -- $ -- $ -- $ 10.05
1991 .................... 10.05 .12 2.50 2.62 .05 -- .05 12.62
1992 .................... 12.62 .16 .67 .83 .21 -- .21 13.24
1993 .................... 13.24 .15 .97 1.12 .15 -- .15 14.21
1994 .................... 14.21 .18 (.39) (.21) .08 .17 .25 13.75
1/1/95 to 6/30/95 ....... 13.75 .13 2.20 2.33 .19 .95 1.14 14.94
Cash Management
- ---------------
1990 .................... 1.00 .072 -- .072 .072 -- .072 1.00
1991 .................... 1.00 .054 -- .054 .054 -- .054 1.00
1992 .................... 1.00 .029 -- .029 .029 -- .029 1.00
1993 .................... 1.00 .027 -- .027 .027 -- .027 1.00
1994 .................... 1.00 .037 -- .037 .037 -- .037 1.00
1/1/95 to 6/30/95 ....... 1.00 .027 -- .027 .027 -- .027 1.00
Discovery
- ---------
1990 .................... 12.40 .14 (.78) (.64) .15 .90 1.05 10.71
1991 .................... 10.71 .07 5.42 5.49 .18 -- .18 16.02
1992 .................... 16.02 -- 2.51 2.51 .03 .15 .18 18.35
1993 .................... 18.35 -- 3.92 3.92 -- .91 .91 21.36
1994 .................... 21.36 .06 (.62) (.56) -- .94 .94 19.86
1/1/95 to 6/30/95 ....... 19.86 .05 2.78 2.83 .06 1.26 1.32 21.37
Government
- ----------
1/7/92* to 12/31/92 ..... 10.00 .47 .51 .98 .33 -- .33 10.65
1993 .................... 10.65 .64 (.02) .66 .70 .19 .89 10.42
1994 .................... 10.42 .79 (1.21) (.42) .25 .05 .30 9.70
1/1/95 to 6/30/95 ....... 9.70 .32 .57 .89 .62 -- .62 9.97
</TABLE>

- ----------------
* Commencement of operations
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through June 30, 1995.
++ The effect of fees and charges incurred at the separate account level are
not reflected in these performance figures.
(a) Annualized

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets
Ratio to Average Net Assets+ Before Expenses Waived or Assumed
Net Assets ---------------------------- --------------------------------- Portfolio
Total End of Period Net Investment Net Investment Turnover
Return++(%) (in thousands) Expenses+(%) Income(%) Expenses(%) Income(%) Rate(%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Blue Chip
- ---------
3/8/90* to 12/31/90 ..... .61(a) $ 3,656 -- 2.95(a) 1.92(a) 1.03(a) 15
1991 .................... 26.17 13,142 1.00 1.88 1.55 1.34 21
1992 .................... 6.67 23,765 .79 1.66 .86 1.60 40
1993 .................... 8.51 34,030 .88 1.27 N/A N/A 37
1994 .................... (1.45) 41,424 .88 1.49 N/A N/A 82
1/1/95 to 6/30/95 ....... 17.90 52,232 .85(a) 2.10(a) N/A N/A 10
Cash Management
- ---------------
1990 .................... 7.49 8,203 .39 6.90 1.15 6.15 N/A
1991 .................... 5.71 9,719 .57 5.39 .93 5.03 N/A
1992 .................... 3.02 8,341 .79 2.99 .98 2.81 N/A
1993 .................... 2.70 4,243 .60 2.67 1.05 2.22 N/A
1994 .................... 3.77 3,929 .60 3.69 1.04 3.25 N/A
1/1/95 to 6/30/95 ....... 2.73 4,082 .59(a) 5.40(a) 1.04(a) 4.95(a) N/A
Discovery
- ---------
1990 .................... (5.47) 960 -- 2.97 2.68 .28 104
1991 .................... 51.73 4,661 .70 .48 1.49 (.31) 93
1992 .................... 15.74 10,527 .91 .02 1.05 (.12) 91
1993 .................... 22.20 21,221 .87 (.03) N/A N/A 69
1994 .................... (2.53) 30,244 .88 .36 N/A N/A 53
1/1/95 to 6/30/95 ....... 15.01 39,099 .85(a) .62(a) N/A N/A 31
Government
- ----------
1/7/92* to 12/31/92 ..... 9.95(a) 5,064 .03(a) 6.64(a) .89(a) 5.79(a) 301
1993 .................... 6.35 8,234 .35 6.60 .84 6.11 525
1994 .................... (4.10) 7,878 .35 6.74 .90 6.19 457
1/1/95 to 6/30/95 ....... 9.58 9,121 .35(a) 6.98(a) .91(a) 6.42(a) 106
</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
-----------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
--------------------------------- -----------------------
Net Realized
Net Asset Value Net and Unrealized Total from Net Net
Beginning of Investment Gain(Loss) Investment Investment Realized Total Asset Value
Period Income on Investments Operations Income Gains Distributions End of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth
- ------
1990...................... $13.02 $.16 $(.55) $(.39) $.06 $ -- $ .06 $12.57
1991...................... 12.57 .17 4.15 4.32 .18 -- .18 16.71
1992...................... 16.71 .08 1.41 1.49 .18 1.38 1.56 16.64
1993...................... 16.64 .07 .93 1.00 .09 .10 .19 17.45
1994...................... 17.45 .09 (.60) (.51) -- .21 .21 16.73
1/1/95 to 6/30/95......... 16.73 .09 2.45 2.54 .09 .29 .38 18.89
High Yield
- ----------
1990...................... 10.71 1.08 (1.79) (.71) .83 -- .83 9.17
1991...................... 9.17 1.16 1.66 2.82 1.18 -- 1.18 10.81
1992...................... 10.81 1.11 .21 1.32 1.69 -- 1.69 10.44
1993...................... 10.44 .96 .88 1.84 1.12 -- 1.12 11.16
1994...................... 11.16 .87 (1.14) (.27) .31 -- .31 10.58
1/1/95 to 6/30/95......... 10.58 .50 .64 1.14 .96 -- .96 10.76
International Securities
- ------------------------
4/16/90* to 12/31/90...... 10.00 .03 .34 .37 -- -- -- 10.37
1991...................... 10.37 .09 1.49 1.58 .03 .05 .08 11.87
1992...................... 11.87 .15 (.28) (.13) .15 .22 .37 11.37
1993...................... 11.37 .10 2.41 2.51 .14 -- .14 13.74
1994...................... 13.74 .14 (.32) (.18) .05 -- .05 13.51
1/1/95 to 6/30/95......... 13.51 .14 .88 1.02 .12 .25 .37 14.16
Investment Grade
- ----------------
1/7/92* to 12/31/92....... 10.00 .43 .44 .87 .34 -- .34 10.53
1993...................... 10.53 .65 .49 1.14 .71 .01 .72 10.95
1994...................... 10.95 .67 (1.06) (.39) .16 .09 .25 10.31
1/1/95 to 6/30/95......... 10.31 .34 .86 1.20 .53 -- .53 10.98
Utilities Income
- ----------------
11/15/93* to 12/31/93..... 10.00 .01 (.07) (.06) -- -- -- 9.94
1994...................... 9.94 .24 (.96) (.72) .03 -- .03 9.19
1/1/95 to 6/30/95......... 9.19 .14 0.89 1.03 .19 -- .19 10.03
</TABLE>

