SAGE VARIABLE ANNUITY ACCOUNT A
N-4/A, 1999-02-10
Previous: FUND AMERICAN ENTERPRISES HOLDINGS INC, SC 13G/A, 1999-02-10
Next: WEISS PECK & GREER FUNDS TRUST /MA, 497, 1999-02-10



<PAGE>   1
   
     As filed with the Securities and Exchange Commission on February 10, 1999
    

                                                              File No. 333-44751
                                                              File No. 811-08581

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-4

           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933          [ ]
   
              Pre-Effective Amendment No. 2                                 [X]
    
              Post-Effective Amendment No. _____                            [ ]

                          REGISTRATION STATEMENT UNDER
                     THE INVESTMENT COMPANY ACT OF 1940                     [ ]

   
                        Amendment No. 5                                     [X]
    

                       THE SAGE VARIABLE ANNUITY ACCOUNT A
                           (Exact Name of Registrant)

                      SAGE LIFE ASSURANCE OF AMERICA, INC.
                               (Name of Depositor)

                               300 Atlantic Street
                               Stamford, CT 06901
              (Address of Depositor's Principal Executive Offices)

                  Depositor's Telephone Number: (203) 324-6338

                                James F. Bronsdon
                      Sage Life Assurance of America, Inc.
                               300 Atlantic Street
                               Stamford, CT 06901

               (Name and Address of Agent for Service of Process)

                                    Copy to:
                                 Stephen E. Roth
                         Sutherland Asbill & Brennan LLP
                         1275 Pennsylvania Avenue, N.W.
                           Washington, D.C. 20004-2415
<PAGE>   2
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

As soon as practicable after the effective date of the Registration Statement.

Title of Securities: Interests in a separate account under flexible payment
deferred combination fixed and variable annuity contracts.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant files a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>   3
                              CROSS REFERENCE SHEET
                       PURSUANT TO RULE 481(a) AND 495(a)

Showing location in Part A (Prospectus) and Part B (Statement of Additional
Information) of Registration Statement of Information required by Form N-4

                                     PART A


<TABLE>
<CAPTION>
ITEM OF FORM N-4                                                PROSPECTUS CAPTION
- ----------------                                                ------------------


<S>                                                             <C>
1.   Cover Page  ..........................................     Cover Page
2.   Definitions ..........................................     Index of Terms
3.   Synopsis .............................................     Fee Table; Profile
4.   Condensed Financial Information.......................     How is Contract Performance Presented?
5.   General
            (a) Depositor..................................     What other information should I know?
            (b) Registrant.................................     What other information should I know?
            (c) Portfolio Company..........................     What are my investment options?
            (d) Fund Prospectus............................     Cover Page
            (e) Voting Rights..............................     What other information should I know?
            (f) Administrators.............................     What other information should I know?
6. Deductions and Expenses
            (a) General ...................................     What are the expenses under a Contract?
            (b) Sales Load %...............................     Fee Table; Example
            (c) Special Purchase Plan......................     What are the expenses under a Contract?
            (d) Commissions................................     What other information should I know?
            (e) Fund Expenses .............................     Fee Table; Example
            (f) Expenses - Registrant......................     Fee Table; What are the expenses under a Contract?
            (g) Organizational Expenses....................     N/A
7. Contracts
            (a) Persons with Rights........................     What are the Contracts?;
                                                                What are my income payment options?;
                                                                How do I purchase a Contract?;
                                                                How do I access my money?;
                                                                What other information should I know?
            (b) (i) Allocation of Purchase Payments             What are my investment options?
                (ii) Transfers                                  What are my investment options?
                (iii) Exchanges............................     N/A
            (c) Changes ...................................     What other information should I know?
            (d) Inquiries .................................     What are my investment options?;
                                                                What other information
                                                                should I know?
8. Annuity Period..........................................     What are my income payment options?
9. Death Benefit...........................................     Does the Contract have a death benefit?
</TABLE>
<PAGE>   4
<TABLE>
<S>                                                             <C>
10. Purchase and Contract Value
            (a) Purchases..................................     How do I purchase a Contract?
            (b) Valuation..................................     What are my investment options?
            (c) Daily Calculation..........................     What are my investment options?
            (d) Underwriter................................     What other information should I know?
11. Redemptions
            (a) By Owners.................................      How do I access my money?
                By Annuitant..............................      What are my income payment options?
            (b) Texas OR...................................     N/A
            (c) Check Delay................................     How do I access my money?
            (d) Lapse......................................     N/A
            (e) Free Look..................................     What other information should I know?
12. Taxes..................................................     How will my Contract be taxed?
13. Legal Proceedings......................................     What other information should I know?
14. Table of Contents for the Statement of
    Additional Information.................................     Table of Contents of the Statement of
                                                                Additional Information
</TABLE>



                                     PART B

<TABLE>
<CAPTION>
ITEM OF FORM N-4                                                PART B CAPTION
- ----------------                                                --------------


<S>                                                             <C>
15.  Cover Page............................................     Cover Page
16.  Table of Contents.....................................     Table of Contents
17.  General Information and History.......................     N/A
18.  Services
            (a) Fees and Expenses of Registrant............     N/A
            (b) Management Contracts.............               N/A
            (c) Custodian .................................     N/A
                Independent Accountant.....................     Experts
            (d) Assets of Registrant.......................     N/A
            (e) Affiliated Person..........................     N/A
            (f) Principal Underwriter......................     Distribution of the Contracts
19.  Purchase of Securities Being Offered..................     Distribution of the Contracts
            Offering Sales Load............................     N/A
20.  Underwriters..........................................     Distribution of the Contracts
21.  Calculation of Performance Data.......................     Calculation of Historical Performance Data
22.  Annuity Payments......................................     Income Payment Provisions
23.  Financial Statements..................................     Financial Statements
</TABLE>
<PAGE>   5


                                     PART C
                                OTHER INFORMATION

<TABLE>
<CAPTION>
ITEM OF FORM N-4                                                PART C CAPTION
- ----------------                                                --------------


<S>                                                             <C>
24.  Financial Statements and Exhibits.....................     Financial Statements and Exhibits
            (a) Financial Statements.......................     (a) Financial Statements
            (b) Exhibits...................................     (b) Exhibits
25.  Directors and Officers of the Depositor...............     Directors and Officers of the Depositor.
26.  Persons Controlled By or Under Common                      
     Control with the Depositor or Registrant..............     Persons Controlled By or Under Common Control 
                                                                with the Depositor or Registrant
27.  Number of Contract Owners.............................     Number of Contract Owners
28.  Indemnification.......................................     Indemnification
29.  Principal Underwriters................................     Principal Underwriter
30.  Location of Accounts and Records......................     Location of Books and Records
31.  Management Services...................................     Management Services
32.  Undertakings..........................................     Undertakings and Representations
     Signature Page .......................................     Signatures
</TABLE>
<PAGE>   6
                  PROFILE DATED _________________________, 1999
            FLEXIBLE PAYMENT DEFERRED COMBINATION FIXED AND VARIABLE
                               ANNUITY CONTRACTS
                                    Issued By
                     THE SAGE VARIABLE ANNUITY ACCOUNT A AND
                      SAGE LIFE ASSURANCE OF AMERICA, INC.

           THIS PROFILE IS A SUMMARY OF SOME IMPORTANT POINTS THAT YOU
           SHOULD KNOW AND CONSIDER BEFORE PURCHASING A CONTRACT. THE
          CONTRACT IS MORE FULLY DESCRIBED IN THE FULL PROSPECTUS THAT
        ACCOMPANIES THIS PROFILE. PLEASE READ THAT PROSPECTUS CAREFULLY.

"We," "us," "our", "Sage Life" or the "Company" refer to Sage Life Assurance of
America, Inc. "You" and "your" refer to the Owner of a Contract.

1.     WHAT ARE THE CONTRACTS?

       The fixed and variable annuity Contract offered by Sage Life Assurance of
America, Inc. is a contract between you, the Owner, and us, Sage Life, an
insurance company.

       We designed the Contract for use in your long-term financial and
retirement planning. It provides a means for allocating amounts on a
tax-deferred basis to our Variable Account and Fixed Account.

       INVESTMENT FLEXIBILITY. Through our Variable Account you can invest in up
to 33 different investment portfolios (each a "Fund"). These Funds, listed in
Section 4, are professionally managed and use a broad range of investment
strategies (growth and income, aggressive growth, etc.), styles (growth, value,
etc.) and asset classes (stocks, bonds, international, etc.). You can select a
mix of Funds to meet your financial and retirement needs and objectives,
tolerance for risk, and view of the market. Amounts you invest in these Funds
will fluctuate daily based on underlying investment performance. So, the value
of your investment may increase or decrease.

       Through our Fixed Account, you can invest to receive guaranteed rates of
interest for periods of 1, 2, 3, 4, 5, 7, and 10 years. We also guarantee your
principal while it remains in our Fixed Account. However, if you decide to
surrender your Contract, or transfer or access amounts in the Fixed Account
before the end of a Guarantee Period you have chosen, we ordinarily will apply a
Market Value Adjustment. This Adjustment reflects changes in interest rates
since your allocation to the Fixed Account. The Market Value Adjustment may
result in an increase or decrease in the amounts surrendered, transferred, or
accessed.

       As your needs or financial or retirement goals change, your investment
mix can change with them. You may transfer funds among any of the investment
choices in our Fixed or Variable Accounts while continuing to defer current
income taxes.

                                       1
<PAGE>   7
       SAFETY OF SEPARATE ACCOUNTS. Significantly, both the Fixed and Variable
Accounts are considered separate investment accounts of Sage Life. This provides
you with an important safety feature: the assets supporting your allocations to
these Accounts cannot be charged with liabilities arising out of any other
business we may conduct.

       The Contract also provides you with other important features, including a
death benefit, access to your money, and income plan options.

       ACCESS TO AMOUNTS INVESTED. The Contract provides access to your
investment should you need it. During the savings, or Accumulation Phase, your
investment grows tax free until withdrawn. You decide how much to take and when
to take it (certain restrictions apply after the Accumulation Phase).

       Ordinarily, once you access earnings, they are taxed as income. If you
access earnings before you are 59 1/2 years old, you may have to pay an
additional 10% federal tax penalty. Amounts you surrender or withdraw may be
subject to a Market Value Adjustment (positive or negative) if you take the
amount from the Fixed Account.

       PROTECTION FOR YOUR BENEFICIARIES. The Contract also provides a death
benefit feature to protect your family should you die during the Accumulation
Phase. In the event of your untimely death, the Beneficiary of your choice will
never receive less than you have invested in the Contract, and may even receive
more. Your Beneficiary will decide how he or she wishes to receive the death
benefit.

       INCOME PAYMENTS. The payout, or Income Phase, of your Contract begins
when you inform us you want to start receiving regular income payments under the
various income plans we offer. The amount you accumulated during the
Accumulation Phase determines the amount of income payments you receive during
the Income Phase. You can use your Account Value to provide income payments that
are guaranteed, or income payments that vary with underlying investment
performance, or a combination of both. The income payments can be for life,
which means you can't outlive them!

       A portion of each income payment is ordinarily considered a return of
your investment in the Contract. So, only the portion in excess of this amount
is taxed as income!

2.     WHAT ARE MY INCOME PAYMENT OPTIONS?

       Once the Income Phase of your Contract begins, we apply your Account
Value to provide you with regular income payments.

       You can tailor your income to meet your needs by choosing from five
different income plans described below. In explaining the income plans, we are
assuming that you designate yourself as the Annuitant. Of course, you always can
designate someone other than yourself as Annuitant.

                                       2
<PAGE>   8
       Income Plan 1 - Life Annuity: You will receive payments for your life.

       Income Plan 2 - Life Annuity with 10 or 20 Years Certain: You will
              receive payments for your life. However, if you die before the end
              of the guaranteed certain period you select (10 or 20 years), your
              Beneficiary will receive the payments for the remainder of that
              period.

       Income Plan 3 - Joint and Last Survivor Life Annuity: Payments will be
              made as long as either you or a second person you select (such as
              your spouse) is alive.

       Income Plan 4 - Payments for a Specified Period Certain: You will receive
              payments for the number of years you select. However, if you die
              before the end of that period, your Beneficiary will receive the
              payments for the remainder of the guaranteed certain period.

       Income Plan 5 - Annuity Plan: You can use your Account Value to purchase
              any other income plan we offer at the time you want to begin
              receiving regular income payments for which you and the Annuitant
              are eligible.

       You tell us how much of your Account Value to apply to fixed income
payments and to variable income payments. During the Income Phase, you still
have all of the investment choices you had prior to beginning income payments.
However, we currently limit transfers among your investment choices.

       We will allocate the amount of Account Value you apply to provide fixed
income payments to the Fixed Account. The amount of each income payment is
guaranteed and remains level throughout the period you select.

       We will allocate the amount of Account Value you apply to provide
variable income payments to the Variable Account and invest it in the Funds you
select. The amount of each income payment will vary according to the investment
performance of those Funds.

3.     HOW DO I PURCHASE A CONTRACT?

       In most cases, you may purchase a Contract with $25,000 or more.

       In addition, subject to limitations for tax-qualified Contracts, you can
add $1,000 or more to your Contract at any time during the Accumulation Phase.

                                       3
<PAGE>   9
4.     WHAT ARE MY INVESTMENT OPTIONS?

       There are 40 investment options under the Contracts available through our
Variable and Fixed Accounts. These choices are professionally managed and allow
for a broad range of investment strategies, styles and asset classes. Additional
investment options may be available in the future.

       Through our Variable Account you can choose to have your money invested
in one or more of the following 33 Funds that are described in the prospectuses
for the Trusts:

       -      AIM Variable Insurance Funds, Inc.
                [ ] AIM V.I. Government Securities Fund
                [ ] AIM V.I. Growth and Income Fund
                [ ] AIM V.I. International Equity Fund
                [ ] AIM V.I. Value Fund

       -      The Alger American Fund
                [ ] Alger American MidCap Growth Portfolio
                [ ] Alger American Income and Growth Portfolio
                [ ] Alger American Small Capitalization Portfolio

       -      Liberty Variable Investment Trust
                [ ] Colonial High Yield Securities Fund, Variable Series
                [ ] Colonial Small Cap Value Fund, Variable Series
                [ ] Colonial Strategic Income Fund, Variable Series
                [ ] Colonial U.S. Stock Fund, Variable Series
                [ ] Liberty All-Star Equity Fund, Variable Series
                [ ] Newport Tiger Fund, Variable Series
                [ ] Stein Roe Global Utilities Fund, Variable Series

       -      SteinRoe Variable Investment Trust
                [ ] Stein Roe Growth Stock Fund, Variable Series
                [ ] Stein Roe Balanced Fund, Variable Series

       -      MFS(R) Variable Insurance Trust(TM)
                [ ] MFS Growth With Income Series
                [ ] MFS High Income Series
                [ ] MFS Research Series
                [ ] MFS Total Return Series
                [ ] MFS Value Series

       -      Morgan Stanley Universal Funds, Inc.
                [ ] Global Equity Portfolio
                [ ] Mid Cap Value Portfolio

                                       4
<PAGE>   10
                [ ] Value Portfolio

       -      Oppenheimer Variable Account Funds
                [ ] Oppenheimer Bond Fund
                [ ] Oppenheimer Growth Fund
                [ ] Oppenheimer Small Cap Growth Fund

       -      Sage Life Investment Trust
                [ ] EAFE Equity Index Fund
                [ ] S&P 500 Equity Index Fund
                [ ] Money Market Fund

       -      T. Rowe Price Equity Series, Inc.
                [ ] T. Rowe Price Equity Income Portfolio
                [ ] T. Rowe Price Mid-Cap Growth Portfolio
                [ ] T. Rowe Price Personal Strategy Balanced Portfolio

       These Funds do not provide any performance guarantees, and therefore,
their values can increase or decrease depending upon investment performance.

       Through our Fixed Account, you can choose to have your money invested in
one or more of 7 different periods for which we will guarantee your principal
and a rate of interest when your investment is left in the Fixed Account for the
entire period of the guarantee. You currently can choose periods of 1, 2, 3, 4,
5, 7, and 10 years. However, if you decide to surrender your Contract, or
transfer or access amounts before the end of a period you have chosen, we
ordinarily will apply a Market Value Adjustment, which may be positive or
negative depending upon current interest rates.