<PAGE>

- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets
Ratio to Average Net Assets+ Before Expenses Waived or Assumed
Net Assets ---------------------------- --------------------------------- Portfolio
Total End of Period Net Investment Net Investment Turnover
Return++(%) (in thousands) Expenses+(%) Income(%) Expenses(%) Income(%) Rate(%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth
- ------
1990...................... (2.99) 2,366 -- 3.03 1.64 1.40 28
1991...................... 34.68 7,743 .69 1.21 1.34 .55 148
1992...................... 9.78 16,385 .76 .75 1.20 .30 45
1993...................... 6.00 25,658 .91 .43 N/A N/A 51
1994...................... (2.87) 32,797 .90 .60 N/A N/A 40
1/1/95 to 6/30/95......... 15.46 41,232 .89(a) 1.09(a) N/A N/A 30
High Yield
- ----------
1990...................... (5.77) 18,331 -- 13.21 .91 12.30 35
1991...................... 33.96 23,634 .53 11.95 .89 11.60 40
1992...................... 13.15 24,540 .91 10.48 .96 10.43 84
1993...................... 18.16 30,593 .91 9.49 N/A N/A 96
1994...................... (1.56) 32,285 .88 9.43 N/A N/A 50
1/1/95 to 6/30/95......... 11.44 37,132 .85(a) 10.12(a) N/A N/A 34
International Securities
- ------------------------
4/16/90* to 12/31/90...... 5.21(a) 3,946 -- .99(a) 3.43(a) (2.43)(a) 29
1991...................... 15.24 8,653 1.70 .75 2.27 .18 70
1992...................... (1.13) 12,246 1.03 1.55 1.38 1.20 36
1993...................... 22.17 21,009 1.14 .97 N/A N/A 37
1994...................... (1.29) 31,308 1.03 1.22 N/A N/A 36
1/1/95 to 6/30/95......... 7.88 34,358 1.01(a) 2.09(a) N/A N/A 20
Investment Grade
- ----------------
1/7/92* to 12/31/92....... 8.91(a) 4,707 .23(a) 6.16(a) .93(a) 5.46(a) 72
1993...................... 10.93 10,210 .35 6.32 .85 5.82 64
1994...................... (3.53) 11,602 .37 6.61 .92 6.06 15
1/1/95 to 6/30/95......... 12.04 13,543 .50(a) 6.78(a) .90(a) 6.38(a) 19
Utilities Income
- ----------------
11/15/93* to 12/31/93..... (4.66)(a) 494 -- 1.46(a) 3.99(a) (2.52)(a) 0
1994...................... (7.24) 4,720 .17 4.13 .95 3.35 31
1/1/95 to 6/30/95......... 11.29 8,647 .34(a) 4.50(a) .85(a) 3.99(a) 9
</TABLE>

<PAGE>

Target Maturity 2007 Fund
April 25, 1995 to August 31, 1995
(Unaudited)

Per Share Data

Net Asset Value, Beginning of Period ........................ $ 10.00
---------

Income from Investment Operations
Net investment income ................................... .09
Net realized and unrealized gain on investments ......... .92
---------

Total from Investment Operations ..................... 1.01
---------

Net Asset Value, End of Period .............................. $ 11.01
=========

Total Return++ .............................................. 28.80%(a)

Ratio/Supplemental Data

Net Assets, End of Period (in thousands) .................... $ 5,467

Ratios to Average Net Assets:
Expenses ................................................ --
Net Investment Income ................................... 5.39(a)

Ratio to Average Net Assets Before
Expenses Waived
Expenses ................................................ .75%(a)
Net Investment Income ................................... 4.64%(a)

Portfolio Turnover Rate ..................................... 5%

+ All expenses have been waived or assumed by the investment adviser from
commencement of operations through August 31, 1995.
++ The effect of fees and charges incurred at the separate account level are
not reflected in these performance figures.
(a) Annualized

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

Blue Chip Fund

Blue Chip Fund seeks to provide investors with high total investment
return consistent with the preservation of capital. The Fund seeks to achieve
its objective by investing, under normal market conditions, at least 65% of its
total assets in securities of "Blue Chip" companies, including common and
preferred stocks and securities convertible into common stock, that the Adviser
believes have potential earnings growth that is greater than the average company
included in the Standard & Poor's 500 Composite Stock Price Index ("S&P 500").
The Fund also may invest up to 35% of its total assets in the equity securities
of non-Blue Chip companies that the Adviser believes have significant potential
for growth of capital or future income consistent with the preservation of
capital. When market conditions warrant, or when the Adviser believes it is
necessary to achieve the Fund's objective, the Fund may invest up to 25% of its
total assets in fixed income securities.

The Fund defines Blue Chip companies as those companies that have a market
capitalization of at least $300 million, are dividend paying and are included in
the S&P 500. Market capitalization is the total market value of a company's
outstanding common stock. Blue Chip companies are considered to be of relatively
high quality and generally exhibit superior fundamental characteristics, which
may include: potential for consistent earnings growth, a history of
profitability and payment of dividends, leadership position in their industries
and markets, proprietary products or services, experienced management, high
return on equity and a strong balance sheet. Blue Chip companies usually exhibit
less investment risk and share price volatility than smaller, less established
companies. Examples of Blue Chip companies are American Telephone & Telegraph,
General Electric, Pepsico Inc. and Bristol-Myers Squibb.

The fixed income securities in which the Fund may invest include money
market instruments (including prime commercial paper, certificates of deposit of
domestic branches of U.S. banks and bankers' acceptances), obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Obligations"), including mortgage-backed
securities, and corporate debt securities. However, no more than 5% of the
Fund's net assets may be invested in corporate debt securities rated below Baa
by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
("S&P"). The Fund may borrow money for temporary or emergency purposes in
amounts not exceeding 5% of its total assets. The Fund may also invest up to 5%
of its net assets in American Depository Receipts ("ADRs"), enter into
repurchase agreements and make loans of portfolio securities. See "Description
of Certain Securities, Other Investment Policies and Risk Factors," below, and
the SAI for additional information concerning these securities.

Cash Management Fund

Cash Management Fund seeks to earn a high rate of current income
consistent with the preservation of capital and maintenance of liquidity. The
Fund generally can invest only in securities that mature within 397 days from
the date of purchase. In addition, the Fund maintains a dollar-weighted average
portfolio maturity of 90 days or less.

Cash Management Fund invests primarily in (1) high quality marketable
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, (2) bank certificates of deposit,
bankers' acceptances, time deposits and other short-term obligations issued by

<PAGE>

banks and (3) prime commercial paper and high quality, U.S. dollar denominated
short-term corporate bonds and notes. The U.S. Government securities in which
the Fund may invest include a variety of U.S. Treasury securities that differ in
their interest rates, maturities and dates of issue. Securities issued or
guaranteed by agencies or instrumentalities of the U.S. Government may be
supported by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury. See the SAI for additional
information on U.S. Government securities. The Fund may invest in domestic bank
certificates of deposit (insured up to $100,000) and bankers' acceptances (not
insured) issued by domestic banks and savings institutions which are insured by
the Federal Deposit Insurance Corporation ("FDIC") and that have total assets
exceeding $500 million. The Fund also may invest in certificates of deposit
issued by London branches of domestic or foreign banks ("Eurodollar CDs"). The
Fund may invest in time deposits and other short-term obligations, including
uninsured, direct obligations bearing fixed, floating or variable interest
rates, issued by domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks. See Appendix A to the SAI for a description of commercial paper ratings
and Appendix B to the SAI for a description of municipal note ratings. The Fund
also may invest in repurchase agreements with banks that are members of the
Federal Reserve System or securities dealers that are members of a national
securities exchange or are market makers in U.S. Government securities, and, in
either case, only where the debt instrument subject to the repurchase agreement
is a U.S. Treasury or agency obligation.

Cash Management Fund also may purchase high quality, U.S. dollar
denominated short-term bonds and notes, including variable rate and master
demand notes issued by domestic and foreign corporations (including banks).
Floating and variable rate demand notes and bonds permit the Fund, as the
holder, to demand payment of principal at any time, or at specified intervals
not exceeding 397 days, in each case upon not more than 30 days' notice. The
Fund may borrow money for temporary or emergency purposes in amounts not
exceeding 5% of its total assets and make loans of portfolio securities. See
"Description of Certain Securities, Other Investment Policies and Risk Factors"
for additional information concerning these securities.

Cash Management Fund may purchase only obligations that (1) the Adviser
determines present minimal credit risks based on procedures adopted by Life
Series Fund's Board of Trustees, and (2) are either (a) rated in one of the top
two rating categories by at least two nationally recognized statistical ratings
organizations ("NRSROs") (or one, if only one rated the security) or (b) unrated
securities that the Adviser determines are of comparable quality. Securities
qualify as being in the top rating category ("First Tier Securities") if at
least two NRSROs (or one, if only one rated the security) have given it the
highest rating. If only one NRSRO has rated a security, or it is unrated, the
acquisition of that security must be approved or ratified by Life Series Fund's
Board of Trustees. The Fund's purchases of commercial paper are limited to First
Tier Securities. The Fund may not invest more than 5% of its total assets in
securities rated in the second highest rating category ("Second Tier
Securities"). Investments in Second Tier Securities of any one issuer are
limited to the greater of 1% of the Fund's total assets or $1 million. The Fund
generally may invest no more than 5% of its total assets in the securities of a
single issuer (other than securities issued by the U.S. Government, its agencies
or instrumentalities).

<PAGE>

Discovery Fund

Discovery Fund seeks long-term capital appreciation, without regard to
dividend or interest income. The Fund seeks to achieve its objective by
investing in the common stock of companies with small to medium market
capitalization that the Adviser considers to be undervalued or less well known
in the current marketplace and to have potential for capital growth.