5. WHAT ARE THE EXPENSES UNDER A CONTRACT?

       The Contract has insurance and investment features. Each has related
costs. Below is a brief summary of the Contract's charges:

       Surrender Charge - None! There are no surrender charges under the
Contract.

       Annual Administration Charge - During the first seven Contract Years
only, we will deduct an annual $40 administration charge. However, there is no
charge if, at the time of deduction, your Account Value is at least $50,000.

       Asset-Based Charges - We deduct Asset-Based Charges for mortality and
expense risks and for certain administrative costs monthly from the amounts you
allocate to the Variable Account. These charges are equal on an annual basis to
1.40% of Variable Account Value, decreasing to 1.25% after the seventh Contract
Year.

                                       5
<PAGE>   11
   
       Purchase Payment Tax Charge - During the first seven Contract Years only,
we will deduct any state premium tax that we incur if you surrender your
Contract or begin receiving regular income payments. This tax charge currently 
ranges from 0% to 3.5% depending upon the state. We currently do not intend to
deduct this charge on or after the eighth Contract Year.
    

       Fund Fees and Expenses - There are also Fund fees and expenses that are
based on the average daily value of your money invested in the Funds. These
charges range on an annual basis from 0.55% to 1.25%, depending upon the Fund.

       Sage Life's business strategy is to reward our long-term customers. So,
as you can see, after the seventh Contract Year we

       eliminate the Annual Administration Charge

       eliminate the Purchase Payment Tax Charge, if any

       reduce Asset-Based Charges

This means more of your investment is working for you!

     The following chart is designed to help you understand expenses under the
Contract.

<TABLE>
<CAPTION>
                                                                                                          Examples of
                                                                                                          Total Expenses
                                                 Total Annual           Total Annual     Total Annual     Paid at the End
 Fund                                            Insurance Charges      Fund Charges     Charges          of 1 Year
 ----                                            -----------------      ------------     -------          ---------

<S>                                              <C>                    <C>              <C>              <C>
AIM VARIABLE INSURANCE FUNDS, INC.:
   AIM V.I. Government Securities Fund           1.53%                   0.87%           2.40%           $25
   AIM V.I. Growth and Income Fund               1.53%                   0.69%           2.22%           $23
   AIM V.I. International Equity Fund            1.53%                   0.93%           2.46%           $25
   AIM V.I. Value Fund                           1.53%                   0.70%           2.23%           $23

THE ALGER AMERICAN FUND:
   Alger American MidCap Growth Portfolio        1.53%                   0.84%           2.37%           $24
   Alger American Income and Growth Portfolio    1.53%                   0.74%           2.27%           $23
</TABLE>

                                       6
<PAGE>   12
<TABLE>
<CAPTION>
                                                                                                          Examples of
                                                                                                          Total Expenses
                                                 Total Annual           Total Annual     Total Annual     Paid at the End
 Fund                                            Insurance Charges      Fund Charges     Charges          of 1 Year
 ----                                            -----------------      ------------     -------          ---------

<S>                                              <C>                    <C>              <C>              <C>
   Alger American Small Capitalization
            Portfolio                            1.53%                  0.89%            2.42%            $25

LIBERTY VARIABLE INVESTMENT TRUST:
   Colonial High Yield Securities Fund,
            Variable Series                      1.53%                  0.80%            2.33%            $24
   Colonial Small Cap Value Fund,
            Variable Series                      1.53%                  1.00%            2.53%            $26
   Colonial Strategic Income Fund,
            Variable Series                      1.53%                  0.80%            2.33%            $24
   Colonial U.S. Stock Fund, Variable Series     1.53%                  0.94%            2.47%            $25
   Liberty All-Star Equity Fund,
            Variable Series                      1.53%                  1.00%            2.53%            $26
   Newport Tiger Fund, Variable Series           1.53%                  1.25%            2.78%            $29
   Stein Roe Global Utilities Fund,
            Variable Series                      1.53%                  0.83%            2.36%            $24

STEINROE VARIABLE INVESTMENT TRUST:
   Stein Roe Growth Stock Fund,
            Variable Series                      1.53%                  0.71%            2.24%            $23
   Stein Roe Balanced Fund,
            Variable Series                      1.53%                  0.66%            2.19%            $23

MFS VARIABLE INSURANCE TRUST:
   MFS Growth With Income Series                 1.53%                  1.00%            2.53%            $26
   MFS High Income Series                        1.53%                  1.00%            2.53%            $26
   MFS Research Series                           1.53%                  0.88%            2.41%            $25
   MFS Total Return Series                       1.53%                  1.00%            2.53%            $26
   MFS Value Series                              1.53%                  1.00%            2.53%            $26

MORGAN STANLEY UNIVERSAL FUNDS, INC.:
   Global Equity Portfolio                       1.53%                  1.15%            2.68%            $28
   Mid Cap Value Portfolio                       1.53%                  1.05%            2.58%            $27
   Value Portfolio                               1.53%                  0.85%            2.38%            $24
</TABLE>

                                       7
<PAGE>   13
<TABLE>
<CAPTION>
                                                                                                          Examples of
                                                                                                          Total Expenses
                                                 Total Annual           Total Annual     Total Annual     Paid at the End
 Fund                                            Insurance Charges      Fund Charges     Charges          of 1 Year
 ----                                            -----------------      ------------     -------          ---------

<S>                                              <C>                    <C>              <C>              <C>
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
   Oppenheimer Bond Fund                         1.53%                  0.78%            2.31%            $24
   Oppenheimer Growth Fund                       1.53%                  0.75%            2.28%            $23
   Oppenheimer Small Cap Growth Fund             1.53%                  0.83%            2.36%            $24

SAGE LIFE INVESTMENT TRUST:
   EAFE Equity Index Fund                        1.53%                  0.90%            2.43%            $25
   S&P 500 Equity Index Fund                     1.53%                  0.55%            2.08%            $21
   Money Market Fund                             1.53%                  0.65%            2.18%            $22

T. ROWE PRICE EQUITY SERIES, INC.:
   T. Rowe Price Equity Income Portfolio         1.53%                  0.85%            2.38%            $24
   T. Rowe Price Mid-Cap Growth Portfolio        1.53%                  0.85%            2.38%            $24
   T. Rowe Price Personal Strategy
            Balanced Portfolio                   1.53%                  0.90%            2.43%            $25
</TABLE>

       Below  is an explanation of what we included in each column of the chart:

       The column "Total Annual Insurance Charges" shows the sum of the
       Asset-Based Charges and the Annual Administration Charge (for purposes of
       the chart, we assume the average Account Value is $30,000 and the Annual
       Administration Charge to be 0.13% of the value of an average Contract).

       The column "Total Annual Fund Charges" shows the fees and expenses for
       each Fund.

   
       A I M Advisors, Inc. has agreed to waive a portion of its fees; the
waiver may not be terminated without the approval of the Fund's board of
directors.
    

       Liberty Variable Investment Trust's Colonial High Yield Securities Fund
and Colonial SmallCap Value Fund did not commence Operations until 1998. The
figures shown are based on

                                       8
<PAGE>   14
   
estimates for the current fiscal year. The charges shown for Colonial Strategic
Income Fund and Liberty All-Star Equity Fund during 1997 reflect the fact that
the Funds' investment adviser agreed to reimburse the Colonial Strategic Income
Fund and Liberty All-Star Equity Fund for certain expenses incurred by each
Fund. 
    

   
       The charges shown for MFS Variable Insurance Trust during 1997 reflect
the fact that the Fund's investment adviser agreed to reimburse the Growth with
Income Series, High Income Series, Total Return Series and Value Series for
certain expenses incurred by each Fund.
    

   
       The charges shown for Morgan Stanley Universal Funds, Inc. during 1997
reflect the fact that the Fund's investment advisers agreed to reimburse the
Global Equity Portfolio, Mid Cap Value Portfolio, and Value Portfolio for
certain expenses incurred by each Fund. 
    

       Oppenheimer Variable Account Fund's Small Cap Growth Fund did not
commence operations until 1998. The figures shown are based on estimates for the
current fiscal year.

   
       Sage Life Investment Trust has not commenced operations. The charges
shown are based on estimates and reflect the fact that the Trust's investment
adviser agrees to reimburse each Fund for certain expenses. 
    

       The column "Total Annual Charges" shows the sum of "Total Annual
Insurance Charges" and "Total Annual Fund Charges."

       The next column shows you examples of the charges, in dollars, you could
pay under a Contract for each $1,000 you invested. The example assumes that your
Contract earns 5% annually before charges.

       For more information about expenses under a Contract, please refer to the
"Fee Table" in the full Prospectus that accompanies this Profile.

6.   HOW WILL MY CONTRACT BE TAXED?

            During the Accumulation Phase, your earnings are not taxed unless
you take them out. If

                                       9
<PAGE>   15
you take money out, earnings come out first and are taxed as income. If you are
younger than 59 1/2 when you take money out, you also may be charged a 10%
federal tax penalty on the withdrawn earnings.

       Income payments during the Income Phase are considered partly a return of
your original investment. That part of each payment is not taxable as income.
However, once you have recovered all of your original investment, income
payments will then be fully taxable.

       Special tax rules apply to withdrawals from a new type of IRA called the
Roth IRA.

7. HOW DO I ACCESS MY MONEY?

       There are a number of ways to withdraw money from your Contract. You can
tailor your income to meet your near-term or lifelong liquidity needs.

       During the Accumulation Phase, if you want to take money out of your
Contract, you can choose among several different options.

       You can withdraw some of your money.

       You can surrender your Contract and take all of your money.

       You can take withdrawals using our systematic partial withdrawal program.

       You can apply your Account Value to an Income Plan.

       Keep in mind that if you take the amount from the Fixed Account, a Market
Value Adjustment ordinarily will apply. If you are younger than 59 1/2 when
you take money out, you may owe a 10% federal tax penalty in addition to the
income tax that will apply to the extent that you have gain in your Contract. 
Please remember that withdrawals will reduce your death benefit.

       Once you start receiving regular income payments and if you selected the
"payments for a specified period certain" income plan, you may request a
withdrawal.

8.     HOW IS CONTRACT PERFORMANCE PRESENTED?

       Because our Variable Sub-Accounts have not been in operation for more
than a year, we cannot show you how the Funds performed in the Variable Account.
When they have been in operation for a year or more, we will show you the Funds'
performance using standard methods prescribed by the SEC.

       Please remember that the performance data represents past performance.
Amounts you invest in the Variable Account will fluctuate daily based on
underlying Fund investment

                                       10
<PAGE>   16
performance, so the value of your investment may increase or decrease.

9.     DOES THE CONTRACT HAVE A DEATH BENEFIT?

       Your Contract provides a death benefit for your Beneficiary.

       We will pay a death benefit to the Beneficiary of your choice in the
event of your untimely death prior to the Income Phase. This provides comfort
knowing your Beneficiary will receive the greatest of the following:

       the current Account Value on the date we receive proof of death;

       100% of the sum of all purchase payments you have invested in your
       Contract, less any withdrawals you have made (including any associated
       Market Value Adjustment incurred); or

       the highest anniversary value on or before you reach age 80.

       The highest anniversary value is equal to the greatest anniversary value
attained in the following manner. When we receive proof of death, we will
calculate an anniversary value for each Contract Anniversary prior to the date
of the Owner's death, but not beyond the Owner's attained age 80. An anniversary
value for a Contract Anniversary is equal to (1) the Account Value on that
Contract Anniversary, (2) increased by the dollar amount of any purchase
payments made since the Contract Anniversary, and (3) reduced proportionately by
any withdrawals (including any associated Market Value Adjustment incurred)
taken since that Contract Anniversary. (By proportionately, we take the
percentage by which the withdrawal decreases the Account Value and we reduce the
sum of (1) and (2) by that percentage.)

10.    WHAT OTHER INFORMATION SHOULD I KNOW?

       The Contract has several additional features available to you at no
additional charge:

       FREE LOOK RIGHT: You have the right to return your Contract to us at our
Customer Service Center or to the registered representative who sold it to you,
and have us cancel the Contract within a certain number of days (usually 10 days
from the date you receive the Contract, but some states require different
periods).

       If you exercise this right, we will cancel your Contract as of the
Business Day we receive it and send you a refund equal to your Account Value
plus any charges we have deducted on or before the date we received the returned
Contract, or if required by the law of your state, your initial purchase payment
(less any withdraws previously taken). In the states where we are required to
return purchase payment less withdrawals, if you allocated amounts to the
Variable Account, we will temporarily allocate those amounts to the Money Market
Fund until the Free

                                       11
<PAGE>   17
Look Period expires.

       DOLLAR-COST AVERAGING PROGRAM: Under our optional Dollar-Cost Averaging
Program, you may choose to transfer a set dollar amount systematically from the
Money Market Fund and/or from specially designated Fixed Sub-Accounts to any
other Variable Sub-Account, subject to certain limitations. By investing the
same amount on a regular basis, you don't have to worry about timing the market.
Since you invest the same amount each period, you automatically acquire more
units when market values fall and fewer units when they rise. The potential
benefit is to lower your average cost per unit. This proven investment technique
does not guarantee that any Fund will gain in value. It also will not protect
against a decline in value if market prices fall. However, if you can continue
to invest regularly throughout changing market conditions, this program can be
an effective strategy to help meet your long-term or retirement goals. Due to
the effect of interest that continues to be paid on the amount remaining in the
Money Market Fund or the specially designated Fixed Sub-Account, the amounts
that we transfer will vary slightly from month to month.

       ASSET ALLOCATION PROGRAM: An optional Asset Allocation Program is
available if you do not wish to make your own particular investment decisions.
This investment planning tool is designed to find an asset mix that attempts to
achieve the highest expected return based upon your tolerance for risk, and
consistent with your needs and objectives. Bear in mind, that the use of an
asset-allocation model does not guarantee investment results.

       AUTOMATIC PORTFOLIO REBALANCING PROGRAM: Our optional Automatic Portfolio
Rebalancing Program can help prevent a well-conceived investment strategy from
becoming diluted over time. Investment performance will likely cause the
allocation percentages you originally selected to shift. With this program, you
can instruct us to automatically rebalance your Contract to your original
percentages on a quarterly basis. Money invested in the Fixed Account is not
part of this program.

11.    HOW CAN I MAKE INQUIRIES?

       If you need further information about the Contracts, please write or call
us at our Customer Service Center (877) TEL-SAGE (835-7243), or contact an
authorized registered representative. The address of our Customer Service Center
office is 1290 Silas Deane Highway, Wethersfield, CT 06109.

                                       12
<PAGE>   18
                       PROSPECTUS DATED ___________, 1999
                      SAGE LIFE ASSURANCE OF AMERICA, INC.
        FLEXIBLE PAYMENT DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY
                                    CONTRACTS
                                    ISSUED BY
                     THE SAGE VARIABLE ANNUITY ACCOUNT A AND
                      SAGE LIFE ASSURANCE OF AMERICA, INC.

Executive Office:                    Customer Service Center:
300 Atlantic Street                  1290 Silas Deane Highway
Stamford, CT  06901                  Wethersfield, CT 06109
                                     Telephone: (877) 835-7243 (Toll Free)

       UNLESS OTHERWISE INDICATED, THIS PROSPECTUS DESCRIBES THE OPERATION OF
THE CONTRACTS BEFORE THE INCOME DATE. DEFINITIONS OF CERTAIN TERMS USED IN THIS
PROSPECTUS MAY BE FOUND BY REFERRING TO THE INDEX OF TERMS.

       
   
This Prospectus describes flexible payment deferred combination fixed and
variable annuity contracts for individuals and groups offered by Sage Life 
Assurance of America, Inc. We designed the Contracts for use in your long-term
financial and retirement planning. They provide a means for investing on a
tax-deferred basis in our Variable Account and our Fixed Account. You can
purchase a Contract by making a minimum initial purchase payment. After
purchase, you determine the amount and timing of any additional purchase
payments.
    

       You may allocate purchase payments and transfer Account Value to our
Variable Account and also to our Fixed Account within certain limits. We divided
the Variable Account into 33 Sub-Accounts.

       Each Variable Sub-Account invests in a corresponding Fund of AIM Variable
Insurance Funds, Inc., The Alger American Fund, Liberty Variable Investment
Trust, SteinRoe Variable Investment Trust, MFS(R) Variable Insurance Trust(TM),
Morgan Stanley Universal Funds, Inc., Oppenheimer Variable Account Funds, Sage
Life Investment Trust, or T. Rowe Price Equity Series, Inc. (collectively, the
"Trusts"). The accompanying prospectuses describe each of the Funds, including
the risks of investing in each Fund, and provide other information about the
Trusts.

       Your Account Value will vary daily as a function of the investment
performance of the Variable Sub-Accounts and any interest we credit under our
Fixed Account. We do not guarantee any minimum Account Value for amounts you
allocate to the Variable Account. We guarantee a minimum fixed rate of interest
for specified periods of time on the amounts you allocate to the Fixed Account.
However, amounts withdrawn, surrendered, transferred, or applied to an income
plan from the Fixed Account ordinarily will be subject to a Market Value
Adjustment, which may increase or decrease such amounts. The Contracts provide
additional benefits, including five income plan options, a death benefit upon
any Owner's
<PAGE>   19
death before the Income Date, and optional programs including dollar-cost
averaging, asset allocation, automatic portfolio rebalancing, and systematic
partial withdrawals.

       This Prospectus sets forth basic information about the Contracts, the
Variable Account, and the Fixed Account that you should know before purchasing a
Contract. You should read the Prospectus carefully and retain it for future
reference.

       The Statement of Additional Information contains more information about
the Contracts and the Variable Account, is dated the same as this Prospectus,
and is incorporated herein by reference. The Table of Contents for the Statement
of Additional Information is on page ____ of this Prospectus. It has been filed
with the Securities and Exchange Commission. You may obtain a copy of the
Statement of Additional Information free of charge by contacting our Customer
Service Center at the address or phone number shown above. You may also obtain a
copy of the Prospectus and Statement of Additional Information by accessing the
Securities and Exchange Commission's website at http://www.sec.gov.

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS
PROSPECTUS MUST BE ACCOMPANIED BY THE CURRENT PROSPECTUS FOR EACH OF THE TRUSTS.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
<PAGE>   20
                                TABLE OF CONTENTS



Index of Terms..................................................................
Fee Table.......................................................................
1. What are the Contracts?......................................................
2. What are my Income Payment Options?..........................................
3. How do I Purchase a Contract?................................................
    Initial Purchase Payment....................................................
    Issuance of a Contract......................................................
    Free Look Right to Cancel Contract..........................................
    Making Additional Purchase Payments.........................................
4. What are my Investment Options?..............................................
    Purchase Payments Allocations...............................................
    Variable Sub-Account Investment Options.....................................
    Fixed Account Investment Options............................................
    Market Value Adjustment.....................................................
    Transfers...................................................................
    Telephone Transfers.........................................................
    Powers of Attorney..........................................................
    Dollar-Cost Averaging Program...............................................
    Asset Allocation Program....................................................
    Automatic Portfolio Rebalancing Program.....................................
    Account Value...............................................................
    Surrender Value.............................................................
    Variable Account Value......................................................
    Accumulation Unit Value.....................................................
    Net Investment Factor.......................................................
    Fixed Account Value.........................................................
5. What are the Expenses under a Contract?......................................
    Surrender Charge............................................................
    Annual Administration Charge................................................
    Transfer Charge.............................................................
    Asset-Based Charges.........................................................
    Fund Expenses...............................................................
6. How will my Contract be Taxed?...............................................
    Tax Status of the Contract..................................................
    Tax Treatment of Annuities..................................................
    Taxation of a Non-Qualified Contract........................................
    Taxation of a Qualified Contract............................................
    Other Tax Consequences......................................................

                                       i
<PAGE>   21
 7. How do I access my Money?...................................................
     Withdrawals................................................................
     Systematic Partial Withdrawal Program......................................
     IRA Partial Withdrawal Program.............................................
     Requesting Payments........................................................
 8. How is Contract Performance Presented?......................................
 9. Does the Contract have a Death Benefit?.....................................
     Proof of Death.............................................................
10. What Other Information Should I Know?.......................................
     Separate Accounts..........................................................
     Modification...............................................................
     Distribution of the Contacts...............................................
     Experts....................................................................
     Legal Proceedings..........................................................
     Reports to Contract Owners.................................................
     Assignment.................................................................
     Change of Owner, Beneficiary, or Annuitant.................................
     Misstatement and Proof of Age, Sex, or Survival............................
     Incontestability...........................................................
     Authority to Make Agreements...............................................
     Preparing for the Year 2000................................................
     Financial Statements.......................................................
11. How Can I Make Inquiries?...................................................
12. Additional Information about Sage Life Assurance of America, Inc.
     History and Business.......................................................
     Selected Financial Data....................................................
     Transactions with Sage Insurance Group.....................................
     Employees..................................................................
     Properties.................................................................
     State Regulation...........................................................
     Directors and Executive Officers...........................................


FINANCIAL STATEMENTS OF SAGE LIFE ASSURANCE OF AMERICA, INC.

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

APPENDIX A

APPENDIX B

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE.

                                       ii
<PAGE>   22
                                 INDEX OF TERMS

We have tried to make this Prospectus as readable and understandable as
possible. However, for you to understand how the Contracts work, we have had to
use certain terms that have special meanings. We define these terms below.

Account Value - The Account Value is the entire amount we hold under your
Contract during the Accumulation Phase. It is equal to the sum of the Variable
Account Value and Fixed Account Value.

Accumulation Phase - The Accumulation Phase is the period during which you
accumulate savings under your Contract.

Accumulation Unit - An Accumulation Unit is the unit of measure we use before
the Income Date to keep track of the value of each Variable Sub-Account.

Annuitant - The Annuitant is the natural person whose age determines the maximum
Income Date and the amount and duration of income payments involving life
contingencies. The Annuitant may also be the person to whom any payment will be
made starting on the Income Date.

Asset-Based Charges - The Asset-Based Charges are charges for mortality and
expense risks and for administrative costs assessed monthly against the assets
of the Variable Account. After the Income Date, these charges are called
Variable Sub-Account Charges and are deducted daily from the assets of the
Variable Account.

Beneficiary - The Beneficiary is the person or persons to whom we pay a death
benefit if any Owner dies before the Income Date.

Business Day - A Business Day is any day the New York Stock Exchange ("NYSE") is
open for trading and we are open for business, exclusive of (i) Federal
holidays, (ii) any day on which an emergency exists making the disposal or fair
valuation of assets in the Variable Account not reasonably practicable, and
(iii) any day on which the Securities and Exchange Commission ("SEC") permits a
delay in the disposal or valuation of assets in the Variable Account.

Code - The Code is the Internal Revenue Code of 1986, as amended.

Contracts - The Contracts are flexible payment deferred combination fixed and
variable annuity contracts offered by us, Sage Life Assurance of America, Inc.
In some jurisdictions, we issue the Contracts directly to individuals. In most
jurisdictions, however, the Contracts are only available as a group contract. We
issue a group Contract to or on behalf of a group. Individuals who are part of a
group to which we issue a Contract receive a certificate that recites
substantially all of

                                       1
<PAGE>   23
the provisions of the group Contract. Throughout this Prospectus and unless
otherwise stated, the term "Contract" refers to individual contracts, group
Contracts, and certificates for group Contracts.

Contract Anniversary - A Contract Anniversary is each anniversary of the
Contract Date.

Contract Date - The Contract Date is the date an individual Contract or a
certificate for a group Contract is issued at our Customer Service Center.

Contract Year - A Contract Year is each and every consecutive twelve-month
period beginning on the Contract Date and the anniversaries thereof.

Customer Service Center - The Customer Service Center is where we provide
service to you. The administrator of our center is Financial Administration
Services, Inc. The mailing address and telephone number of the Customer Service
Center are shown on the first page of this Prospectus.

Executive Office - The Executive Office is our main office. The mailing address
of our Executive Office is shown on the first page of this Prospectus.

Expiration Date - The Expiration Date is the last day in a Guarantee Period. In
the Contract, this is referred to as the "Expiry Date."

Fixed Account - The Fixed Account is The Sage Fixed Interest Account A. It is a
separate investment account of ours under state insurance law (but is not
required to be nor has it been registered under the federal securities laws)
into which purchase payments may be invested or Account Value may be
transferred. In certain states, we refer to the Fixed Account as the Interest
Account.

Fixed Account Value - The Fixed Account Value is the sum of the value of each
Fixed Sub-Account on a Business Day during the Accumulation Phase.

Fixed Sub-Account - A Fixed Sub-Account is established when a purchase payment
is invested or an amount is transferred to the Fixed Account. Each Fixed
Sub-Account is credited with a Guaranteed Interest Rate for a specified
Guarantee Period.

Fund - A Fund is an investment portfolio in which a Variable Sub-Account
invests.

General Account - The General Account consists of all our assets other than
those held in any separate investment accounts.

Guaranteed Interest Rate - A Guaranteed Interest Rate is the effective annual
interest rate that we

                                       2
<PAGE>   24
will credit for a specified Guarantee Period for amounts allocated to a Fixed
Sub-Account. The Guaranteed Interest Rate will never be less than the minimum
shown in your Contract.

Guarantee Period - A Guarantee Period is a period of years for which a specified
effective annual interest rate (Guaranteed Interest Rate) is guaranteed by us.
Interest is credited daily at a rate to yield the declared annual Guaranteed
Interest Rate.

Income Date - The Income Date is the date you select for your income payments to
begin.

Income Phase - The Income Phase starts on the Income Date and is the period
during which you receive income payments.

Income Unit - An Income Unit is the unit of measure we use to calculate the
amount of income payments under a variable income plan option.

Market Value Adjustment - A Market Value Adjustment is a positive or negative
adjustment that may apply to a surrender, withdrawal, or transfer, and to
amounts applied to an income plan from a Fixed Sub-Account before the end of its
Guarantee Period.

Net Asset Value - The Net Asset Value is the price of one share of a Fund.

Owner - The Owner is the person or persons who owns (or own) a Contract.
Provisions relating to action by the Owner mean, in the case of joint Owners,
both Owners acting jointly. In the context of a Contract issued on a group
basis, Owners refer to holders of certificates under the group Contract.

Satisfactory Notice - Satisfactory Notice is a notice or request authorized by
you, in a form satisfactory to us, received at our Customer Service Center.

Surrender Value - The Surrender Value is the amount you receive upon surrender
of your Contract before the Income Date.

Valuation Period - The Valuation Period is the period between one calculation of
an Accumulation Unit value and the next calculation. Normally, we calculate
Accumulation Units once each Business Day, but we can delay this calculation if
an emergency exists, making disposal of or fair valuation of assets in the
Variable Account not reasonably practicable, or if the SEC permits such
deferral.

Variable Account - The Variable Account is The Sage Variable Annuity Account A.
It is a separate investment account of ours under the federal securities laws
into which purchase payments may be invested or Account Value may be
transferred.

                                       3
<PAGE>   25
Variable Account Value - The Variable Account Value is the sum of the value of
each Variable Sub-Account on a Business Day during the Accumulation Phase.

Variable Sub-Account - A Variable Sub-Account is a division of the Variable
Account that invests in shares of a particular Fund.

Variable Sub-Account Charges - Variable Sub-Account Charges are Asset-Based
Charges that are deducted daily from the assets of the Variable Account after
the Income Date.

"We", "us", "our", "Sage Life" or the "Company" is Sage Life Assurance of
America, Inc.

"You" or "your" is the Owner of a Contract. You are entitled to exercise all
rights under a Contract. However, if you designate an irrevocable beneficiary,
you may need the consent of that beneficiary before you exercise your rights
under your Contract. Your death before the Income Date initiates payment of the
death benefit.

                                       4
<PAGE>   26
                                    FEE TABLE

The purpose of this Fee Table is to assist you in understanding the expenses
that you will pay directly or indirectly when you invest in the Contract.

TRANSACTION EXPENSES

       Sales Load Imposed on Purchases (as a percentage of purchase
       payments)........................................................... None

       Surrender Charge.................................................... None

       Transfer Charge(1)..................................................  $ 0

       Annual Administration Charge
       Contract Years 1-7(2)................................................ $40
       After Contract Year 7................................................ $ 0

In addition, the amount of any state and local taxes levied by any governmental
entity on purchase payments may be deducted from your Account Value when such
taxes are incurred. We reserve the right to defer the collection of this charge
and deduct it against your Account Value on the surrender of a Contract, or on
application of Account Value to provide income payments. We refer to this as the
Purchase Payment Tax Charge.

VARIABLE ACCOUNT ANNUAL EXPENSES(3) (deducted monthly as a percentage of the
Variable Account Value)

                                                            Contract Years
                                                            --------------
                                                            1 - 7         8 +
                                                            -----         ---
            Mortality and Expense Risk Charge               1.25%         1.10%
            Asset-Based Administrative Charge               0.15%         0.15%
                                                            -----         -----
            Total Asset-Based Charges                       1.40%         1.25%

Fund Charges. The fees and expenses for each of the Funds (as a percentage of
net assets) for the year ended December 31, 1997 are set forth in the following
table. For more information on these fees and expenses, see the prospectuses for
the Trusts that accompany this Prospectus.
                                       5

<PAGE>   27
FUND ANNUAL EXPENSES (as a percentage of average daily net assets of a Fund)


   
<TABLE>
<CAPTION>
                                      Management     Other                
                                      Fees (after    Expenses (after      
                                      fee waiver as  reimbursement-    Total
            Fund                      applicable)    as applicable)    Expenses
            ----                      -------------  --------------    --------
                                                                               
<S>                                       <C>            <C>           <C>     
AIM VARIABLE INSURANCE FUNDS, INC.:                                            
  AIM V.I. Government                                                          
    Securities Fund                       0.50%          0.37%         0.87%(4)
  AIM V.I. Growth and                                                          
    Income Fund                           0.63%          0.06%         0.69%(4)
  AIM V.I. International                                                       
    Equity Fund                           0.75%          0.18%         0.93%(4)
  AIM V.I. Value Fund                     0.62%          0.08%         0.70%(4)
                                                                               
THE ALGER AMERICAN FUND:                                                       
  Alger American MidCap                                                        
    Growth Portfolio                      0.80%          0.04%         0.84%   
  Alger American Income and                                                    
    Growth Portfolio                      0.625%         0.115%        0.74%   
  Alger American Small                                                         
    Capitalization Portfolio              0.85%          0.04%         0.89%   
                                                                               
LIBERTY VARIABLE INVESTMENT TRUST:                                             
  Colonial High Yield Securities                                               
    Fund, Variable Series                 0.60%          0.20%         0.80%(5)
  Colonial Small Cap Value Fund,                                               
    Variable Series                       0.80%          0.20%         1.00%(5)
  Colonial Strategic Income Fund,                                              
    Variable Series                       0.63%          0.17%         0.80%(6)
  Colonial U.S. Stock Fund,                                                    
    Variable Series                       0.80%          0.14%         0.94%   
  Liberty All-Star Equity Fund,                                                
    Variable Series                       0.35%          0.65%         1.00%(6)
  Newport Tiger Fund,                                                          
    Variable Series                       0.90%          0.35%         1.25%   
  Stein Roe Global Utilities                                                   
    Fund, Variable Series                 0.65%          0.18%         0.83%   
</TABLE>                                                        
    

                                       6
<PAGE>   28
<TABLE>
<CAPTION>
                                    Management       Other  
                                    Fees (after      Expenses (after  
                                    fee waiver       reimbursement-    Total
            Fund                    as applicable)   as applicable)    Expenses
            ----                    --------------   --------------    --------
                                                                      
<S>                                      <C>              <C>          <C>
                                                                      
STEINROE VARIABLE INVESTMENT TRUST:                                   
   Stein Roe Growth Stock Fund,                                       
     Variable Series                     0.65%            0.06%        0.71%
   Stein Roe Balanced Fund,                                           
     Variable Series                     0.60%            0.06%        0.66%
                                                                      
MFS VARIABLE INSURANCE TRUST:                                         
   MFS Growth With Income Series         0.75%            0.25%(7)     1.00%(7)
   MFS High Income Series                0.75%            0.25%(7)     1.00%(7)
   MFS Research Series                   0.75%            0.13%        0.88%
   MFS Total Return Series               0.75%            0.25%(7)     1.00%(7)
   MFS Value Series                      0.75%            0.25%(7)     1.00%(7)
                                                                      
MORGAN STANLEY UNIVERSAL                                              
  FUNDS, INC.(SM):                                                    
   Global Equity Portfolio               0.00%            1.15%        1.15%(8)
   Mid Cap Value Portfolio               0.00%            1.05%        1.05%(8)
   Value Portfolio                       0.00%            0.85%        0.85%(8)
                                                                      
OPPENHEIMER VARIABLE FUNDS:                                           
   Oppenheimer Bond Fund                 0.73%            0.05%        0.78%
   Oppenheimer Growth Fund               0.73%            0.02%        0.75%
   Oppenheimer Small Cap                                              
   Growth Fund                           0.75%            0.08%        0.83%(9)
                                                                      
SAGE LIFE INVESTMENT TRUST:                                           
   EAFE Equity Index Fund                0.73%            0.17%        0.90%(10)
   S&P 500 Equity Index Fund             0.38%            0.17%        0.55%(10)
   Money Market Fund                     0.48%            0.17%        0.65%(10)
                                                                      
T. ROWE PRICE EQUITY SERIES, INC.:                                    
   T. Rowe Price Equity Income                                        
     Portfolio                           0.85%            0.00%        0.85%
   T. Rowe Price Mid-Cap                                              
     Growth Portfolio                    0.85%            0.00%        0.85%
   T. Rowe Price Personal                                             
     Strategy Balanced Portfolio         0.90%            0.00%        0.90%
</TABLE>                                             
                                                        
                                       7
<PAGE>   29


(1)    Currently, there is no transfer charge. However, we reserve the right to
charge up to $25 for the 13th and each subsequent transfer during a Contract
Year.