The Fund seeks to invest in the common stock of companies that are
undervalued in the current market in relation to fundamental economic values
such as earnings, sales, cash flow and tangible book value; that are early in
their corporate development (i.e., before they become widely recognized and well
known and while their reputations and track records are still emerging); or that
offer the possibility of greater earnings because of revitalized management, new
products or structural changes in the economy. Such companies primarily are
those with small to medium market capitalization, which the Adviser currently
considers to be market capitalization of up to $1.5 billion, but which could be
higher under certain market conditions. The Adviser believes that, over time,
these securities are more likely to appreciate in price than securities whose
market prices have already reached their perceived economic value. In addition,
the Fund intends to diversify its holdings among as many companies and
industries as the Adviser deems appropriate.

Companies that are early in their corporate development may be dependent
on relatively few products or services, may lack adequate capital reserves, may
be dependent on one or two management individuals and may have less of a track
record or historical pattern of performance. In addition, there may be less
information available as to the issuers and their securities may not be well
known to the general public and may not yet have wide institutional ownership.
Thus, the investment risk is higher than that normally associated with larger,
older or better-known companies.

Investments in securities of companies with small to medium market
capitalization are generally considered to offer greater opportunity for
appreciation and to involve greater risk of depreciation than securities of
companies with larger market capitalization. Because the securities of most
companies with small to medium market capitalization are not as broadly traded
as those of companies with larger market capitalization, these securities are
often subject to wider and more abrupt fluctuations in market price. In the
past, there have been prolonged periods when these securities have substantially
underperformed or outperformed the securities of larger capitalization
companies. In addition, smaller capitalization companies generally have fewer
assets available to cushion an unforeseen adverse occurrence and thus such an
occurrence may have a disproportionately negative impact on these companies.

The Fund may invest up to 10% of its total assets in common stocks issued
by foreign companies which are traded on a recognized domestic or foreign
securities exchange. In addition to the fundamental analysis of companies and
their industries which it performs for U.S. issuers, the Adviser evaluates the
economic and political climate of the country in which the company is located
and the principal securities markets in which such securities are traded.
Although the foreign stocks in which the Fund invests are primarily denominated
in foreign currencies, the Fund also may invest in ADRs. The Adviser does not
attempt to time actively either short-term market trends or short-term currency
trends in any market. See "Foreign Securities--Risk Factors" and "American
Depository Receipts and Global Depository Receipts."

<PAGE>

The Fund may borrow money for temporary or emergency purposes in amounts
not exceeding 5% of its total assets. The Fund also may enter into repurchase
agreements and may make loans of portfolio securities. For temporary defensive
purposes, the Fund may invest all of its assets in U.S. Government Obligations,
prime commercial paper, certificates of deposit and bankers' acceptances. See
the SAI for more information regarding these securities.

Government Fund

Government Fund seeks to achieve a significant level of current income
which is consistent with security and liquidity of principal by investing, under
normal market conditions, at least 65% of its assets in U.S. Government
Obligations, including mortgage-backed securities. Securities issued or
guaranteed as to principal and interest by the U.S. Government include a variety
of Treasury securities, which differ only in their interest rates, maturities
and times of issuance. Although the payment of interest and principal on a
portfolio security may be guaranteed by the U.S. Government or one of its
agencies or instrumentalities, shares of the Fund are not insured or guaranteed
by the U.S. Government or any agency or instrumentality. The net asset value of
shares of the Fund generally will fluctuate in response to interest rate levels.
When interest rates rise, prices of fixed income securities generally decline;
when interest rates decline, prices of fixed income securities generally rise.
See "U.S. Government Obligations" and "Debt Securities-Risk Factors," below.

The Fund may invest in mortgage-backed securities, including those
involving Government National Mortgage Association ("GNMA") certificates,
Federal National Mortgage Association ("FNMA") certificates and Federal Home
Loan Mortgage Corporation ("FHLMC") certificates. The Fund also may invest in
securities issued or guaranteed by other U.S. Government agencies or
instrumentalities, including: the Federal Farm Credit System and the Federal
Home Loan Bank (each of which may not borrow from the U.S. Treasury and the
securities of which are not guaranteed by the U.S. Government); the Tennessee
Valley Authority, and the U.S. Postal Service (each of which may borrow from the
U.S. Treasury to meet its obligations); the Farmers Home Administration and the
Export-Import Bank (the securities of which are backed by the full faith and
credit of the United States). The Fund normally reinvests principal payments
(whether regular or pre-paid) in additional mortgage-backed securities. See
"Mortgage-Backed Securities," below.

The Fund may invest up to 35% of its assets in securities other than U.S.
Government Obligations and mortgage-backed securities. These may include: prime
commercial paper, certificates of deposit of domestic branches of U.S. banks,
bankers' acceptances, repurchase agreements (applicable to U.S. Government
Obligations), insured certificates of deposit and certificates representing
accrual on U.S. Treasury securities. The Fund also may make loans of portfolio
securities and invest in zero coupon securities. The Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
See the SAI for a further discussion of these securities.

For temporary defensive purposes, the Fund may invest all of its assets in
cash, cash equivalents and money market instruments, including bank certificates
of deposit, bankers' acceptances and commercial paper issued by domestic
corporations, short-term fixed income securities or U.S. Government Obligations.
See the SAI for a description of these securities.

<PAGE>

Growth Fund

The investment objective of Growth Fund is long-term capital appreciation.
Current income through the receipt of interest or dividends from investments
will merely be incidental to the Fund's efforts in pursuing its goal. It is the
policy of the Fund to invest, under normal market conditions, primarily in
common stocks and it is anticipated that the Fund will usually be so invested.
It also may invest to a limited degree in convertible securities and preferred
stocks. At least 75% of the value of the Fund's total assets (excluding
securities held for defensive purposes) shall be invested in securities of
companies in industries in which the Adviser, or the Fund's investment
subadviser, Wellington Management Company ("Subadviser" or "WMC"), believes
opportunities for capital growth exist. The Fund does not intend to concentrate
its investments in a particular industry, but it may invest up to 25% of the
value of its assets in a particular industry. The Fund may also invest in ADRs
and Global Depository Receipts ("GDRs"), purchase securities on a when-issued or
delayed delivery basis and make loans of portfolio securities. The Fund may
borrow money for temporary or emergency purposes in amounts not exceeding 5% of
its total assets. For temporary defensive purposes, the Fund may invest all of
its assets in U.S. Government Obligations, investment grade bonds, prime
commercial paper, certificates of deposit, bankers' acceptances, repurchase
agreements and participation interests. See the SAI for a description of these
securities.

High Yield Fund

High Yield Fund primarily seeks high current income and secondarily seeks
growth of capital. The Fund actively seeks to achieve its secondary objective to
the extent consistent with its primary objective. The Fund seeks to achieve its
objectives by investing, under normal market conditions, at least 65% of its
total assets in high risk, high yield securities, commonly referred to as "junk
bonds" ("High Yield Securities"). High Yield Securities include the following
instruments: fixed, variable or floating rate debt obligations (including bonds,
debentures and notes) which are rated below Baa by Moody's or below BBB by S&P,
or, if unrated, are deemed to be of comparable quality by the Adviser; preferred
stocks and dividend-paying common stocks that have yields comparable to those of
high yielding debt securities; any of the foregoing securities of companies that
are financially troubled, in default or undergoing bankruptcy or reorganization
("Deep Discount Securities"); and any securities convertible into any of the
foregoing. See "High Yield Securities--Risk Factors" and "Deep Discount
Securities."

The Fund may invest up to 5% of its total assets in debt securities issued
by foreign governments and companies located outside the United States and
denominated in foreign currency. The Fund may borrow money for temporary or
emergency purposes in amounts not exceeding 5% of its total assets, make loans
of portfolio securities, enter into repurchase agreements and invest in zero
coupon and pay-in-kind securities. The Fund may also invest in securities on a
"when issued" or delayed delivery basis. See "Description of Certain Securities,
Other Investment Policies and Risk Factors," below, and the SAI for more
information concerning these securities.

The Fund may invest up to 35% of its total assets in securities other than
High Yield Securities, including: dividend-paying common stocks; securities
convertible into, or exchangeable for, common stock; debt obligations of all
types (including bonds, debentures and notes) rated A or better by Moody's or
S&P; U.S. Government Obligations; warrants and money market instruments
consisting of prime commercial paper, certificates of deposit of domestic
branches of U.S. banks, bankers' acceptances and repurchase agreements.