(2)    We waive the Annual Administration Charge if the Account Value is at
least $50,000 on the date of deduction.

(3)    We call the Asset-Based Charges Variable Sub-Account Charges and deduct
them on a daily basis after the Income Date. See "What are the Expenses under
the Contract?" on page __.

   
(4)    A I M Advisors, Inc. has agreed to waive a portion of its fees; the
waiver may not be terminated without the approval of the Fund's board of
directors.
    

(5)    Liberty Variable Investment Trust's Colonial High Yield Securities Fund
and Colonial Small Cap Value Fund did not commence operations until 1998. The
figures shown are based on estimates for the current fiscal year.

   
(6)    Without reimbursements, the management fees, the other expenses, and 
total expenses for each of the following Liberty Variable Investment Trust 
Funds during 1997 would have been: Colonial Strategic Income Fund, .65%, .17%, 
and .82%; and Liberty All-Star Equity Fund, .80%, .65% and 1.45%.
    

   
(7)    Without reimbursements, the management fees, other expenses, and total 
expenses for each of the following MFS Variable Insurance Trust series during
1997 would have been: Growth with Income Series, .75%, .35%, and 1.10%; High 
Income Series, .75%, .40%, and 1.15%; Total Return Series, .75%, .27%, and
1.02%; and Value Series, .75%, 1.33%, and 2.08%.
    

   
(8)    Without reimbursements, the management fees, the other expenses, and 
total expenses for each of the following Morgan Stanley Universal Funds, Inc.
portolios would have been: Global Equity Portfolio, .80%, 1.63%, and 2.43%; 
Mid Cap Value Portfolio, .75%, 1.38%, and 2.13%; and Value Portfolio, .55%,
1.32%, and 1.87%.
    

(9)    Oppenheimer Variable Account Fund's Small Cap Growth Fund did not
commence operations until 1998. The figures shown are based on estimates for the
current fiscal year.

   
(10)   These Funds have not commenced operations. The figures shown are based on
estimates. Without reimbursements, the management fees, the other expenses, and
total expenses for each of the Sage Life Investment Trust Funds would have
been: EAFE Equity Index Fund, .90%, .17%, and 1.07%; S&P 500 Equity Index 
Fund, .55%, .17%, and .72%; and Money Market Fund, .65%, .17% and .82%.
    

EXAMPLES

       The purpose of the following examples is to demonstrate the expenses that
you would pay on a $1,000 investment in the Variable Account. We calculate the
examples based on the fees and charges shown in the tables above. For a more
complete description of these expenses, see "What are the Expenses under a
Contract?" beginning on page __ of this Prospectus, and see

                                       8
<PAGE>   30
the prospectuses for the Trusts. The Examples assume that the average Account
Value is $30,000, and that you have invested all your money in the Variable
Account.

       You should not consider the Examples a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In addition,
we do not reflect Purchase Payment Tax Charges. These charges may apply
depending on the state where the Contract is sold. You might also incur transfer
fees if you make more than twelve transfers in a Contract Year.

       See "Transfer Charge," page _. The assumed 5% annual rate of return is
hypothetical. You should not consider it to be a representation of past or
future annual returns, which may be greater or less than this assumed rate.

       You would pay the following expenses on a $1,000 initial purchase
       payment, assuming a 5% annual return on assets and the charges listed in
       the Fee Table above.

<TABLE>
<CAPTION>
                                                      If you surrender or if you
                                                      do not surrender your Contract
Fund                                                  at the end of each time period
- ----

                                                      1 Year       3 Years
                                                      ------       -------

<S>                                                     <C>          <C>
AIM  VARIABLE INSURANCE FUNDS, INC.:
  AIM V.I. Government Securities Fund                   $25          $78
  AIM V.I. Growth and Income  Fund                      $23          $72
  AIM V.I. International Equity Fund                    $25          $80
  AIM V.I. Value Fund                                   $23          $72

THE ALGER AMERICAN FUND:
  Alger American MidCap Growth Portfolio                $24          $77
  Alger American Income and Growth Portfolio            $23          $74
  Alger American Small Capitalization Portfolio         $25          $78
</TABLE>


                                       9
<PAGE>   31
<TABLE>
<CAPTION>
                                                            If you surrender or if you
                                                            do not surrender your Contract
Fund                                                        at the end of each time period
- ----

                                                            1 Year       3 Years
                                                            ------       -------

<S>                                                         <C>          <C>

LIBERTY VARIABLE INVESTMENT TRUST:
 Colonial High Yield Securities Fund, Variable Series       $24            $76
 Colonial Small Cap Value Fund, Variable Series             $26            $82
 Colonial Strategic Income Fund, Variable Series            $24            $76
 Colonial U.S. Stock Fund, Variable Series                  $25            $80
 Liberty All-Star Equity Fund, Variable Series              $26            $82
 Newport Tiger Fund, Variable Series                        $29            $90
 Stein Roe Global Utilities Fund, Variable Series           $24            $76


STEINROE VARIABLE INVESTMENT TRUST:
 Stein Roe Growth Stock Fund, Variable Series               $23            $73
 Stein Roe Balanced Fund, Variable Series                   $23            $71


MFS VARIABLE INSURANCE TRUST:
 MFS Growth With Income Series                              $26            $82
 MFS High Income Series                                     $26            $82
 MFS Research Series                                        $25            $78
 MFS Total Return Series                                    $26            $82
 MFS Value Series                                           $26            $82

MORGAN STANLEY UNIVERSAL FUNDS, INC.:
 Global Equity Portfolio                                    $28            $87
 Mid Cap Value Portfolio                                    $27            $84
 Value Portfolio                                            $24            $77
</TABLE>


                                       10
<PAGE>   32
<TABLE>
<CAPTION>
                                                            If you surrender or if you
                                                            do not surrender your Contract
Fund                                                        at the end of each time period
- ----

                                                            1 Year       3 Years
                                                            ------       -------

<S>                                                         <C>          <C>
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
 Oppenheimer Bond Fund                                       $24           $75
 Oppenheimer Growth Fund                                     $23           $74
 Oppenheimer Small Cap Growth Fund                           $24           $76


SAGE LIFE INVESTMENT TRUST:
 EAFE Equity Index Fund                                      $25           $79
 S&P 500 Equity Index Fund                                   $21           $67
 Money Market Fund                                           $22           $71

T. ROWE PRICE EQUITY SERIES, INC.:
 T. Rowe Price Equity Income Portfolio                       $24           $77
 T. Rowe Price Mid-Cap Growth Portfolio                      $24           $77
 T. Rowe Price Personal Strategy Balanced Portfolio          $25           $79
</TABLE>


1.     WHAT ARE THE CONTRACTS?

       The Contracts are flexible payment deferred combination fixed and
variable annuity Contracts offered by us, Sage Life Assurance of America, Inc.
Throughout this Prospectus, the term "Contracts" refers to individual Contracts,
group Contracts, and certificates for group Contracts. We designed the Contracts
for use in long-term financial and retirement planning. They provide a means for
investing amounts on a tax-deferred basis in our Variable Account and our Fixed
Account.

       Under the terms of the Contracts, we promise to pay you (or the
Annuitant, if the Owner is other than an individual) regular income payments
after the Income Date. Until the Income Date, you may make additional purchase
payments under the Contract, and will ordinarily not be taxed on increases in
the value of your Contract as long as you do not take distributions. When you
use the Contract in connection with tax-qualified retirement plans, federal
income taxes may be deferred on your purchase payments, as well as on increases
in the value of your Contract. See "How will my Contract be Taxed?" on page ___.
The Contracts may not be available in all states.

                                       11
<PAGE>   33


       When you make purchase payments, you can allocate those purchase payments
to one or more of the 33 subdivisions of the Variable Account, known as
"Variable Sub-Accounts." Purchase payments allocated to a Variable Sub-Account
will be invested solely in a Fund, as you direct. Your Account Value in a
Variable Sub-Account will vary according to the investment performance of the
corresponding Fund. Depending on market conditions, your value in each Variable
Sub-Account could increase or decrease. No minimum value is guaranteed. The
total of the values in the Variable Sub-Accounts is called the Variable Account
Value.

       You can also allocate purchase payments to our Fixed Account. See "Fixed
Account Investment Option, " page ___. The Fixed Account includes Fixed
Sub-Accounts to which we credit fixed rates of interest for the Guarantee
Periods you select. We currently offer Guarantee Periods with durations of 1, 2,
3, 4, 5, 7, and 10 years. If any amount allocated or transferred remains in a
Guarantee Period until the Expiration Date, its value will be equal to the
amount originally allocated or transferred, multiplied, on an annually
compounded basis, by its Guaranteed Interest Rate. Any surrender, withdrawal,
transfer, or amount applied to an income plan from a Fixed Sub-Account before
its Expiration Date ordinarily will be subject to a Market Value Adjustment that
may increase or decrease the value of the Fixed Sub-Account (or portion thereof)
being surrendered, withdrawn, transferred, or applied to an income plan. See
"Market Value Adjustment" page _____.

       You can transfer Account Value from one Variable Sub-Account to another,
and from a Fixed Sub-Account to a Variable Sub-Account and from a Variable
Sub-Account to a Fixed Sub-Account, subject to certain conditions. See
"Transfers," page __.

       Sage Life may offer other variable annuity contracts that also invest in
the same Funds offered under the Contracts. These contracts may have different
charges and they may offer different benefits.

2.     WHAT ARE MY INCOME PAYMENT OPTIONS?

       You choose the Income Date or other agreed upon date when you want
regular income payments to begin. The Income Date you choose must be on or
before the first calendar month following the Annuitant's 95th birthday. We
reserve the right to require that your Income Date be at least two years after
the Contract Date. After you choose the Income Date, you select an income plan
from the list below, and indicate whether you want your income payments to be
fixed or variable or a combination of fixed and variable. You must give
Satisfactory Notice of your choices at least 30 days prior to the Income Date,
and you must have at least $5,000 of Account Value to apply to a variable or
fixed income option.

       On the Income Date, the Account Value under the Contract (adjusted for
any Market Value Adjustment, if applicable) will be used to provide income
payments. Unless you request otherwise, we


                                       12
<PAGE>   34
will use any Variable Account Value to provide variable income payments, and we
will use any Fixed Account Value to provide fixed income payments. If you have
not chosen an income plan by the Income Date, a "life annuity with 10 years
certain" (described below) will be used.

       The available income plans are:

              - INCOME PLAN 1 - LIFE ANNUITY. An amount payable during the
              lifetime of the Annuitant terminating with the last payment
              preceding the death of the Annuitant.

              - INCOME PLAN 2 - LIFE ANNUITY WITH 10 OR 20 YEARS CERTAIN. An
              amount payable during the lifetime of the Annuitant with the
              guarantee that payments be made for a minimum of 10 or 20 years,
              as elected.

              - INCOME PLAN 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY. An amount
              payable during the joint lifetime of the Annuitant and a
              designated second person, and thereafter during the remaining
              lifetime of the survivor, ceasing with the last payment prior to
              the death of the survivor.

              - INCOME PLAN 4 - PAYMENTS FOR A SPECIFIED PERIOD CERTAIN. An
              amount payable for the number of years selected which may be from
              5 to 30 years.

              - INCOME PLAN 5 - ANNUITY PLAN. An amount can be used to purchase
              any other income plan we offer on the Income Date for which you
              and the Annuitant are eligible.

       Your first income payment, whether fixed or variable, will be based on
the amount of proceeds applied under the income plan you have selected and on
the "annuity purchase rates" based on the Annuitant's age and sex, and if
applicable upon the age and sex of a second designated person. The annuity
purchase rate we apply will never be lower than the rate shown in your Contract.

       If you have told us you want fixed income payments, the amount of each
income payment is guaranteed and remains level throughout the period you
selected.

        If you told us you want variable income payments, the amount of each
payment will vary according to the investment performance of the Funds you
selected. 

   
        To calculate your initial and future variable income payments, we need
to make an assumption regarding the investment performance of the Funds you
select. We call this your assumed investment rate. This rate is simply the total
return, after expenses, you need to earn to keep your variable income payments
level. Rather than building in our own estimate, we allow you to tailor your
variable income payments to meet your needs by giving you a choice of rates.
You currently may select either 3% or 6%; if you do not select a rate, we will
apply the 3% rate. (We may offer other rates in the future). The lower the
rate, the lower your initial variable income payment, but the better your
payments will keep pace with inflation (assuming positive investment
performance). Conversely, the higher the rate, the higher your initial variable
payment, but the less likely your payments will keep pace with inflation
(assuming positive investment performance).
    

   
        For example, if you select 3%, this means that if the investment
performance, after expenses, of your Funds is less than 3%, then the dollar
amount of your variable income payment will decrease. On the other hand, if the
investment performance, after expenses, of your Funds is greater than 3%, then
the dollar amount of your income payments will increase.
    
        

                                       13
<PAGE>   35
   
       Conversely, if you select 6%, this means that if the investment
performance, after expenses, of your Funds is less than 6%, then the dollar
amount of your variable income payment will decrease; but, if the investment
performance, after expenses, of your Funds is greater than 6%, then the dollar
amount of your income payments will increase.
    

       If you told us that you want a life annuity, it is possible that you
could only receive one payment.

       Your income payments will be made monthly, unless you choose quarterly,
semi-annual or annual payments by giving us Satisfactory Notice at least 30 days
prior to the Income Date. Payments start on the Income Date. If any payment
would be less than $100, we may change the payment frequency to the next longer
interval, but in no event less frequent than annual. Also, if on the Income
Date, the Account Value is less than $5,000, we may pay the Surrender Value on
that date in one sum.

3.     HOW DO I PURCHASE A CONTRACT?

       INITIAL PURCHASE PAYMENT. Contracts may be purchased for use in
connection with tax-qualified plans ("Qualified Contracts"), or may be purchased
on a non-tax qualified basis ("Non-Qualified Contracts"). To purchase a
Contract, you and the Annuitant you selected may not be more than 85 years old
on the Contract Date. A minimum initial purchase payment of $25,000 is required.

       ISSUANCE OF A CONTRACT. Once we receive your initial purchase payment and
your application at our Customer Service Center, we will usually issue your
Contract within two Business Days. However, if you did not give us all the
information we need, we will try to contact you to get the additional needed
information. If we cannot complete the application within five Business Days, we
will either send your money back or obtain your permission to keep your money
until we receive the necessary information. Your Contract Date will be the date
we issue your Contract at our Customer Service Center.

       FREE LOOK RIGHT TO CANCEL CONTRACT. During your "Free Look" Period, you
may cancel your Contract. The Free Look Period usually expires 10 days after you
receive your Contract. Some states may require a longer period. If you decide to
cancel your Contract, you must return it to our Customer Service Center or to
one of our authorized registered representatives. You will receive a refund of
your Account Value plus any charges we have deducted on or before the date we
receive your returned Contract at our Customer Service Center, or if required by
the law

                                       14
<PAGE>   36
of your state, your initial purchase payment (less any withdrawals previously
taken). In those latter states where this requirement exists, amounts you
allocate to the Variable Account will be temporarily allocated to the Money
Market Fund until the Free Look Period expires. See "What are my Investment
Options," page ___.

       MAKING ADDITIONAL PURCHASE PAYMENTS. You may make additional purchase
payments of $1,000 or more at any time before the Income Date, subject to the
following conditions. We will accept additional purchase payments under a
Non-Qualified Contract until the earlier of the year in which you attain age 85
or the year in which the Annuitant attains age 85. We will accept additional
purchase payments under a Qualified Contract until the year in which you attain
70 1/2, except contributions to a Roth IRA or rollover contributions may be made
until the year in which you attain age 85. You must obtain our prior approval
before you make a purchase payment that causes the Account Value of all
annuities that you maintain with us to exceed $1,000,000. We will credit any
purchase payment received after the Contract Date to your Contract as of the
Business Day on which we receive it at our Customer Service Center. Purchase
payments received on other than a Business Day will be deemed received on the
next following Business Day.

       In addition, if you have not made a purchase payment for more than two
years and your Account Value is less than $2,000 on a Contract Anniversary, we
may cancel your Contract and pay you the Surrender Value as though you had
surrendered by giving you written notice at your address of record. However, you
will be allowed 61 days from the date of that notice to submit an additional
purchase payment in an amount sufficient to maintain your Account Value at
$2,000 or more. If we have not received the required additional purchase payment
by the end of this period, we may cancel your Contract.

4.     WHAT ARE MY INVESTMENT OPTIONS?

       PURCHASE PAYMENT ALLOCATIONS. When you apply for a Contract, you specify
the percentage of your purchase payment to be allocated to each Variable
Sub-Account and/or to each Fixed Sub-Account. You can change the allocation
percentages at any time by sending Satisfactory Notice to our Customer Service
Center. The change will apply to all purchase payments we receive on or after
the date we receive your request. Purchase payment allocations must be in
percentages totaling 100%, and each allocation percentage must be a whole
number.

       We may, however, require that an initial purchase payment allocated to a
Variable Sub-Account be temporarily invested in the Money Market Fund during the
Free Look Period. We will require this if the law of your state requires us to
refund your full initial purchase payment less any withdrawals previously taken,
should you cancel your Contract during the Free Look Period. At the end of the
Free Look Period, if your initial purchase payment was temporarily allocated to
the Money Market Fund by us, we will transfer the value of what is in the Money
Market Fund to the Variable Sub-Account(s) you specified in your application.
Solely for the


                                       15
<PAGE>   37
purpose of processing transfers from the Money Market Fund, we will deem the
Free Look Period to end 15 days after the Contract Date. This transfer from the
Money Market Fund to the Variable Sub-Accounts upon the expiration of the Free
Look Period does not count as a transfer for any other purposes under the
Contract.

       VARIABLE SUB-ACCOUNT INVESTMENT OPTIONS. The Variable Account has 33
Sub-Accounts, each investing in a specific Fund. Each of the Funds is either an
open-end diversified management investment company or a separate investment
portfolio of such a company, and is managed by a registered investment adviser.
The Funds, as well as brief descriptions of their investment objectives, are
provided below. There is no assurance that these objectives will be met.

                       AIM VARIABLE INSURANCE FUNDS, INC.

       AIM V.I. GOVERNMENT SECURITIES FUND. This Fund seeks to achieve a high
level of current income consistent with reasonable concern for safety of
principal by investing in debt securities issued, guaranteed, or otherwise
backed by the U.S. Government.

       AIM V.I. GROWTH AND INCOME FUND. This Fund seeks to provide growth of
capital, with current income as a secondary objective. The Fund seeks to achieve
its objective by generally investing at least 65% of its net assets in stocks of
companies believed by the management to have the potential for above average
growth in revenues and earnings.

       AIM V.I. INTERNATIONAL EQUITY FUND. This Fund seeks to provide long-term
growth of capital by investing in a diversified portfolio of international
equity securities, the issuers of which are considered by the Fund's investment
advisor to have strong earnings momentum.

       AIM V.I. VALUE FUND. This Fund seeks to achieve long-term growth of
capital by investing primarily in equity securities judged by the Fund's
investment advisor to be undervalued relative to the current or projected
earnings of the companies issuing the securities, or relative to current market
values of assets owned by the companies issuing the securities or relative to
the equity market generally. Income is a secondary objective.

       A I M Advisors, Inc. advises the AIM Variable Insurance Funds, Inc.

                             THE ALGER AMERICAN FUND

       ALGER AMERICAN MIDCAP GROWTH PORTFOLIO. This Fund seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of equity
securities, primarily of companies with total market capitalization within the
range included in the S&P MidCap 400 Index.

                                       16
<PAGE>   38
       ALGER AMERICAN INCOME AND GROWTH PORTFOLIO. This Fund seeks to provide a
high level of dividend income through investments in equity securities. Capital
appreciation is a secondary objective of this Fund.

       ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO. This Fund seeks long-term
capital appreciation through investment primarily in equity securities that, at
the time of purchase, have total market capitalization within the range of
companies included in the Russell 2000 Growth Index or the S&P SmallCap 600
Index.

       Fred Alger Management, Inc. advises The Alger American Fund.

                        LIBERTY VARIABLE INVESTMENT TRUST

       COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES ("High Yield
Securities Fund"). This Fund seeks high current income and total return by
investing primarily in lower rated corporate debt securities (commonly referred
to as "junk bonds").

       COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES ("Small Cap Value Fund").
This Fund seeks long-term growth by investing primarily in smaller
capitalization equity securities.

       COLONIAL STRATEGIC INCOME FUND, VARIABLE SERIES ("Strategic Income
Fund"). This Fund seeks a high level of current income, as is consistent with
prudent risk and maximizing total return, by diversifying investments primarily
in U.S. and foreign government and lower rated corporate debt securities.

       COLONIAL U.S. STOCK FUND, VARIABLE SERIES ("U.S. Stock Fund"). This Fund
seeks long-term growth by investing primarily in large capitalization equity
securities.

       LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES ("All-Star Fund"). This
Fund seeks total investment return, comprised of long-term capital appreciation
and current income, through investment primarily in a diversified portfolio of
equity securities.

       NEWPORT TIGER FUND, VARIABLE SERIES ("Tiger Fund"). This Fund seeks
long-term capital growth by investing primarily in equity securities of
companies located in the nine Tigers of Asia (Hong Kong, Singapore, South Korea,
Taiwan, Malaysia, Thailand, Indonesia, China and the Philippines).


       STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES ("Global Utilities
Fund"). This Fund seeks current income and long-term growth of capital. The
Global Utilities Fund normally invests at least 65% of its total assets in U.S.
and foreign equity and debt securities of companies engaged in the manufacture,
production, generation, transmission, sale or distribution of electricity,
natural gas or other types of energy, or water or other sanitary services, and


                                       17
<PAGE>   39
companies engaged in telecommunication, including telephone, telegraph,
satellite, microwave and other communications media.

       Liberty Advisory Services Corp. (formerly "Keyport Advisory Services
Corp.") provides investment management and advisory services to the Liberty
Variable Investment Trust. Colonial Management Associates, Inc. subadvises the
High Yield Securities Fund, the U.S. Stock Fund, the Small Cap Value Fund, and
the Strategic Income Fund. Stein Roe & Farnham Incorporated subadvises the
Global Utility Fund. Newport Fund Management, Inc. subadvises the Tiger Fund.
Liberty Asset Management Company subadvises the All-Star Fund.

                       STEINROE VARIABLE INVESTMENT TRUST

       STEIN ROE GROWTH STOCK FUND. This Fund seeks long-term growth of capital
through investments primarily in common stocks.

       STEIN ROE BALANCED FUND. This Fund seeks high total investment return
through a changing mix of equities, debt securities, and cash.

       Stein Roe & Farnham Incorporated advises the SteinRoe Variable Investment
Trust.

                        MFS(R) VARIABLE INSURANCE TRUST(SM)

       MFS GROWTH WITH INCOME SERIES. This Fund seeks to provide reasonable
current income and long-term growth of capital and income. Under normal market
conditions, the MFS Growth with Income Series will invest at least 65% of its
assets in equity securities of companies that are believed to have long-term
prospects for growth and income.

       MFS HIGH INCOME SERIES. This Fund seeks high current income by investing
primarily in a professionally managed diversified portfolio of fixed income
securities, some of which may involve equity features. Fixed income securities
offering the high current income sought by the High Income Series normally
include those fixed income securities which offer a current yield above that
generally available on debt securities in the three highest rating categories by
recognized rating agencies (commonly known as "junk bonds" if rated below the
four highest categories of recognized rating agencies). See the prospectus for
the Trust for more information.

       MFS RESEARCH SERIES. This Fund seeks to provide long-term growth of
capital and future income. The MFS Research Series' policy is to invest a
substantial proportion of its assets in equity securities of companies believed
to possess better than average prospects for long-term growth.

       MFS TOTAL RETURN SERIES. This Fund seeks primarily to provide
above-average income (compared to a portfolio invested entirely in equity
securities) consistent with the prudent

                                       18
<PAGE>   40
employment of capital, and secondarily to provide a reasonable opportunity for
growth of capital and income.

       MFS VALUE SERIES. This Fund seeks capital appreciation. Dividend income,
if any, is a consideration incidental to the Fund's objective of capital
appreciation.

       MFS Investment Management(R) advises the MFS(R) Variable Insurance
Trust.(SM)

                      MORGAN STANLEY UNIVERSAL FUNDS, INC.

       GLOBAL EQUITY PORTFOLIO. This Fund seeks long-term capital appreciation
by investing primarily in equity securities of issuers throughout the world,
including U.S. issuers, using an approach that is oriented to the selection of
individual stocks that the Fund's investment adviser believes are undervalued.

       MID CAP VALUE PORTFOLIO. This Fund seeks above-average total return over
a market cycle of three to five years by investing in common stocks and other
equity securities of issuers with equity capitalizations in the range of
companies represented in the S&P MidCap 400 Index.

       VALUE PORTFOLIO. This Fund seeks above-average return over a market cycle
of three to five years by investing primarily in a diversified portfolio of
common stocks and other equity securities that are deemed by the Fund's
investment adviser to be relatively undervalued based on various measures such
as price/earnings ratios and price/book ratios.

       Morgan Stanley Asset Management advises the Global Equity Portfolio.
Miller Anderson & Sherrerd, LLP advises the Value Portfolio and the Mid Cap
Value Portfolio.

                       OPPENHEIMER VARIABLE ACCOUNT FUNDS

       OPPENHEIMER BOND FUND. This Fund seeks a high level of current income.
Secondarily, this Fund seeks capital growth when consistent with its primary
objective. The Fund will, under normal market conditions, invest at least 65% of
its total assets in investment grade debt securities.

       OPPENHEIMER GROWTH FUND. This Fund seeks to achieve capital appreciation
by investing in securities of well-known, established companies.

       OPPENHEIMER SMALL CAP GROWTH FUND. This Fund seeks capital appreciation.
Current income is not an objective. In seeking its investment objective, the
Fund emphasizes investments in securities of "growth type" companies with market
capitalizations of less than $1 billion, including common stocks, preferred
stocks, convertible securities, rights, warrants and options, in proportions
which may vary from time to time.


                                      19
<PAGE>   41
         Oppenheimer Funds, Inc. manages Oppenheimer Variable Account Funds.

                           SAGE LIFE INVESTMENT TRUST

         EAFE EQUITY INDEX FUND.  This Fund seeks to replicate as closely as
possible the performance of the Morgan Stanley Capital International Europe,
Australasia, Far East Index before the deduction of Fund expenses.

         S&P 500 EQUITY INDEX FUND.  This Fund seeks to replicate as closely as
possible the performance of the S&P 500 Composite Stock Price Index before the
deduction of Fund expenses.

         MONEY MARKET FUND.  This Fund seeks to provide high current income
consistent with the preservation of capital and liquidity.  Although the Fund
seeks to maintain a constant net asset value of $1.00 per share, there can be
no assurance that the Fund can do so on a continuous basis.  An investment in
the Money Market Fund is not guaranteed.

         Sage Advisors, Inc. is the investment manager to the Sage Life
Investment Trust.  State Street Global Advisors subadvises the EAFE Equity
Index Fund and S&P 500 Equity Index Fund. Conning Asset Management Company
subadvises the Money Market Fund.

                       T. ROWE PRICE EQUITY SERIES, INC.

         T. ROWE PRICE EQUITY INCOME PORTFOLIO.  This Fund seeks to provide
substantial dividend income and also long-term capital appreciation.

         T. ROWE PRICE MID-CAP GROWTH PORTFOLIO.  This Fund seeks to provide
long-term capital appreciation by investing primarily in common stocks of
medium-sized (mid-cap) growth companies.

         T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO.  The Fund seeks to
provide the highest total return over time consistent with an emphasis on both
capital appreciation and income.  The Personal Strategy Balanced Portfolio
invests in a diversified portfolio of stocks, bonds, and money market
securities.

         T. Rowe Price Associates, Inc. provides investment management to the
T. Rowe Price Equity Series, Inc.

         The investment objectives and policies of certain Funds may be similar
to the investment objectives and policies of other retail mutual funds which
can be purchased outside of a variable insurance product, and that are managed
by the same investment adviser or manager.  The investment results of the
Funds, however, may be higher or lower than the results of such other






                                     20
<PAGE>   42
retail mutual funds.  There can be no assurance, and no representation is made,
that the investment results of any of the Funds will be comparable to the
investment results of any other retail mutual fund, even if the other retail
mutual fund has the same investment adviser or manager.

         Shares of the Funds may be sold to separate accounts of insurance
companies that are not affiliated with us or each other, a practice known as
"shared funding."  They also may be sold to separate accounts to serve as the
underlying investment for both variable annuity contracts and variable life
insurance contracts, a practice known as "mixed funding."  As a result, there
is a possibility that a material conflict may arise between the interests of
Owners whose Account Values are allocated to the Variable Account, and owners
of other contracts whose contract values are allocated to one or more other
separate accounts investing in any of the Funds.  Shares of some of the Funds
may also be sold directly to certain qualified pension and retirement plans
qualifying under Section 401 of the Code.  As a result, there is a possibility
that a material conflict may arise between the interest of Owners or owners of
other contracts (including contracts issued by other companies), and such
retirement plans or participants in such retirement plans. In the event of any
such material conflicts, we will consider what action may be appropriate,
including removing a Fund from the Variable Account or replacing the Fund with
another Fund.  There are certain risks associated with mixed and shared funding
and with the sale of shares to qualified pension and retirement plans, as
disclosed in each Trust's prospectus.

         We have entered into agreements with either the investment adviser or
distributor for each of the Funds pursuant to which the adviser or distributor
pays us a fee ordinarily based upon an annual percentage of the average
aggregate net amount we have invested on behalf of the Variable Account and
other separate accounts.  These percentages differ, and some investment
advisers or distributors pay us a greater percentage than other advisers or
distributors.  These agreements reflect administrative services we provide.

         More detailed information concerning the investment objectives,
policies, and restrictions of the Funds, the expenses of the Funds, the risks
attendant to investing in the Funds and other aspects of their operations can
be found in the current prospectus for each Trust which accompanies this
Prospectus.  The Trusts' prospectuses should be read carefully before any
decision is made concerning the allocation of amounts to the Variable
Sub-Accounts.

         FIXED ACCOUNT INVESTMENT OPTIONS.  Each time you allocate purchase
payments or transfer funds to the Fixed Account, we establish a Fixed
Sub-Account.  Each Fixed Sub-Account is guaranteed an interest rate (the
"Guaranteed Interest Rate") for a period of time (a "Guarantee Period").  A
Guaranteed Interest Rate is established on the date that an allocation is made
to the Fixed Sub-Account.