<PAGE>

In any period of market weakness or of uncertain market or economic
conditions, the Fund may establish a temporary defensive position to preserve
capital by having all or part of its assets invested in investment grade debt
securities or retained in cash or cash equivalents, including bank certificates
of deposit, bankers' acceptances, U.S. Government Obligations and commercial
paper issued by domestic corporations. See "Description of Certain Securities,
Other Investment Policies and Risk Factors," below.

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

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

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

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

The dollar weighted average of credit ratings of all bonds held by the
Fund during the 1994 fiscal year, computed on a monthly basis, is set forth
below. This information reflects the average composition of the Fund's assets
during the 1994 fiscal year and is not necessarily representative of the Fund as
of the end of its 1994 fiscal year, the current fiscal year or at any other time
in the future.

<PAGE>

Comparable Quality of
Unrated Securities to
Rated by Moody's Bonds Rated by Moody's
---------------- ----------------------
Baa 1.07% 0%
Ba 12.74 1.72
B 67.88 2.31
Caa 4.82 0.98
Ca 0.10 0
----- ----
Total 86.61% 5.01%

International Securities Fund

International Securities Fund primarily seeks long-term capital growth and
secondarily seeks to earn a reasonable level of current income. The Fund may
invest in all types of securities issued by companies and government
instrumentalities of any nation approved by the Trustees, subject only to
industry concentration and issuer diversification restrictions described below
and in the SAI. This investment flexibility permits the Fund to react to rapidly
changing economic conditions among countries which cause the relative
attractiveness of investments within national markets to be subject to frequent
reappraisal. It is a fundamental policy of the Fund that no more than 35% of its
total assets will be invested in securities issued by U.S. companies and U.S.
Government Obligations or cash and cash equivalents denominated in U.S.
currency. In addition, the Fund presently does not intend to invest more than
35% of its total assets in any one particular country. Further, except for
temporary defensive purposes, the Fund's assets will be invested in securities
of at least three different countries outside the United States. See "Foreign
Securities--Risk Factors". For defensive purposes, the Fund may temporarily
invest in securities issued by U.S. companies and the U.S. Government and its
agencies and instrumentalities, or cash equivalents denominated in U.S.
currency, without limitation as to amount.

The Fund may purchase securities traded on any foreign stock exchange. The
Fund may also purchase ADRs and GDRs. See "American Depository Receipts and
Global Depository Receipts," below. The Fund also may invest up to 25% of its
total assets in unlisted securities of foreign issuers; provided, however, that
no more than 15% of the value of its net assets may be invested in unlisted
securities with a limited trading market and other illiquid investments. The
investment standards for the selection of unlisted securities are the same as
those used in the purchase of securities traded on a stock exchange.

The Fund may invest in warrants, which may or may not be listed on a
recognized United States or foreign exchange. The Fund also may enter into
repurchase agreements, purchase securities on a when-issued or delayed delivery
basis and make loans of portfolio securities. The Fund also may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
See the SAI for further information concerning these securities.

Investment Grade Fund

Investment Grade Fund seeks to generate a maximum level of income
consistent with investment in investment grade debt securities. The Fund seeks
to achieve its objective by investing, under normal market conditions, at least
65% of its total assets in debt securities of U.S. issuers that are rated in the
four highest rated categories by Moody's or S&P, or in unrated securities that

<PAGE>

are deemed to be of comparable quality by the Adviser ("investment grade
securities"). The Fund may invest up to 35% of its total assets in U.S.
Government Obligations, including mortgage-related securities, dividend-paying
common and preferred stocks, obligations convertible into common stocks,
repurchase agreements, debt securities rated below investment grade and money
market instruments. The Fund may invest up to 5% of its net assets in corporate
or government debt securities of foreign issuers which are U.S. dollar
denominated and traded in U.S. markets. The Fund may also borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
The Fund may purchase securities on a when-issued basis, make loans of portfolio
securities and invest in zero coupon or pay-in-kind securities. See "Description
of Certain Securities, Other Investment Policies and Risk Factors," below, and
the SAI for additional information concerning these securities.

The published reports of rating services are considered by the Adviser in
selecting rated securities for the Fund's portfolio. The Adviser also relies,
among other things, on its own credit analysis, which includes a study of the
existing debt's capital structure, the issuer's ability to service debt (or to
pay dividends, if investing in common or preferred stock) and the current trend
of earnings for the issuer. Although up to 100% of the Fund's total assets can
be invested in debt securities rated at least Baa by Moody's or at least BBB by
S&P, or unrated debt securities deemed to be of comparable quality by the
Adviser, no more than 5% of the Fund's net assets may be invested in debt
securities rated lower than Baa by Moody's or BBB by S&P (including securities
that have been downgraded), or, if unrated, deemed to be of comparable quality
by the Adviser, or in any equity securities of any issuer if a majority of the
debt securities of such issuer are rated lower than Baa by Moody's or BBB by
S&P. Securities rated BBB or Baa by S&P or Moody's, respectively, are considered
to be speculative with respect to the issuer's ability to make principal and
interest payments. The Adviser continually monitors the investments in the
Fund's portfolio and carefully evaluates on a case-by-case basis whether to
dispose of or retain a debt security which has been downgraded to a rating lower
than investment grade. See "Debt Securities--Risk Factors" and Appendix A for a
description of corporate bond ratings.

For temporary defensive purposes, the Fund may invest all of its assets in
money market instruments, short-term fixed income securities or U.S. Government
Obligations. See "Description of Certain Securities, Other Investment Policies
and Risk Factors," below, and the SAI.

Target Maturity 2007 Fund

Target Maturity 2007 Fund seeks to provide a predictable compounded
investment for investors who hold their Fund shares until the Fund's maturity,
consistent with preservation of capital. The Fund will seek its objective by
investing, under normal market conditions, at least 65% of its total assets in
zero coupon securities which are issued by the U.S. Government and its agencies
and instrumentalities or created by third parties using securities issued by the
U.S. Government and its agencies and instrumentalities. These investments will
mature no later than December 31, 2007 (the "Maturity Date"). On the Maturity
Date, the Fund will be converted to cash and distributed or reinvested in
another Fund of Life Series Fund at the investor's choice.

The Fund seeks to provide investors with a positive total return at the
Maturity Date which, together with the reinvestment of all dividends and
distributions, exceeds their original investment in the Fund by a relatively
predictable amount. While the risk of fluctuation in the values of zero coupon
securities is greater when the period to maturity is longer, that risk tends to
diminish as the Maturity Date approaches. Although an investor can redeem shares

<PAGE>

at the current net asset value at any time, any investor who redeems his or her
shares prior to the Maturity Date is likely to achieve a different investment
result than the return that was predicted on the date the investment was made,
and may even suffer a significant loss.

Zero coupon securities are debt obligations that do not entitle the holder
to any periodic payment of interest prior to maturity or a specified date when
the securities begin paying current interest. They are issued and traded at a
discount from their face amount or par value, which discount varies depending on
the time remaining until maturity, prevailing interest rates, liquidity of the
security and the perceived credit quality of the issuer. When held to maturity,
their entire return, which consists of the accretion of the discount, comes from
the difference between their issue price and their maturity value. This
difference is known at the time of purchase, so investors holding zero coupon
securities until maturity know the amount of their investment return at the time
of their investment. The market values are subject to greater market
fluctuations from changing interest rates prior to maturity than the values of
debt obligations of comparable maturities that bear interest currently.
See "Zero Coupon Securities-Risk Factors."

A portion of the total realized return from conventional interest-paying
bonds comes from the reinvestment of periodic interest. Since the rate to be
earned on these reinvestments may be higher or lower than the rate quoted on the
interest-paying bonds at the time of the original purchase, the total return of
interest-paying bonds is uncertain even for investors holding the security to
its maturity. This uncertainty is commonly referred to as reinvestment risk and
can have a significant impact on total realized investment return. With zero
coupon securities, however, there are no cash distributions to reinvest, so
investors bear no reinvestment risk if they hold the zero coupon securities to
maturity.

The Fund primarily will purchase three types of zero coupon securities:
(1) U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal
Securities), which are created when the coupon payments and the principal
payment are stripped from an outstanding Treasury security by the Federal
Reserve Bank. Bonds issued by the Resolution Funding Corporation (REFCORP) can
also be stripped in this fashion. (2) STRIPS which are created when a dealer
deposits a Treasury security or a Federal agency security with a custodian for
safekeeping and then sells the coupon payments and principal payment that will
be generated by this security. Bonds issued by the Financing Corporation (FICO)
can be stripped in this fashion. (3) Zero coupon securities of federal agencies
and instrumentalities either issued directly by an agency in the form of a zero
coupon bond or created by stripping an outstanding bond.

The Fund may invest up to 35% of its total assets in the following
instruments: interest-bearing obligations issued by the U.S. Government and its
agencies and instrumentalities (see "U.S. Government Obligations"), including
zero coupon securities maturing beyond 2007; corporate debt securities,
including corporate zero coupon securities; repurchase agreements; and money
market instruments consisting of prime commercial paper, certificates of deposit
of domestic branches of U.S. banks and bankers' acceptances. The Fund may only
invest in debt securities rated A or better by Moody's or S&P or in unrated
securities that are deemed to be of comparable quality by the Adviser. Debt
obligations rated A or better by Moody's or S&P comprise what are known as
high-grade bonds and are regarded as having a strong capacity to pay principal
and interest. See Appendix A for a description of corporate bond ratings. The
Fund may also invest in restricted and illiquid securities, make loans of

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portfolio securities and purchase securities on a when-issued basis. See the SAI
for more information regarding these types of investments.

Utilities Income Fund

The primary investment objective of Utilities Income Fund is to seek high
current income. Long-term capital appreciation is a secondary objective. The
Fund seeks its objectives by investing, under normal market conditions, at least
65% of its total assets in equity and debt securities issued by companies
primarily engaged in the public utilities industry. Equity securities in which
the Fund may invest include common stocks, preferred stocks, securities
convertible into common stocks or preferred stocks, and warrants to purchase
common or preferred stocks. Debt securities in which the Fund may invest will be
rated at the time of investment at least A by Moody's or S&P or, if unrated,
will be deemed to be of comparable quality as determined by the Adviser. Debt
securities rated A or higher by Moody's or S&P or, if unrated, deemed to be of
comparable quality by the Adviser, are regarded as having a strong capacity to
pay principal and interest. The Fund's policy is to attempt to sell, within a
reasonable time period, a debt security in its portfolio which has been
downgraded below A, provided that such disposition is in the best interests of
the Fund and its shareholders. See Appendix A for a description of corporate
bond ratings. The portion of the Fund's assets invested in equity securities and
in debt securities will vary from time to time due to changes in interest rates
and economic and other factors.

The utility companies in which the Fund will invest include companies
primarily engaged in the ownership or operation of facilities used to provide
electricity, gas, water or telecommunications (including telephone, telegraph
and satellite, but not companies engaged in public broadcasting or cable
television). For these purposes, "primarily engaged" means that (1) more than
50% of the company's assets are devoted to the ownership or operation of one or
more facilities as described above, or (2) more than 50% of the company's
operating revenues are derived from the business or combination of any of the
businesses described above. It should be noted that based on this definition,
the Fund may invest in companies which are also involved to a significant degree
in non-public utilities activities.

Utility stocks generally offer dividend yields that exceed those of
industrial companies and their prices tend to be less volatile than stocks of
industrial companies. However, utility stocks can still be affected by the risks
of the stock of industrial companies. Because the Fund concentrates its
investments in public utilities companies, the value of its shares will be
especially affected by factors peculiar to the utilities industry, and may
fluctuate more widely than the value of shares of a fund that invests in a
broader range of industries. See "Utilities Industries--Risk Factors."

The Fund may invest up to 35% of its total assets in the following
instruments: debt securities (rated at least A by Moody's or S&P) and common and
preferred stocks of non-utility companies; U.S. Government Obligations;
mortgage-backed securities; cash; and money market instruments consisting of
prime commercial paper, bankers' acceptances, certificates of deposit and
repurchase agreements. The Fund may invest in securities on a "when-issued" or
delayed delivery basis and make loans of portfolio securities. The Fund may
invest up to 5% of its net assets in ADRs. The Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its net assets.
The Fund also may invest in zero coupon and pay-in-kind securities. In addition,
in any period of market weakness or of uncertain market or economic conditions,
the Fund may establish a temporary defensive position to preserve capital by
having all of its assets invested in short-term fixed income securities or

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retained in cash or cash equivalents. See the SAI for a description of these
securities.

General. Each Fund's net asset value fluctuates based mainly upon changes
in the value of its portfolio securities. Each Fund's investment objectives and
certain investment limitations set forth in the SAI are fundamental policies
that may not be changed without shareholder approval. There can be no assurance
that any Fund will achieve its investment objectives.

Description of Certain Securities, Other Investment Policies and Risk Factors

American Depository Receipts and Global Depository Receipts. International
Securities Fund, Growth Fund, Utilities Income Fund and Discovery Fund may
invest in sponsored and unsponsored ADRs. ADRs are receipts typically issued by
a U.S. bank or trust company evidencing ownership of the underlying securities
of foreign issuers, and other forms of depository receipts for securities of
foreign issuers. Generally, ADRs, in registered form, are denominated in U.S.
dollars and are designed for use in the U.S. securities markets. Thus, these
securities are not denominated in the same currency as the securities into which
they may be converted. In addition, the issuers of the securities underlying
unsponsored ADRs are not obligated to disclose material information in the
United States and, therefore, there may be less information available regarding
such issuers and there may not be a correlation between such information and the
market value to the ADRs. International Securities Fund and Growth Fund may also
invest in sponsored and unsponsored GDRs. GDRs are issued globally and evidence
a similar ownership arrangement. Generally, GDRs are designed for trading in
non-U.S. securities markets. ADRs and GDRs are considered to be foreign
securities by International Securities Fund, Growth Fund, Utilities Income Fund
and Discovery Fund, as appropriate. See "Foreign Securities--Risk Factors."

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

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

Commercial Paper. Commercial paper is a promissory note issued by a
corporation to finance short-term credit needs which may either be unsecured or
backed by a letter of credit. Commercial paper includes notes, drafts or similar
instruments payable on demand or having a maturity at the time of issuance not

<PAGE>

exceeding nine months, exclusive of days of grace or any renewal thereof. See
Appendix A to the SAI for a description of commercial paper ratings.

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

Debt Securities--Risk Factors. The market value of debt securities is
influenced primarily by changes in the level of interest rates. Generally, as
interest rates rise, the market value of debt securities decreases. Conversely,
as interest rates fall, the market value of debt securities increases. Factors
which could result in a rise in interest rates, and a decrease in the market
value of debt securities, include an increase in inflation or inflation
expectations, an increase in the rate of U.S. economic growth, an expansion in
the Federal budget deficit or an increase in the price of commodities such as
oil. In addition, the market value of debt securities is influenced by
perceptions of the credit risks associated with such securities. Sale of debt
securities prior to maturity may result in a loss and the inability to replace
the sold securities with debt securities with a similar yield. Debt obligations
rated lower than Baa by Moody's or BBB by S&P, commonly referred to as "junk
bonds," are speculative and generally involve a higher risk of loss of principal
and income than higher-rated securities. See "High Yield Securities--Risk
Factors" and Appendix A for a description of corporate bond ratings.

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

Eurodollar Certificates of Deposit. Cash Management Fund may invest in
Eurodollar CDs, which are issued by London branches of domestic or foreign
banks. Such securities involve risks that differ from certificates of deposit
issued by domestic branches of U.S. banks. These risks include future political
and economic developments, the possible imposition of United Kingdom withholding
taxes on interest income payable on the securities, the possible establishment

<PAGE>

of exchange controls, the possible seizure or nationalization of foreign
deposits or the adoption of other foreign governmental restrictions that might
adversely affect the payment of principal and interest on such securities.

Foreign Securities--Risk Factors. International Securities Fund, Growth
Fund and Discovery Fund may sell a security denominated in a foreign currency
and retain the proceeds in that foreign currency to use at a future date (to
purchase other securities denominated in that currency) or a Fund may buy
foreign currency outright to purchase securities denominated in that foreign
currency at a future date. Because a Fund does not intend to hedge their foreign
investments, the Fund will be affected by changes in exchange control
regulations and fluctuations in the relative rates of exchange between the
currencies of different nations, as well as by economic and political
developments. Other risks involved in foreign securities include the following:
there may be less publicly available information about foreign companies
comparable to the reports and ratings that are published about companies in the
United States; foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards and requirements
comparable to those applicable to U.S. companies; some foreign stock markets
have substantially less volume than U.S. markets, and securities of some foreign
companies are less liquid and more volatile than securities of comparable U.S.
companies; there may be less government supervision and regulation of foreign
stock exchanges, brokers and listed companies than exist in the United States;
and there may be the possibility of expropriation or confiscatory taxation,
political or social instability or diplomatic developments which could affect
assets of a Fund held in foreign countries.