         We have no specific formula for establishing the Guaranteed Interest
Rates for the different Guarantee Periods.  The determination made will be
influenced by, but not necessarily





                                       21
<PAGE>   43
correspond to, interest rates available on fixed income investments that we may
acquire with the amounts we receive as purchase payments or transfers of
Account Value under the Contracts.  These amounts will be invested primarily in
investment-grade fixed income securities including: securities issued by the
U.S. Government or its agencies or instrumentalities, which issues may or may
not be guaranteed by the U.S. Government; debt securities that have an
investment grade, at the time of purchase, within the four highest grades
assigned by Moody's Investor Services, Inc., Standard & Poor's Corporation, or
any other nationally recognized rating service; mortgage-backed securities
collateralized by real estate mortgage loans, or securities collateralized by
other assets, that are insured or guaranteed by the Federal Home Loan Mortgage
Association, the Federal National Mortgage Association, or the Government
National Mortgage Association, or that have an investment grade at the time of
purchase within the four highest grades described above; other debt
instruments; commercial paper; cash or cash equivalents.  You will have no
direct or indirect interest in these investments, and you do not share in the
investment performance of the assets of the Fixed Account.  We will also
consider other factors in determining the Guaranteed Interest Rates, including
regulatory and tax requirements, sales commissions, administrative expenses
borne by us, general economic trends, and competitive factors.  THE COMPANY'S
MANAGEMENT WILL MAKE THE FINAL DETERMINATION OF THE GUARANTEED INTEREST RATES
IT DECLARES.  WE CANNOT PREDICT OR GUARANTEE THE LEVEL OF FUTURE INTEREST
RATES.  HOWEVER, OUR GUARANTEED INTEREST RATES WILL BE AT LEAST 3% PER YEAR.
GUARANTEED INTEREST RATES DO NOT DEPEND UPON AND DO NOT REFLECT THE PERFORMANCE
OF THE FIXED ACCOUNT.

         We measure the length of a Guarantee Period from the end of the
calendar month in which you allocated or transferred the amount to the Fixed
Sub-Account.  This means that the Expiration Date of any Guarantee Period will
always be the last day of a calendar month.  The currently available Guarantee
Periods are 1, 2, 3, 4, 5, 7, and 10 years.  We may offer different Guarantee
Periods in the future.  Not all Guarantee Periods may be available in all
states.  Any Guarantee Period you select cannot be longer than the number of
full years remaining until your Income Date.

         We will notify you at least thirty days prior to an Expiration Date of
a Fixed Sub-Account in which you are invested of your options for renewal.
Your options are:

                 1.       Take no action and we will transfer the value of the
                 expiring Fixed Sub-Account to the Fixed Sub-Account with the
                 same Guarantee Period, but not longer than five years or
                 extending beyond the Income Date, as of day the previous Fixed
                 Sub-Account expires.  If such Guarantee Period is not
                 currently available, your value will be transferred to the
                 next shortest Guarantee Period.  If there is no shorter
                 Guarantee Period, we will transfer your value to the Money
                 Market option.

                 2.       Elect a new Guarantee Period(s) from among those
                 offered by us as of the day the previous Fixed Sub-Account
                 expires.





                                       22
<PAGE>   44

                 3.       Elect to transfer the value of the Fixed Sub-Account
                 to one or more Variable Sub-Accounts.

         Any amounts surrendered, withdrawn, transferred or applied to an
income plan other than during the thirty days before the Expiration Date of the
Guarantee Period are subject to a Market Value Adjustment with the exception of
the following transactions:

         -       Transfers from specially designated Fixed Sub-Accounts made
                 automatically under our Dollar Cost Averaging Program, and

         -       Withdrawals of interest earned made automatically under our
                 Systematic Partial Withdrawal Program.

         In addition, we currently waive any Market Value Adjustment on
withdrawals taken to satisfy IRS minimum distribution requirements in relation
to your Contract.

         MARKET VALUE ADJUSTMENT.  A Market Value Adjustment reflects the
change in interest rates since a Fixed Sub-Account was established.  It
compares: (1) the current Index Rate for a period equal to the time remaining
in the Guarantee Period, and (2) the Index Rate at the time we established the
Fixed Sub-Account for a period equal to the Guarantee Period.

         Ordinarily, if the current Index Rate for a period equal to the time
remaining in the Guarantee Period is higher than the applicable Index Rate at
the time the Fixed Sub-Account was established, the Market Value Adjustment
will be negative.  Similarly, if the current Index Rate for a period equal to
the time remaining in the Guarantee Period is lower than the applicable Index
Rate at the time the Fixed Sub-Account was established, the Market Value
Adjustment will be positive.

         We will apply a Market Value Adjustment as follows:

         For a surrender, withdrawal, transfer, or amount applied to an income
plan, the Market Value Adjustment will be calculated on the total amount that
must be surrendered, withdrawn, transferred or applied to an income plan to
provide the amount requested.

         -       If the Market Value Adjustment is negative, it reduces any
                 remaining value in the Fixed Sub-Account, or amount of
                 Surrender Value.  Any remaining MarketValue Adjustment then
                 reduces the amount withdrawn, transferred, or applied to an
                 income plan.

         -       If the Market Value Adjustment is positive, it increases any
                 remaining value in the Fixed Sub-Account.  In the case of
                 surrender, or if the full amount of the Fixed Sub-Account is
                 withdrawn, transferred or applied to an income plan, the





                                       23
<PAGE>   45
                 Market Value Adjustment increases the amount surrendered,
                 withdrawn, transferred, or applied to an income plan.

We will compute the Market Value Adjustment by multiplying the factor below by
the total amount that must be surrendered, withdrawn, transferred, or applied
to an income plan from the Fixed Sub-Account in order to provide the amount you
requested.

                                             N/365
                          [(1+I)/(1+J+.0025)]      - 1

Where
                 I is the Index Rate for a maturity equal to the Fixed
                 Sub-Account's Guarantee Period at the time we established the
                 Sub-Account;

                 J is the Index Rate for a maturity equal to the time remaining
                 (rounded up to the next full year) in the Fixed Sub-Account's
                 Guarantee Period at the time of calculation; and

                 N is the remaining number of days in the Guarantee Period at
                 the time of calculation.

We currently base the Index Rate for a calendar week on the reported rate for
the preceding calendar week.  We reserve the right to set it less frequently
than weekly but in no event less often than monthly.  If there is no Index Rate
for the maturity needed to calculate I or J, straight-line interpolation
between the Index Rate for the next highest and next lowest maturities will be
used to determine that Index Rate.  If the maturity is one year or less, we
will use the Index Rate for a one-year maturity.

         In the states of Maryland and Washington, state insurance law requires
that the Market Value Adjustment be computed by multiplying the amount being
surrendered, withdrawn, transferred, or applied to an income plan, by the
greater of the factor above and the following factor: [(1.03)/(1+K)]((G-N)/365))
- - 1, where N is as defined above, K equals the Guarantee Interest Rate for the
Guarantee Period, and G equals the initial number of days in the Guarantee
Period.

         Examples of how the Market Value Adjustment works are shown in
Appendix A.

         TRANSFERS.  Prior to the Income Date and while the Annuitant is
living, you may transfer Account Value from and among the Variable and Fixed
Sub-Accounts at any time.  However, in certain states, you may not transfer
Account Value until after the end of the Free Look Period.  See "What are my
Investment Options?," page __.  The minimum amount of Account Value that may
be transferred from a Variable Sub-Account or a Fixed Sub-Account is $250, or,
if less, the entire remaining Account Value held in that Sub-Account.  You must
give us Satisfactory Notice of the Variable Sub-Accounts and/or Fixed
Sub-Accounts from which and to which transfers are





                                       24
<PAGE>   46

to be made.  Otherwise, we will not transfer your Account Value.  A transfer
from a Fixed Sub-Account ordinarily will be subject to a Market Value
Adjustment.  There is currently no limit on the number of transfers from and
among the Variable or Fixed Sub-Accounts.

         A transfer ordinarily will take effect on the Business Day
Satisfactory Notice is received at our Customer Service Center.  Requests
received on other than a Business Day will be deemed received on the next
following Business Day.  We may, however, defer transfers to, from, and among
the Variable Sub-Accounts under the same conditions that we may delay paying
proceeds.

         We reserve the right to impose a transfer charge of up to $25 on each
transfer in a Contract Year in excess of twelve, and to limit, upon notice, the
maximum number of transfers you may make per calendar month or per Contract
Year.  For purposes of assessing any transfer charge, each transfer request
will be considered one transfer, regardless of the number of Variable or Fixed
Sub-Accounts affected by the transfer.

         After the Income Date, you must have our prior consent to transfer
value from the Fixed Account to the Variable Account or from the Variable
Account to the Fixed Account.  A Market Value Adjustment ordinarily will apply
to transfers from the Fixed Account.  We reserve the right to limit the number
of transfers among the Variable Sub-Accounts to one transfer per Contract Year
after the Income Date.

         TELEPHONE TRANSACTIONS.  You may request transfers or withdrawals by
telephone.  We will not be liable for following instructions communicated by
telephone that we reasonably believe to be genuine.  To request transfers or
withdrawals by telephone, you must elect the option on our authorization form.
We will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine and may only be liable for any losses due to
unauthorized or fraudulent instructions where we fail to follow our procedures
properly.  Such procedures include the following:  (a) upon telephoning a
request, you or your authorized representative will be asked to provide certain
identifying information, (b) all such conversations will be tape recorded, and
(c) all such telephone transactions will be followed by a confirmation
statement of the transaction.

         Our telephone transaction authorization form may also allow you to
create a power of attorney by authorizing another person to give telephone
instructions.  Unless prohibited by state law, such power will be treated as a
durable power of attorney, and shall not be affected by subsequent incapacity,
disability, or incompetency of the Owner.  We may cease to honor the power by
sending written notice to you at your last known address.  Neither we nor any
person acting on our behalf shall be subject to liability for any act executed
in good faith reliance upon your power of attorney.





                                       25
<PAGE>   47
         POWER OF ATTORNEY.  As a general rule and as a convenience to you, we
allow the use of powers of attorney whereby you can give a third party the
right to make transfers on your behalf.  However, when the same third party
possesses powers of attorney executed by many Owners, the result can be
simultaneous transfers involving large amounts of Account Value.  Such
transfers can disrupt the orderly management of the Funds, can result in higher
costs to Owners, and are ordinarily not compatible with the long-range goals of
purchasers of the Contracts.  We believe that such simultaneous transfers made
by such third parties are not in the best interest of all shareholders of the
Funds, and this position is shared by the managements of the Funds.

         Therefore, to the extent necessary to reduce the adverse effects of
simultaneous transfers made by third parties holding multiple powers of
attorney, we may not honor such powers of attorney and have instituted or will
institute procedures to assure that the transfer requests that we receive have,
in fact, been made by the Owners in whose names they are submitted.  However,
these procedures will not prevent Owners from making their own transfer
requests.

         DOLLAR-COST AVERAGING PROGRAM.  Our optional dollar-cost averaging
program permits you to systematically transfer on a monthly basis, or as
frequently as we allow, a set dollar amount from the Money Market Sub-Account
to any combination of Variable Sub-Accounts.  We also allow dollar-cost
averaging from specially designated Fixed Sub-Accounts ("DCA Fixed
Sub-Accounts").  These DCA Fixed Sub-Accounts may have different Guarantee
Periods and different Guaranteed Interest Rates than the Fixed Sub-Accounts.
Please consult your registered representative about the DCA Fixed Sub-Accounts.

         The dollar-cost averaging method of investment is designed to reduce
the risk of making purchases only when the price of Accumulation Units is high.
However, you should carefully consider your financial ability to continue the
program over a long enough period of time to purchase units when their value is
low as well as when high.  Dollar-cost averaging does not assure a profit or
protect against a loss.  Due to the effect of interest that continues to be
earned on the balance in the Money Market Fund or a DCA Fixed Sub-Account, the
amounts that are actually transferred will vary slightly from month to month.
An example of how our dollar-cost averaging program works is shown in Appendix
B.

         You may elect to participate in the dollar-cost averaging program at
any time before the Income Date by sending us Satisfactory Notice.  The minimum
transfer amount is $250 from the Money Market Sub-Account or from a DCA Fixed
Sub-Account.  All dollar-cost averaging transfers will be made on the day of
each month that corresponds to your Contract Date unless that date is not a
Business Day.  Otherwise, the transfer will be made on the next following
Business Day.  If you want to dollar-cost average from more than one DCA Fixed
Sub-Account at the same time, certain restrictions may apply.





                                       26
<PAGE>   48
         Once elected, dollar-cost averaging remains in effect from the date we
receive your request until the Income Date, until the Contract is surrendered,
until the value of the Sub-Account from which transfers are being made is
depleted, or until you cancel the program by written request.  If you request
to cancel dollar-cost averaging from a DCA Fixed Sub-Account before the end of
the selected period, we reserve the right to treat this request as a transfer
request, and a Market Value Adjustment ordinarily will be assessed on the
amount canceled.  You can request changes by writing us at our Customer Service
Center.  There is no additional charge for dollar-cost averaging.  A transfer
under this program is not considered a transfer for purposes of assessing a
transfer charge.  We reserve the right to discontinue offering this program at
any time and for any reason.  Dollar-cost averaging is not available while you
are participating in the systematic withdrawal program.

         ASSET ALLOCATION PROGRAM.  You may select from six asset allocation
model portfolios, or you may use these models as a guide to help you develop
your own asset allocation model.  The models are as follows:

<TABLE>
<CAPTION>
         Model                             Investment and Risk Profile
         -----                             ---------------------------
           <S>                             <C>
           I                               Stable Capital
           II                              Stable Income
           III                             Moderate Income
           IV                              Moderate Growth
           V                               Capital Growth
           VI                              Aggressive Growth
</TABLE>

If you elect to participate in the asset allocation program, all initial and
additional purchase payments will automatically be allocated among the Variable
Sub-Accounts indicated by the model you select.  The models do not include
allocations to the Fixed Account.  Although you may only use one model at a
time, you may elect to change your selection as your tolerance for risk, and/or
your needs and objectives change.  Bear in mind, the use of an asset allocation
model does not guarantee investment results.  You may use a questionnaire that
is offered to determine the model that best meets your risk tolerance and time
horizons.

         Because each Variable Sub-Account performs differently over time, your
portfolio mix may vary from its initial allocations.  We will automatically
rebalance your Fund mix quarterly to bring your portfolio back to its original
allocation percentages.

         From time to time the models are reviewed.  It  may be found that
allocation percentages among the Variable Sub-Accounts or even some of the
Variable Sub-Accounts within a particular model need to be changed.  You will
be sent notice at least 30 days before any such change is made, and you will be
given an opportunity NOT to make the change.





                                       27
<PAGE>   49
         If you participate in the asset allocation program, the transfers made
under the program are not taken into account in determining any transfer
charge.  There is no additional charge for this program.  We reserve the right
to discontinue offering this program at any time and for any reason.

         AUTOMATIC PORTFOLIO REBALANCING PROGRAM.  Once your money has been
allocated among the Variable Sub-Accounts, the investment performance of each
Variable Sub-Account may cause your allocation to shift.  Prior to the Income
Date, you may instruct us to automatically rebalance (on a calendar quarter,
semi-annual, or annual basis) Variable Account Value to return to your original
allocation percentages.  Your request will be effective on the Business Day on
which we receive your request at our Customer Service Center.  Requests
received on other than a Business Day will be deemed received on the next
following Business Day.  Your allocation percentages must be in whole
percentages.  You may start and stop automatic portfolio rebalancing at any
time and make changes to your allocation percentages by written request.  There
is no additional charge for using this program.  A transfer under this program
is not considered a transfer for purposes of assessing any transfer charge.  We
reserve the right to discontinue offering this program at any time and for any
reason.  Any money allocated to the Fixed Account will not be included in the
rebalancing.

         ACCOUNT VALUE.  The Account Value is the entire amount we hold under
your Contract for you.  The Account Value serves as a starting point for
calculating certain values under your Contract.  It equals the sum of your
Variable Account Value and your Fixed Account Value.  We determine your Account
Value first on the Contract Date and thereafter on each Business Day.  The
Account Value will vary to reflect:  (i) the performance of the Variable
Sub-Accounts you have selected, (ii) interest credited on amounts allocated to
the Fixed Account, and (iii) charges, transfers, withdrawals, and surrenders.
Account Value may be more or less than purchase payments paid.

         SURRENDER VALUE.  The Surrender Value on a Business Day before the
Income Date, is the Account Value, adjusted for any applicable Market Value
Adjustment that may be positive or negative, less any applicable annual
administration charge, and less any applicable Purchase Payment Tax Charge.