International Securities Fund's and Discovery Fund's investments in
emerging markets include investments in countries whose economies or securities
markets are not yet highly developed. Special considerations associated with
these investments (in addition to the considerations regarding foreign
investments generally) may include, among others, greater political
uncertainties, an economy's dependence on revenues from particular commodities
or on international aid or development assistance, currency transfer
restrictions, a limited number of potential buyers for such securities and
delays and disruptions in securities settlement procedures.

High Yield Securities--Risk Factors. High Yield Securities are subject to
certain risks that may not be present with investments in higher grade
securities.

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

<PAGE>

Generally, when interest rates rise, the value of fixed rate debt
obligations, including High Yield Securities, tends to decrease; when interest
rates fall, the value of fixed rate debt obligations tends to increase. If an
issuer of a High Yield Security containing a redemption or call provision
exercises either provision in a declining interest rate market, a Fund would
have to replace the security, which could result in a decreased return for
shareholders. Conversely, if a Fund experiences unexpected net redemptions in a
rising interest rate market, it might be forced to sell certain securities,
regardless of investment merit. This could result in decreasing the assets to
which Fund expenses could be allocated and in a reduced rate of return for that
Fund. While it is impossible to protect entirely against this risk,
diversification of a Fund's portfolio and the Adviser's careful analysis of
prospective portfolio securities should minimize the impact of a decrease in
value of a particular security or group of securities in a Fund's portfolio.

The High Yield Securities Market. The market for below investment
grade bonds expanded rapidly in the 1980's, and its growth paralleled a long
economic expansion. During that period, the yields on below investment grade
bonds were very high. Such higher yields did not reflect the value of the income
stream that holders of such bonds expected, but rather the risk that holders of
such bonds could lose a substantial portion of their value as a result of the
issuers' financial restructuring or default. In fact, from 1989 to 1991 during a
period of economic recession, the percentage of lower quality securities that
defaulted rose significantly, although the default rate decreased in subsequent
years. There can be no assurance that such declines in the below investment
grade market will not reoccur. The market for below investment grade bonds
generally is thinner and less active than that for higher quality bonds, which
may limit a Fund's ability to sell such securities at fair value in response to
changes in the economy or the financial markets. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease the
values and liquidity of lower rated securities, especially in a thinly traded
market.

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

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

<PAGE>

trades at favorable prices during unsettled market conditions.

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

Legislation. Provisions of the Revenue Reconciliation Act of 1989
limit a corporate issuer's deduction for a portion of the original issue
discount on "high yield discount" obligations (including certain pay-in-kind
securities). This limitation could have a materially adverse impact on the
market for certain High Yield Securities. From time to time, legislators and
regulators have proposed other legislation that would limit the use of high
yield debt securities in leveraged buyouts, mergers and acquisitions. It is not
certain whether such proposals, which also could adversely affect High Yield
Securities, will be enacted into law.

Mortgage-Backed Securities

Mortgage loans made by banks, savings and loan institutions and other
lenders are often assembled into pools, the interests in which are issued and
guaranteed by an agency or instrumentality of the U.S. Government, though not
necessarily by the U.S. Government itself. Interests in such pools are referred
to herein as "mortgage-backed securities." The market value of these securities
will fluctuate as interest rates and market conditions change. In addition,
prepayment of principal by the mortgagees, which often occurs with
mortgage-backed securities when interest rates decline, can significantly change
the realized yield of these securities.

GNMA certificates are backed as to the timely payment of principal
and interest by the full faith and credit of the U.S. Government. Payments of
principal and interest on FNMA certificates are guaranteed only by FNMA itself,
not by the full faith and credit of the U.S. Government. FHLMC certificates
represent mortgages for which FHLMC has guaranteed the timely payment of
principal and interest but, like a FNMA certificate, they are not guaranteed by
the full faith and credit of the U.S. Government.

Collateralized Mortgage Obligations and Multiclass Pass-Through
Securities. Collateralized mortgage obligations ("CMOs") are debt obligations
collateralized by mortgage loans or mortgage pass-through securities. Typically,
CMOs are collateralized by GNMA certificates or other government mortgage-backed
securities (such collateral collectively hereinafter referred to as "Mortgage
Assets"). Multiclass pass-through securities are interests in trusts that are
comprised of Mortgage Assets. Unless the context indicates otherwise, references
herein to CMOs include Multiclass pass-through securities. Payments of principal
of, and interest on, the Mortgage Assets, and any reinvestment income thereon,
provide the funds to pay debt service on the CMOs or to make scheduled
distributions on the multiclass pass-through securities. CMOs in which
Government Fund may invest are issued or guaranteed by U.S. Government agencies
or instrumentalities, such as FNMA and FHLMC. See the SAI for more information
on CMOs.

<PAGE>

Stripped Mortgage-Backed Securities. Government Fund and Target
Maturity 2007 Fund may invest in stripped mortgage-backed securities ("SMBS"),
which are derivative multiclass mortgage securities. SMBS are usually structured
with two classes that receive different proportions of the interest and
principal distributions from a pool of mortgage assets. A common type of SMBS
will have one class receiving most of the interest and the remainder of the
principal. In the most extreme case, one class will receive all of the interest
while the other class will receive all of the principal. If the underlying
mortgage assets experience greater than anticipated prepayments of principal,
the Fund may fail to fully recoup its initial investment in these securities.
The market value of the class consisting primarily or entirely of principal
payments generally is unusually volatile in response to changes in interest
rates.

Risks of Mortgage-Backed Securities. Investments in mortgage-backed
securities entail both market and prepayment risk. Fixed-rate mortgage-backed
securities are priced to reflect, among other things, current and perceived
interest rate conditions. As conditions change, market values will fluctuate. In
addition, the mortgages underlying mortgage-backed securities generally may be
prepaid in whole or in part at the option of the individual buyer. Prepayments
of the underlying mortgages can affect the yield to maturity on mortgage-backed
securities and, if interest rates decline, the prepayment may only be invested
at the then prevailing lower interest rate. Changes in market conditions,
particularly during periods of rapid or unanticipated changes in market interest
rates, may result in volatility and reduced liquidity of the market value of
certain mortgage-backed securities. CMOs and SMBS involve similar risks,
although they may be more volatile. In addition, because SMBS were only recently
introduced, established trading markets for these securities have not yet
developed, although the securities are traded among institutional investors and
investment banking firms.

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

Restricted and Illiquid Securities. Each Fund, other than Cash Management
Fund, may invest up to 15% of its net assets in illiquid securities. Cash
Management Fund may invest up to 10% of its net assets in illiquid securities.
These securities include (1) securities that are illiquid due to the absence of
a readily available market or due to legal or contractual restrictions on resale
and (2) repurchase agreements maturing in more than seven days. However,
illiquid securities for purposes of this limitation do not include securities
eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, which Life Series Fund's Board of
Trustees or the Adviser or the Subadviser has determined are liquid under
Board-approved guidelines. See the SAI for more information regarding restricted
and illiquid securities.

Under current guidelines of the staff of the SEC, interest-only and
principal-only classes of fixed-rate mortgage-backed securities in which
Government Fund may invest are considered illiquid. However, such securities
issued by the U.S. Government or one of its agencies or instrumentalities will
not be considered illiquid if the Adviser has determined that they are liquid
pursuant to guidelines established by Life Series Fund's Board of Trustees.
Government Fund may not be able to sell illiquid securities when the Adviser

<PAGE>

considers it desirable to do so or may have to sell such securities at a price
lower than could be obtained if they were more liquid. Also the sale of illiquid
securities may require more time and may result in higher dealer discounts and
other selling expenses than does the sale of securities that are not illiquid.
Illiquid securities may be more difficult to value due to the unavailability of
reliable market quotations for such securities, and investment in illiquid
securities may have an adverse impact on net asset value.

Time Deposits. Cash Management Fund may invest in time deposits. Time
deposits are non-negotiable deposits maintained in a banking institution for a
specified period of time at a stated interest rate. For the most part, time
deposits which may be held by the Fund would not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the FDIC.

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

Utilities Industry-Risk Factors. Stocks of utilities companies generally
offer dividend yields that exceed those of industrial companies and their prices
tend to be less volatile than stocks of industrial companies. However, utility
stocks can still be affected by the risks of the stock market in general, as
well as factors specific to public utilities companies.

Many utility companies, especially electric and gas and other
energy-related utility companies, have historically been subject to the risk of
increases in fuel and other operating costs, changes in interest rates on
borrowing for capital improvement programs, changes in applicable laws and
regulations, and costs and operating constraints associated with compliance with
environmental regulations. In particular, regulatory changes with respect to
nuclear and conventionally-fueled power generating facilities could increase
costs or impair the ability of utility companies to operate such facilities or
obtain adequate return on invested capital.