         VARIABLE ACCOUNT VALUE.  On any Business Day, the Variable Account
Value equals the sum of the values in each Variable Sub-Account.  The value in
each Variable Sub-Account equals the number of Accumulation Units attributable
to that Variable Sub-Account multiplied by the Accumulation Unit value for that
Variable Sub-Account on that Business Day.  When you allocate a purchase
payment or transfer Account Value to a Variable Sub-Account, we credit your
Contract with Accumulation Units in that Variable Sub-Account.  We determine
the number of Accumulation Units by dividing the dollar amount allocated or
transferred to the Variable Sub-Account by the Sub-Account's Accumulation Unit
value for that Business Day.  Similarly, when you transfer, withdraw, or
surrender an amount from a Variable Sub-Account, we cancel





                                       28
<PAGE>   50
Accumulation Units in that Variable Sub-Account.  We determine the number of
Accumulation Units canceled by dividing the dollar amount you transferred,
withdrew, or surrendered by the Variable Sub-Account's Accumulation Unit value
for that Business Day.

         ACCUMULATION UNIT VALUE.  An Accumulation Unit value varies to reflect
the investment experience of the underlying Fund, and may increase or decrease
from one Business Day to the next.  We arbitrarily set the Accumulation Unit
value for each Variable Sub-Account at $10 when we established the Sub-Account.
For each Valuation Period after the date of establishment, the Accumulation
Unit value is determined by multiplying the Accumulation Unit value for a
Sub-Account for the prior Valuation Period by the net investment factor for the
Variable Sub-Account for the Valuation Period.

         NET INVESTMENT FACTOR.  The net investment factor is an index used to
measure the investment performance of a Variable Sub-Account from one Valuation
Period to the next during the Accumulation Phase.  The net investment factor
for any Valuation Period is determined by dividing (a) by (b) where:

         (a) is the net result of:

                 (i) the Net Asset Value of the Fund in which the Variable
                 Sub-Account invests determined at the end of the current
                 Valuation Period, plus

                 (ii) the per share amount of any dividend or capital gain
                 distributions made by the Fund on shares held in the Variable
                 Sub-Account if the "ex-dividend" date occurs during the
                 current Valuation Period, and plus or minus

                 (iii) a per share charge or credit for any taxes reserved for,
                 which is determined by us to have resulted from the operations
                 of the Variable Sub-Account; and

         (b) is the Net Asset Value of the Fund in which the Variable
         Sub-Account invests determined at the end of the immediately preceding
         Valuation Period.

         The net investment factor may be more or less than, or equal to, one.

         FIXED ACCOUNT VALUE.  The Fixed Account Value is the sum of the value
of each Fixed Sub-Account (including a DCA Fixed Sub-Account) on any particular
day.  The value in each Fixed Sub-Account is equal to:  (1) the portion of the
purchase payment(s) allocated or amount transferred to the Sub-Account; plus
(2) interest at the Guaranteed Interest Rate; minus (3) any transfers from the
Sub-Account; minus (4) any withdrawals (including any associated surrender
charges) from the Sub-Account; and minus (5) any charges allocated to the
Sub-Account.  We also adjust the Fixed Sub-Account Value for any Market Value
Adjustment, the value of which could be positive or negative.





                                       29
<PAGE>   51
5.       WHAT ARE THE EXPENSES UNDER A CONTRACT?

         We deduct the charges described below.  The charges are for the
services and benefits we provide, costs and expenses we incur, and risks we
assume under the Contracts.  Services and benefits we provide include:  the
ability of Owners to make withdrawals and surrenders under the Contracts; the
death benefit paid on the death of the Owner; the available investment options,
including dollar-cost averaging, asset allocation, automatic portfolio
rebalancing, and systematic partial withdrawal programs; administration of the
income plan options available under the Contracts; and the distribution of
various reports to Owners.  Costs and expenses we incur include those
associated with various overhead and other expenses related to providing the
services and benefits provided by the Contracts, sales and marketing expenses,
and other costs of doing business.  Risks we assume include the risks that
Annuitants may live longer than estimated when the annuity factors under the
Contracts were established, that the amount of the death benefit will be
greater than Account Value, and that the costs of providing the services and
benefits under the Contracts will exceed the charges deducted.  We may also
deduct a charge for taxes.  See "Fee Table," page ___.

         We may realize a profit or loss on one or more of the charges.  We may
use any such profits for any corporate purpose, including, among other things,
payment of sales expenses.

         Unless otherwise specified, charges are deducted proportionately from
all Variable Sub-Accounts and Fixed Sub-Accounts in which you are invested.

         Charges under the Contracts may be reduced or eliminated when sales
result in savings, reduction of expenses and/or risks to the Company.
Generally, we will make such reductions based on the following factors:

         (i) the size of the group;

         (ii) the total amount of purchase payments to be received from the
group;

         (iii) the purposes for which the Contracts are purchased;

         (iv) the nature of the group for which the Contracts are purchased; and

         (v) any other circumstances that could reduce Contract costs and
expenses.

   
         We may also sell the Contracts with lower or no charges to a person
who is an officer, director or employee of Sage Life or of certain affiliates
of ours.  Reductions in Contract charges will not be unfairly discriminatory
against any person.  Please contact our Customer Service Center for more 
information about cost reductions
    





                                       30
<PAGE>   52
SURRENDER CHARGE

         None!  There are no surrender charges under the Contracts.

ANNUAL ADMINISTRATION CHARGE

         We will deduct an annual administration charge of $40 during the first
seven Contract Years (i) on each Contract Anniversary, and (ii) on the day of
any surrender if the surrender is not on the Contract Anniversary.  We will
waive this fee on and after the eighth Contract Anniversary, or if the Account
Value is at least $50,000 when the annual administration charge would have
otherwise been deducted.

TRANSFER CHARGE

         We currently do not deduct this charge.  However, we reserve the right
to deduct a transfer charge of up to $25 for the 13th and each subsequent
transfer during a Contract Year.  For the purpose of assessing the transfer
charge, each written or telephone request is considered to be one transfer,
regardless of the number of Sub-Accounts affected by the transfer.  In the
event that the transfer charge becomes applicable, it will be deducted
proportionately from the Sub-Accounts from which the transfer is made.
Transfers made in connection with the dollar-cost averaging, asset allocation,
and automatic portfolio rebalancing programs will not count as transfers for
purposes of assessing this charge.

ASSET-BASED CHARGES

         We deduct Asset-Based Charges for mortality and expense risks and
administrative costs assumed by us.  Prior to the Income Date, Asset-Based
Charges are deducted monthly and calculated as a percentage of the Variable
Account Value on the date of deduction.  On the Contract Date and monthly
thereafter, the Asset-Based Charges are deducted proportionately from the
Variable Sub-Accounts in which you are invested.  After the Income Date,
however, these charges are called Variable Sub-Account Charges and are deducted
daily from the assets of such Variable Sub-Accounts.  The maximum charges are:





                                       31
<PAGE>   53
<TABLE>
<CAPTION>
                              Combined Asset-Based Charges
                              ----------------------------
                     
                      Annual Charge    Monthly Charge     Daily Charge
                      -------------    --------------     ------------
<S>                      <C>             <C>               <C>
Contract Years 1-7       1.40%           .116667%          .0038626%
Contract Years 8+        1.25%           .104167%          .0034462%
</TABLE>

We reserve the right to deduct Asset-Based Charges on the effective date of any
transfer from the Fixed Account, or allocation of purchase payment to the
Variable Account, based on the amount transferred or allocated and based on the
number of days remaining until the next date of deduction.  These charges do
not apply to any Fixed Account Value.

   
PURCHASE PAYMENT TAX CHARGE
    

   
        During the first seven Contract Years only, we will deduct any state
premium tax that we incur if you surrender your Contract or begin receiving
regular income payments. This tax charge currently ranges from 0% to 3.5% 
depending upon the state. We currently do not intend to deduct this (from)
charge on or after the eighth Contract Year. 
    

FUND EXPENSES

        Because the Variable Account purchases shares of the various Funds
chosen by you, the net assets of the Variable Account will reflect the
investment management fees and other operating expenses incurred by those
Funds.  A table of each Fund's management fees and other expenses can be found
in the front of this Prospectus in the Fee Table.  For a description of each
Fund's expenses, management fees, and other expenses, see the Trusts'
prospectuses.

   
ADDITIONAL INFORMATION
    

   
        The Contracts are sold by broker-dealers through registered
representatives of such broker-dealers who are also appointed and licensed as
insurance agents of Sage Life. See "Distribution of the Contracts." These
broker-dealers receive commissions for selling Contracts calculated as a
percentage of purchase payments (up to a maximum of 6%). You do not pay these
commissions. We do. Broker-dealers who meet certain productivity and
profitability standards may be eligible for additional compensation.
    
 
6.     HOW WILL MY CONTRACT BE TAXED?

        THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE.
COUNSEL OR OTHER COMPETENT TAX ADVISERS SHOULD BE CONSULTED FOR MORE COMPLETE
INFORMATION.

INTRODUCTION

        The following summary provides a general description of the federal
income tax considerations associated with the Contract and does not purport to
be complete or to cover all tax situations.  This discussion is based upon our
understanding of the present federal income tax laws.  No representation is made
as to the likelihood of continuation of the present federal income tax laws or
as to how they may be interpreted by the Internal Revenue Service (the "IRS").

        The Contract may be purchased on a non-tax-qualified basis or purchased
on a tax-qualified basis.  A Qualified Contract is designed for use by
individuals whose purchase payments are comprised solely of proceeds from and/or
contributions under retirement plans that are intended to qualify as plans
entitled to special income tax treatment under Sections 408 or 408A of the
Code.  The ultimate effect of federal income taxes on the amounts held under a
Contract, or income payments, depends on the type of retirement plan, on the tax
and employment status of the individual concerned, and on our tax status. In
addition, certain





                                       32
<PAGE>   54
requirements must be satisfied in purchasing a Qualified Contract with proceeds
from a tax-qualified plan and receiving distributions from a Qualified Contract
in order to continue receiving favorable tax treatment.  Some retirement plans
are subject to distribution and other requirements that are not incorporated
into our Contract administration procedures.  Owners, participants, and
Beneficiaries are responsible for determining whether contributions,
distributions, and other transactions with respect to the Contract comply with
applicable law.  Therefore, purchasers of a Qualified Contract should seek
competent legal and tax advice regarding the suitability of a Contract for
their situation.  The following discussion assumes that the Qualified Contract
is purchased with proceeds from and/or contributions under retirement plans
that qualify for the intended special federal income tax treatment.

TAX STATUS OF THE CONTRACT

        DIVERSIFICATION REQUIREMENTS.  The Code requires that the investments of
the Variable Account be "adequately diversified" in order for the Contract to be
treated as an annuity contract for federal income tax purposes.  It is intended
that the Variable Account, through the Funds, will satisfy these diversification
requirements.

        In certain circumstances, owners of variable annuity contracts have been
considered for federal income tax purposes to be the owners of the assets of the
variable account supporting their contracts due to their ability to exercise
investment control over those assets.  When this is the case, the contract
owners have been currently taxed on income and gains attributable to the
variable account assets.  There is little guidance in this area, and some
features of the Contract, such as the flexibility of an Owner to allocate
purchase payments and transfer Account Values, have not been explicitly
addressed in published rulings.  While we believe that the Contract does not
give an Owner investment control over Variable Account assets, we reserve the
right to modify the Contract as necessary to prevent an Owner from being treated
as the owner of the Variable Account assets supporting the Contract.

        REQUIRED DISTRIBUTIONS.  To be treated as an annuity contract for
federal income tax purposes, the Code requires a Non-Qualified Contract to
contain certain provisions specifying how your interest in the Contract will be
distributed in the event of your death. The Non-Qualified Contracts contain
provisions that are intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued.  We intend to
review such provisions and modify them if necessary to assure that they comply
with the applicable requirements when such requirements are clarified by
regulation or otherwise.

        Other rules may apply to a Qualified Contract.

        The following discussion assumes that the Contract will qualify as an
annuity contract for federal income tax purposes.





                                       33
<PAGE>   55
TAX TREATMENT OF ANNUITIES

        IN GENERAL. We believe that if you are a natural person you will not be
taxed on increases in the value of a Contract until a distribution occurs or
until income payments begin. (An agreement to assign or pledge any portion of
the Account Value, and, in the case of a Qualified Contract, any portion of an
interest in the qualified plan, ordinarily will be treated as a distribution.)

TAXATION OF A NON-QUALIFIED CONTRACT

        NON-NATURAL PERSON. The Owner of any annuity contract who is not a
natural person ordinarily must include in income any increase in the excess of
the Account Value over the "investment in the contract" (ordinarily, the
purchase payments or other consideration paid for the contract) during the
taxable year.  There are some exceptions to this rule and a prospective Owner
that is not a natural person may wish to discuss these with a tax adviser.

        The following discussion generally applies to Contracts owned by natural
persons.

        WITHDRAWALS.  When a withdrawal (including Systematic Withdrawals) from
a Non-Qualified Contract occurs, the amount received will be treated as
ordinary income subject to tax up to an amount equal to the excess (if any) of
the Account Value immediately before the distribution over the Owner's
investment in the Contract at that time.  It is possible that a positive Market
Value Adjustment at the time of a withdrawal may be treated as part of the
Account Value immediately before the distribution.  You may want to consult a
tax adviser on the tax consequences of market value adjustments.

        SURRENDERS.  In the case of a surrender under a Non-Qualified Contract,
the amount received ordinarily will be taxable only to the extent it exceeds
the Owner's investment in the Contract.

        PENALTY TAX ON SURRENDER AND CERTAIN WITHDRAWALS.  In the case of a
distribution from a Non-Qualified Contract, a federal tax penalty equal to 10%
of the amount treated as income ordinarily will be imposed.  In general,
however, there is no penalty on distributions:

                -       made on or after the taxpayer reaches age 59 1/2;
                -       made on or after the death of an Owner;
                -       attributable to the taxpayer's becoming disabled; or
                -       made as part of a series of substantially equal
                        periodic payments for the life (or life expectancy) of
                        the taxpayer.

        Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions enumerated
above.  A tax adviser should be consulted regarding exceptions from the penalty
tax.





                                       34
<PAGE>   56
        INCOME PAYMENTS.  Although tax consequences may vary depending on the
payment option elected under an annuity contract, a portion of each income
payment is ordinarily not taxed and the remainder is taxed as ordinary income.
The non-taxable portion of an income payment is ordinarily determined in a
manner that is designed to allow you to recover your investment in the Contract
ratably on a tax-free basis over the expected stream of income payments, as
determined when income payments start.  Once your investment in the Contract
has been fully recovered, however, the full amount of each income payment is
subject to tax as ordinary income.

        TAXATION OF DEATH BENEFIT PROCEEDS.  Amounts may be distributed from a
Contract because of your death or the death of the Annuitant. Ordinarily, such
amounts are includible in the income of the recipient as follows:  (i) if
distributed in a lump sum, they are taxed in the same manner as a surrender of
the Contract, or (ii) if distributed under an income payment option, they are
taxed in the same way as income payments.

        TRANSFERS, ASSIGNMENTS OF A CONTRACT.  A transfer or assignment of
ownership of a Contract, the designation of an Annuitant, the designation of a
payee other than yourself, the selection of certain Income Dates, or the
exchange of a Contract may result in certain tax consequences to you that are
not discussed herein.  An Owner contemplating any such transfer or assignment
should consult a tax adviser as to the tax consequences.

        WITHHOLDING.  Annuity distributions are ordinarily subject to
withholding for the recipient's federal income tax liability.  Recipients can
ordinarily elect, however, not to have tax withheld from distributions.

        MULTIPLE CONTRACTS.  All annuity contracts that we or our affiliates
issue to the same Owner during any calendar year are treated as one annuity
contract for purposes of determining the amount includible in such Owner's
income when a taxable distribution occurs.

TAXATION OF A QUALIFIED CONTRACT

        The Contract is designed for use with several types of qualified plans.
The tax rules applicable to participants in these qualified plans vary according
to the type of plan and the terms and conditions of the plan itself.  Special
favorable tax treatment may be available for certain types of contributions and
distributions.  Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; and in other specified circumstances.  Therefore, no
attempt is made to provide more than general information about the use of the
Contract with the various types of qualified retirement plans.  Contract Owners,
Annuitants, and Beneficiaries are cautioned that the rights of any person to any
benefits under these qualified retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contract, but we





                                       35
<PAGE>   57
shall not be bound by the terms and conditions of such plans to the extent such
terms contradict the Contract, unless we consent.  For IRAs under Section 408
of the Code (described below), distributions generally must commence no later
than April 1 of the calendar year following the calendar year in which the
Owner reaches age 70 1/2.  Roth IRAs under Section 408A of the Code do not
require distributions at any time prior to the Owner's death.