Certain utilities, especially gas and telephone utilities, have in recent
years been affected by increased competition, which could adversely affect the
profitability of such utility companies. In addition, expansion by companies
engaged in telephone communication services of their non-regulated activities
into other businesses (such as cellular telephone services, data processing,
equipment retailing, computer services and financial services) has provided the
opportunity for increases in earnings and dividends at faster rates than have
been allowed in traditional regulated businesses. However, technological
innovations and other structural changes also could adversely affect the
profitability of such companies in competition with utilities companies.

<PAGE>

Because securities issued by utility companies are particularly sensitive
to movements in interest rates, the equity securities of such companies are more
affected by movements in interest rates than are the equity securities of other
companies.

Each of these risks could adversely affect the ability and inclination of
public utilities companies to declare or pay dividends and the ability of
holders of common stock, such as the Utilities Income Fund, to realize any value
from the assets of the company upon liquidation or bankruptcy.

Variable Rate and Floating Rate Notes. Cash Management Fund may invest in
variable rate and floating rate notes. Issuers of such notes include
corporations, banks, broker-dealers and finance companies. Variable rate notes
include master demand notes which are obligations permitting the holder to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Fund, as lender, and the borrower. The interest
rates on these notes fluctuate from time to time. The issuer of such obligations
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations. See the SAI for more information on these securities.

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

Zero Coupon Securities-Risk Factors. Zero coupon securities are debt
securities and thus are subject to the same risk factors as all debt securities.
See "Debt Securities-Risk Factors." The market prices of zero coupon securities,
however, generally are more volatile than the prices of securities that pay
interest periodically and in cash and are likely to respond to changes in
interest rates to a greater degree than do other types of debt securities having
similar maturities and credit quality. As a result, the net asset value of
shares of the Target Maturity 2007 Fund may fluctuate over a greater range than
shares of the other Funds or mutual funds that invest in debt obligations having
similar maturities but that make current distributions of interest.

Zero coupon securities can be sold prior to their due date in the
secondary market at their then prevailing market value, which depends primarily
on the time remaining to maturity, prevailing levels of interest rates and the
perceived credit quality of the issuer. The prevailing market value may be more

<PAGE>

or less than the securities' value at the time of purchase. While the objective
of the Target Maturity 2007 Fund is to seek a predictable compounded investment
return for investors who hold their Fund shares until the Fund's maturity, the
Fund cannot assure that it will be able to achieve a certain level of return due
to the possible necessity of having to sell certain zero coupon securities to
pay expenses, dividends or meet redemptions at times and at prices that might be
disadvantageous or, alternatively, the need to invest assets received from new
purchases at prevailing interest rates, which would expose the Fund to
reinvestment risk. In addition, no assurance can be given as to the liquidity of
the market for certain of these securities. Determination as to the liquidity of
such securities will be made in accordance with guidelines established by Life
Series Fund's Board of Trustees. In accordance with such guidelines, the Adviser
will monitor the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other relevant
information.

Portfolio Turnover. The decline in interest rates in 1993 and 1994 had an
impact on the mortgage-backed securities market, where a large volume of
prepayments of mortgages occurred. As a result of these prepayments, among other
things, Government Fund liquidated many of its positions in premium
mortgage-backed securities. This resulted in a portfolio turnover rate for the
fiscal years ended 1993 and 1994 of 525% and 457%, respectively. A high rate of
portfolio turnover generally leads to increased transaction costs and may result
in a greater number of taxable transactions. See "Allocation of Portfolio
Brokerage" in the SAI. The Target Maturity 2007 Fund currently does not expect
its annual rate of portfolio turnover to exceed 100%. See the SAI for the other
Funds' portfolio turnover rate and for more information on portfolio turnover.

HOW TO BUY SHARES

Investments in a Fund are made through purchases of the Policies or the
Contracts offered by First Investors Life. Policy premiums, net of certain
expenses, are paid into a unit investment trust, Separate Account B. Purchase
payments for the Contracts, net of certain expenses, are also paid into a unit
investment trust, Separate Account C. The Separate Accounts pool these proceeds
to purchase shares of a Fund designated by purchasers of the Policies or
Contracts. Orders for the purchase of Fund shares received prior to the close of
regular trading on the New York Stock Exchange ("NYSE"), generally 4:00 P.M.
(New York City time), on any business day the NYSE is open for trading, will be
processed and shares will be purchased at the net asset value determined at the
close of regular trading on the NYSE on that day. Orders received after the
close of regular trading on the NYSE will be processed at the net asset value
determined at the close of regular trading on the NYSE on the next trading day.
See "Determination of Net Asset Value."

HOW TO REDEEM SHARES

Shares of a Fund may be redeemed at the direction of Policyowners or
Contractowners, in accordance with the terms of the Policies or Contracts.
Redemptions will be made at the next determined net asset value of the
respective Fund upon receipt of a proper request for redemption or repurchase.
Payment will be made by check as soon as possible but within seven days after
presentation. However, Life Series Fund's Board of Trustees may suspend the
right of redemption or postpone the date of payment during any period when (a)
trading on the NYSE is restricted as determined by the Securities and Exchange
Commission ("SEC") or the NYSE is closed for other than weekends and holidays,
(b) the SEC has by order permitted such suspension, or (c) an emergency, as

<PAGE>

defined by rules of the SEC, exists during which time the sale or valuation of
portfolio securities held by a Fund is not reasonably practicable.

MANAGEMENT

Board of Trustees. Life Series Fund's Board of Trustees, as part of its
overall management responsibility, oversees various organizations responsible
for each Fund's day-to-day management.

Adviser. First Investors Management Company, Inc. supervises and manages
each Fund's investments, supervises all aspects of each Fund's operations and,
except for International Securities Fund and Growth Fund, determines each Fund's
portfolio transactions. The Adviser is a New York corporation located at 95 Wall
Street, New York, NY 10005. First Investors Consolidated Corporation ("FICC")
owns all of the voting common stock of the Adviser and all of the outstanding
stock of First Investors Corporation and the Transfer Agent. Mr. Glenn O. Head
(or members of his family) and Mrs. Julie W. Grayson (as executrix of the estate
of her deceased husband, David D. Grayson) each control more than 25% of the
voting stock of FICC and, therefore, jointly control the Adviser.

As compensation for its services, the Adviser receives an annual fee from
each Fund, which is payable monthly. For the fiscal year ended December 31,
1994, the advisory fees were 0.75% of average daily net assets for each of Blue
Chip Fund, Discovery Fund, Growth Fund, High Yield Fund and International
Securities Fund, 0.35% of average daily net assets, net of waiver, for each of
Government Fund and Investment Grade Fund, 0.31% of average daily net assets,
net of waiver, for Cash Management Fund and 0.17% average daily net assets, net
of waiver, for Utilities Income Fund. As compensation for its services, the
Adviser receives a fee from Target Maturity 2007 Fund at the rate of 0.75% of
the average daily net assets of that Fund.

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

Subadviser. Wellington Management Company has been retained by the Adviser
and Life Series Fund, on behalf of International Securities Fund and Growth
Fund, as each of those Fund's investment subadviser. The Adviser has delegated
discretionary trading authority to WMC with respect to all the assets of
International Securities Fund and Growth Fund, subject to the continuing
oversight and supervision of the Adviser and the Board of Trustees. As
compensation for its services, WMC is paid by the Adviser, and not by either
Fund, a fee which is computed daily and paid monthly.

WMC, located at 75 State Street, Boston, MA 02109, is a Massachusetts
general partnership of which Robert W. Doran, Duncan M. McFarland and John B.
Neff are Managing Partners. WMC is a professional investment counseling firm
which provides investment services to investment companies, employee benefit
plans, endowment funds, foundations and other institutions and individuals. As
of June 30, 1995, WMC held investment management authority with respect to
approximately $96.0 billion of assets. Of that amount, WMC acted as investment

<PAGE>

adviser or subadviser to approximately 110 registered investment companies or
series of such companies, with net assets of approximately $67.2 billion as of
June 30, 1995. WMC is not affiliated with the Adviser or any of its affiliates.

Portfolio Managers. Patricia D. Poitra, Director of Equities, has been
primarily responsible for the day-to-day management of the Blue Chip Fund since
October 1994 and Discovery Fund since 1988. Ms. Poitra is assisted by a team of
portfolio analysts. Ms. Poitra has been responsible for the management of the
Special Situations Series, the Blue Chip Fund and the small capitalization
equity portion of Total Return Series, all series of First Investors Series
Fund. Ms. Poitra also is responsible for the management of the Blue Chip Fund of
Executive Investors Trust and the Made In The U.S.A. Fund of First Investors
Series Fund II, Inc. Ms. Poitra joined FIMCO in 1985 as a Senior Equity Analyst.

George V. Ganter has been Portfolio Manager for High Yield Fund since
1989. Mr. Ganter joined FIMCO in 1985 as a Senior Analyst. In 1986, he became
Portfolio Manager for First Investors Special Bond Fund, Inc. In 1989, he became
Portfolio Manager for First Investors High Yield Fund, Inc. and Executive
Investors High Yield Fund.

Margaret R. Haggerty is Portfolio Manager for Utilities Income Fund. Ms.
Haggerty joined FIMCO in 1990 as an analyst for several First Investors equity
funds. In addition, she monitored the management of several First Investors
funds for which WMC was the subadviser. In early 1993, she became Portfolio
Manager for First Investors Utilities Income Fund of First Investors Series Fund
II, Inc.

Nancy Jones has been Portfolio Manager for Investment Grade Fund since its
inception in 1992 and Cash Management Fund since 1989. Ms. Jones joined FIMCO in
1983 as Director of Research in the High Yield Department. In 1989, she became
Portfolio Manager for First Investors Fund For Income, Inc. Ms. Jones has been
Portfolio Manager for Investment Grade Fund of First Investors Series Fund since
its inception in 1991 and has managed the fixed income corporate securities
portion of Total Return Series of First Investors Series Fund since 1992.

Since August 1995, WMC's Growth Investment Team, a group of equity
portfolio managers and senior investment professionals, has assumed
responsibility for managing the Growth Fund.

Since April 1995, John Tomasulo has been primarily responsible for the
day-to-day management of the Government Fund and the Target Maturity 2007 Fund.
Mr. Tomasulo is also responsible for the management of the First Investors
Government Fund, Inc. and for the U.S. Government and mortgage-backed securities
portion of the Total Return Series of First Investors Series Fund. Prior to
joining FIMCO, Mr. Tomasulo was affiliated with Seligman & Co. since 1987 where
he assisted in the management of a U.S. government fund and individual accounts
and had primary responsibility for three money market funds.

Since April 1, 1994, International Securities Fund is managed by WMC's
Global Equity Strategy Group, a group of global portfolio managers and senior
investment professionals headed by Trond Skramstead. Prior to joining WMC as a
portfolio manager in 1993, Mr. Skramstead was a global portfolio manager at
Scudder, Stevens & Clark since 1990.

<PAGE>

DETERMINATION OF NET ASSET VALUE

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

The investments in Cash Management Fund, when purchased at a discount, are
valued at amortized cost and when purchased at face value, are valued at cost
plus accrued interest.

DIVIDENDS AND OTHER DISTRIBUTIONS

For the purposes of determining dividends, the net investment income of
each Fund, other than Cash Management Fund, consists of interest and dividends,
earned discount and other income earned on portfolio securities less expenses.
Net investment income of Cash Management Fund consists of (i) accrued interest,
plus or minus (ii) all realized and unrealized gains and losses on the Fund's
securities, less (iii) accrued expenses. Dividends from net investment income
are generally declared and paid annually by each Fund, other than Cash
Management Fund. Dividends from net investment income are generally declared
daily and paid monthly by Cash Management Fund. Distributions of a Fund's net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), if any, after deducting any available capital loss carryovers,
are declared and paid annually by each Fund, other than Cash Management Fund,
which does not anticipate realizing any such gain. International Securities Fund
and High Yield Fund also distribute any net realized gains from foreign currency
transactions with their annual distribution. All dividends and other
distributions are paid in shares of the distributing Fund at net asset value
(without sales charge), generally determined as of the close of business on the
business day immediately following the record date of such distribution.

TAXES

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

Shares of the Funds are offered only to the Separate Accounts, which are
insurance company separate accounts that fund variable annuity and variable life
insurance contracts. Under the Code, no tax is imposed on an insurance company
with respect to income of a qualifying separate account that is properly
allocable to the value of eligible variable annuity (or variable life insurance)
contracts. Please refer to "Federal Income Tax Status" in the Prospectuses of
Separate Accounts B and C for information as to the tax status of those accounts
and the holders of the Contracts or Policies.

<PAGE>

Each Fund intends to comply with the diversification requirements imposed
by section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on the Fund by the Investment Company Act of 1940, as amended, and Subchapter M
of the Code, place certain limitations on the assets of Separate Accounts B and
C -- and of a Fund, because section 817(h) and those regulations treat the
assets of a Fund as assets of Separate Accounts B and C -- that may be invested
in securities of a single issuer. Specifically, the regulations provide that,
except as permitted by the "safe harbor" described below, as of the end of each
calendar quarter (or within 30 days thereafter) no more than 55% of a Fund's
total assets may be represented by any one investment, no more than 70% by any
two investments, no more than 80% by any three investments and no more than 90%
by any four investments. For this purpose, all securities of the same issuer are
considered a single investment, and while each U.S. Government agency and
instrumentality is considered a separate issuer, a particular foreign government
and its agencies, instrumentalities and political subdivisions are considered
the same issuer. Section 817(h) provides, as a safe harbor, that a separate
account will be treated as being adequately diversified if the diversification
requirements under Subchapter M are satisfied and no more than 55% of the value
of the account's total assets are cash and cash items, government securities and
securities of other RICs. Failure of a Fund to satisfy the section 817(h)
requirements would result in taxation of First Investors Life and treatment of
the Contract holders and Policyowners other than as described in the
Prospectuses of Separate Accounts B and C.

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

GENERAL INFORMATION

Organization. Life Series Fund is a Massachusetts business trust organized
on June 12, 1985. The Board of Trustees of Life Series Fund has authority to
issue an unlimited number of shares of beneficial interest of separate series,
no par value, of Life Series Fund. The shares of beneficial interest of Life
Series Fund are presently divided into ten separate and distinct series. Life
Series Fund does not hold annual shareholder meetings. If requested to do so by
the holders of at least 10% of Life Series Fund's outstanding shares, the Board
of Trustees will call a special meeting of shareholders for any purpose,
including the removal of Trustees.

Custodian. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund, except the International
Securities Fund. Brown Brothers Harriman & Co., 40 Water Street, Boston, MA
02109, is custodian of the securities and cash of the International Securities
Fund and employs foreign sub-custodians to provide custody of the Fund's foreign
assets.

Transfer Agent. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for each Fund and as redemption agent for regular redemptions.

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

<PAGE>

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

Annual and Semi-Annual Reports to Shareholders. It is Life Series Fund's
practice to mail only one copy of its annual and semi-annual reports to any
address at which more than one shareholder with the same last name has indicated
that mail is to be delivered. Additional copies of the reports will be mailed if
requested in writing or by telephone by any shareholder. Life Series Fund will
ensure that an additional copy of such reports are sent to any shareholder who
subsequently changes his or her mailing address.

APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS

STANDARD & POOR'S

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

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

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

2. Nature of and provisions of the obligation;

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

MOODY'S INVESTORS SERVICE, INC.

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

<PAGE>

fundamentally strong position of such issues.

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

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

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

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

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

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

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

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

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

<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

Financial Highlights ...................................................... 4
Investment Objectives and Policies ........................................ 9
How to Buy Shares ......................................................... 27
How to Redeem Shares ...................................................... 27
Management ................................................................ 28
Determination of Net Asset Value .......................................... 30
Dividends and Other Distributions ......................................... 30
Taxes ..................................................................... 30
General Information ....................................................... 31
Appendix A ................................................................ 32

Investment Adviser Custodians
First Investors Management The Bank of New York
Company, Inc. 48 Wall Street
95 Wall Street New York, NY 10286
New York, NY 10005
Brown Brothers
Subadviser Harriman & Co.
Wellington Management 40 Water Street
Company Boston, MA 02109
75 State Street
Boston, MA 02109 Auditors
Tait, Weller & Baker
Transfer Agent Two Penn Center Plaza
Administrative Data Philadelphia, PA 19102-1707
Management Corp.
581 Main Street Legal Counsel
Woodbridge, NJ 07095-1198 Kirkpatrick & Lockhart LLP
1800 M Street, N.W.
Washington, D.C. 20036

No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or the Statement of Additional Information, and if given or made,
such information and representation must not be relied upon as having been
authorized by the Fund or any affiliate thereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby in any state to any person to whom it is unlawful to make
such offer in such state.

<PAGE>

FIRST INVESTORS LIFE SERIES FUND
95 WALL STREET
NEW YORK, NEW YORK 10005

MAILED FROM ZIP CODE 17604

BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 1796

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