        WITHDRAWALS.  When a withdrawal from a Qualified Contract occurs, a
pro-rata portion of the amount received is taxable, ordinarily based on the
ratio of the Owner's investment in the contract (ordinarily, any non-deductible
purchase payments or other consideration paid for the Contract) to the Owner's
total accrued benefit balance under the retirement plan.  For a Qualified
Contract, the investment in the contract can be zero.  Special tax rules apply
to withdrawals from Roth IRAs (see below).  Distributions from Qualified
Contracts generally are subject to withholding for the Owner's federal income
tax liability.  The withholding rate varies according to the type of
distribution and the Owner's tax status. The Owner will be provided the
opportunity to elect not to have tax withheld from distributions.

        Brief descriptions follow of the various types of qualified retirement
plans in connection with a Contract.  We will endorse the Contract as necessary
to conform it to the requirements of such plan.

        INDIVIDUAL RETIREMENT ANNUITIES.  Section 408 of the Code permits
eligible individuals to contribute to an individual retirement program known as
an "Individual Retirement Annuity" or "IRA."  These IRAs are subject to limits
on the amount that may be contributed, the persons who may be eligible, and on
the time when distributions may commence.  IRA contributions may be deductible
in whole or in part depending on the Owner's income and whether the Owner is a
participant in a qualified plan.  Earnings in the IRA are not taxed until
distributed. Also, distributions from certain other types of qualified
retirement plans may be rolled over on a tax-deferred basis into an IRA.
Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject
to a 10% federal penalty tax.

        SIMPLE IRAs.  Certain small employers may establish SIMPLE plans as
provided by Section 408(p) of the Code, under which employees may elect to
defer to a SIMPLE IRA a percentage of compensation up to $6,000 (as increased
for cost of living adjustments).  The sponsoring employer is required to make
matching or non-elective contributions on behalf of employees.  Distributions
from SIMPLE IRAs are subject to the same restrictions that apply to IRA
distributions and are taxed as ordinary income.  Subject to certain exceptions,
premature distributions prior to age 59 1/2 are subject to a 10% federal penalty
tax, which is increased to 25% if the distribution occurs within the first two
years after the commencement of the employee's participation in the plan.

        ROTH IRAs.  Section 408A of the Code permits certain eligible
individuals to contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not





                                       36
<PAGE>   58
deductible and must be made in cash or as a rollover or transfer from another
Roth IRA or other IRA.  A conversion of an IRA to a Roth IRA may be subject to
tax and other special rules may apply.  You should consult a tax adviser before
combining any converted amounts with any other Roth IRA contributions,
including any other conversion amounts from other tax years.  Distributions
from a Roth IRA ordinarily are not taxed, except that, once aggregate
distributions exceed contributions to the Roth IRA, income tax and a 10%
federal penalty tax may apply to distributions made (1) before age 59 1/2
(subject to certain exceptions) or (2) during the five taxable years starting
with the year in which the first contribution is made to the Roth IRA.  A 10%
federal penalty tax may apply to amounts attributable to a conversion from an
IRA if they are distributed during the five taxable years beginning with the
year in which the conversion was made.

OTHER TAX CONSEQUENCES

        As noted above, the foregoing comments about the federal tax
consequences under the Contract are not exhaustive, and special rules are
provided with respect to other tax situations not discussed in this Prospectus.
Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of distributions under a Contract depend
on the individual circumstances of each Owner or recipient of the distribution.
A competent tax adviser should be consulted for further information.

        Further, the federal income tax consequences discussed herein reflect
our understanding of current law, and the law may change.  Although the
likelihood of legislative change is uncertain, there is always the possibility
that the tax treatment of the Contracts could change by legislation or other
means.  It is also possible that any change could be retroactive (that is,
effective prior to the date of the change).  A tax adviser should be consulted
with respect to legislative developments and their effect on the Contract.

7.      HOW DO I ACCESS MY MONEY?

        You can partially withdraw from or surrender your Contract.  When you
surrender your Contract, you can take the proceeds in a single sum, or you can
request that we pay the proceeds under one of our income plans.  See "What are
my Income Payment Options?," page __.

WITHDRAWALS

        You may withdraw all or part of your Surrender Value at any time before
the Income Date.  (If you have elected the "payments for a specified period
certain" income plan option, you may request a full withdrawal after the Income
Date; otherwise, no withdrawals are permitted after the Income Date).  You may
make your withdrawal request in writing or by telephone.  See "Requesting
Payments," page __.  Any withdrawal must be at least $250.  We will pay you the
withdrawal amount in one sum.  Under certain circumstances, we may delay this
payment.  See "Requesting Payments," page __ .





                                       37
<PAGE>   59

        When you request a withdrawal, you can direct how the withdrawal will
be deducted from your Account Value.  If you provide no directions, we will
deduct the withdrawal from your Account Value in the Sub-Accounts on a pro-rata
basis.

        A PARTIAL WITHDRAWAL WILL REDUCE YOUR DEATH BENEFIT AND MAY BE SUBJECT
TO A MARKET VALUE ADJUSTMENT.  (SEE "WHAT ARE THE EXPENSES UNDER A CONTRACT?"
AND "DOES THE CONTRACT HAVE A DEATH BENEFIT?")

        Please note that if your requested withdrawal would reduce your Account
Value below $2,000, we reserve the right to treat the request as a withdrawal
of only the excess over $2,000.


SYSTEMATIC PARTIAL WITHDRAWAL PROGRAM

        The systematic partial withdrawal program provides automatic monthly,
quarterly, semi-annual, or annual payments to you from the amounts you have
accumulated in the Variable Sub-Accounts and/or the Fixed Sub-Accounts.  You
select the day withdrawals will be taken, but this day can be no later than the
28th day of the month.  If a day is not selected, the day of each month that
corresponds to your Contract Date will be used.  If that date is not a Business
Day, we will use the next following Business Day.  The minimum payment is $100.
You can elect to withdraw either earnings in a prior period (for example, prior
month for monthly withdrawals or prior quarter for quarterly withdrawals) or a
specified dollar amount.

        -     If you elect earnings, we will deduct the withdrawals from the
              Sub-Accounts in which you are invested on a pro-rata basis.

        -     If you elect a specified dollar amount, we will deduct the
              withdrawals from the Sub-Accounts in which you are invested on a
              pro-rata basis unless you specify otherwise.  Any amount in
              excess of interest earned on a Fixed Sub-Account in the prior
              period ordinarily will be subject to a Market Value Adjustment
              (see "Market Value Adjustment," page ___).

        You may elect to participate in the systematic partial withdrawal
program at any time before the Income Date by providing Satisfactory Notice.
Once we have received your request, the program will begin and will remain in
effect until your Account Value drops to zero.  You may cancel or make changes
in the program at any time by providing us with Satisfactory Notice. We do not
deduct any other charges for this program.  We reserve the right to discontinue
offering the systematic partial withdrawal program at any time and for any
reason.  Systematic partial withdrawals are not available while you are
participating in the dollar-cost averaging program.





                                       38
<PAGE>   60
IRA PARTIAL WITHDRAWAL PROGRAM

        If your Contract is an IRA Contract and you will attain age 70 1/2 in
the current calendar year, distributions may be made to satisfy requirements
imposed by federal tax law.  An IRA partial withdrawal provides payout of
amounts required to be distributed by the IRS rules governing mandatory
distributions under qualified plans.  A notice before distributions must
commence will be sent, and you may elect this program at that time, or at a
later date.

        The IRA Partial Withdrawal program may not be elected while you are
participating in the systematic partial withdrawal program.  IRA partial
withdrawals may be taken on a monthly, quarterly, semi-annual, or annual basis.
A minimum withdrawal of $100 is required.  You select the day withdrawals will
be taken, but this day can be no later than the 28th day of the month.  If a
day is not elected, the day of each month that corresponds to your Contract
date will be used.

REQUESTING PAYMENTS

        You must provide us with Satisfactory Notice of your request for
payment.  We will ordinarily pay any death benefit, withdrawal, or surrender
proceeds within seven days after receipt at our Customer Service Center of all
the requirements for such a payment.  The amount will be determined as of the
date our Customer Service Center receives all such requirements.

        We may delay making a payment, applying Account Value to an income
plan, or processing a transfer request if:  (1) the disposal or valuation of
the Variable Account's assets is not reasonably practicable because the New
York Stock Exchange is closed for other than a regular holiday or weekend,
trading is restricted by the SEC, or the SEC declares that an emergency exists;
or (2) the SEC, by order, permits postponement of payment to protect our
Contract Owners.  We also may defer making payments attributable to a check
that has not cleared (which may take up to 15 days), and we may defer payment
of proceeds from the Fixed Account for a withdrawal, surrender, or transfer
request for up to six months from the date we receive the request.  If payment
is deferred 30 days or more, the amount deferred will earn interest at a rate
not less than the minimum required in the jurisdiction in which the Contract is
delivered.

8.       HOW IS CONTRACT PERFORMANCE PRESENTED?

        We may advertise or include in sales literature yields, effective
yields, and total returns for the Variable Sub-Accounts.  Effective yields and
total returns for the Variable Sub-Accounts are based on the investment
performance of the corresponding Funds.  THESE FIGURES ARE BASED ON HISTORICAL
PERFORMANCE AND DO NOT INDICATE OR PROJECT FUTURE RESULTS.  We may also
advertise or include in sales literature a Variable Sub-Account's performance
compared to certain performance rankings and indexes compiled by independent
organizations, and we may present





                                       39
<PAGE>   61
performance rankings and indexes without such a comparison.

        The yield of the Money Market Sub-Account refers to the annualized
income generated by an investment in the Sub-Account over a specified seven-day
period.  The yield is calculated by assuming that the income generated for that
seven-day period is generated each seven-day period over a 52-week period.  The
effective yield is calculated similarly but, when annualized, the income earned
by an investment in the Money Market Sub-Account is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.

        The yield of a Variable Sub-Account (except the Money Market
Sub-Account) refers to the annualized income generated by an investment in the
Variable Sub-Account over a specified 30-day or one-month period.  The yield is
calculated by assuming that the income generated by the investment during that
30-day or one-month period is generated each period over a 12-month period.

        The total return of a Variable Sub-Account refers to return quotations
assuming an investment under a Contract has been held in the Variable
Sub-Account for the stated times. Average annual total return of a Variable
Sub-Account tells you the return you would have experienced if you allocated a
$1,000 purchase payment to a Variable Sub-Account for the specified period.
Standardized average annual total return reflects all historical investment
results for the Variable Sub-Account, less all charges and deductions applied
against the Variable Sub-Account, but excluding any deductions for purchase
payment taxes. Standardized total return may be quoted for various periods
including 1 year, 5 years, and 10 years, or from inception of the Variable
Sub-Account if any of those periods are not available.  In addition, we may
from time to time disclose average annual total return for non-standard periods
and cumulative total return for a Variable Sub-Account.

        We may, from time to time, also disclose yield, standard total returns,
and non-standard total returns for the Funds.  We may also disclose yield,
standard total returns, and non-standard total returns of funds or other
accounts managed by the Adviser or Subadviser with investment objectives
similar to those of the Funds, and Variable Sub-Account performance based on
that performance data.  Non-standard performance will be accompanied by
standard performance.

        In advertising and sales literature, the performance of each Variable
Sub-Account may be compared to the performance of other variable annuity
issuers in general or to the performance of particular types of variable
annuities investing in mutual funds, or investment series of mutual funds with
investment objectives similar to each of the Variable Sub-Accounts.  Advertising
and sales literature may also compare the performance of a Variable Sub-Account
to the S&P 500 Composite Stock Price Index, a widely used measure of stock
performance.  This unmanaged index assumes the reinvestment of dividends but
does not reflect any deduction for the expense of operating or managing an
investment portfolio.  Other independent ranking services and





                                       40
<PAGE>   62
indexes may also be used as a source of performance comparison.  We may also
report other information, including the effect of tax-deferred compounding on a
Variable Sub-Account's investment returns, or returns in general, which may be
illustrated by tables, graphs, or charts.

9.      DOES THE CONTRACT HAVE A DEATH BENEFIT?

        Your Contract provides a death benefit for your Beneficiary.

        If any Owner dies before the Income Date, we will pay the Beneficiary
the greatest of:

        (i)     the Account Value determined as of the Business Day we receive
                proof of death (if proof of death is received on other than a
                Business Day, the proof will be deemed received on the next
                following Business Day);

        (ii)    100% of the sum of all purchase payments made under the
                Contract, reduced by the amount of any prior withdrawal
                (including any associated Market Value Adjustment incurred);
                or

        (iii)   the highest anniversary value (the "Highest Anniversary
                Value").

        The Highest Anniversary Value is equal to the greatest anniversary
value attained in the following manner.  When we receive proof of death, we
will calculate an anniversary value for each Contract Anniversary prior to the
date of the Owner's death, but not beyond the Owner's attained age 80.  An
anniversary value for a Contract Anniversary is equal to (1) the Account Value
on that Contract Anniversary, (2) increased by the dollar amount of any
purchase payments made since the Contract Anniversary, and (3) reduced
proportionately by any withdrawals (including any associated Market Value
Adjustment incurred) taken since that Contract Anniversary.  (By
proportionately, we take the percentage by which the withdrawal decreases the
Account Value and we reduce the sum of (1) and (2) by that percentage.)

        If there are multiple Owners, the age of the oldest Owner will be
used to determine the applicable death benefit.  If there is no Owner who is a
natural person (that is, an individual), we will treat the Annuitant as Owner
for the purpose of determining when the Owner dies and the Annuitant's age will
determine the death benefit payable to the Beneficiary.

        OWNER'S DEATH BEFORE THE INCOME DATE.  If an Owner dies before the
Income Date, the Beneficiary has up to five years from the Owner's date of
death to request that the death benefit be paid in one lump sum.  If the lump
sum is elected and paid, the Contract will terminate, and we will have no
further obligations under the Contract.  Alternatively, the Beneficiary may
provide us with Satisfactory Notice and request that the Contract continue, in
which case we will continue the Contract subject to the following conditions:





                                       41
<PAGE>   63
                 1.  If there are joint Owners, the surviving Owner becomes the
                     new Owner.  Otherwise, the Beneficiary becomes the new
                     Owner.

                 2.  Unless otherwise specified, any excess of the death
                     benefit over the Account Value will be allocated to and
                     among the Variable and Fixed Accounts in proportion to
                     their values as of the date on which the death benefit is
                     determined.  We will establish a new Fixed Sub-Account for
                     any allocation to the Fixed Account based on the Guarantee
                     Period the new Owner then elects.

                 3.  No additional purchase payments may be applied to the
                     Contract.

         However, certain distribution rules will apply to the continued
Contract.  If the new Owner is not the deceased Owner's spouse, we must
distribute the entire interest in the Contract either:  (i) over the life of
the new Owner, but not extending beyond the life expectancy of the new Owner,
with distributions beginning within one year of the prior Owner's death; or
(ii) within five years of the deceased Owner's death.  These distributions, if
from the Fixed Account, are subject to our Market Value Adjustment rules.

         Alternatively, if the new Owner is the deceased Owner's spouse, the
Contract will continue with the surviving spouse as the new Owner.  The
surviving spouse may name a new Beneficiary.  If no Beneficiary is so named,
the surviving spouse's estate will be the Beneficiary.  Upon the death of the
surviving spouse, the death benefit will equal the Account Value as of the
Business Day we receive proof of the spouse's death.  We will distribute the
entire interest in this contract to the new Beneficiary in accordance with the
provisions that apply in the case when the new Owner is not the surviving
spouse.

         If there is more than one Beneficiary, the distribution provisions
will independently apply to each Beneficiary.

         If no Owner of the Contract is an individual, the death of any
Annuitant under the Contract will be treated as the death of an Owner.

         In all events, death benefit distributions will be made in accordance
with section 72(s) of the Code, or any applicable successor provision.

         OWNER'S DEATH AFTER THE INCOME DATE.  If any Owner dies on or after
the Income Date, but before the time the entire interest in the Contract has
been distributed, the remaining portion will be distributed at least as rapidly
as under the method of distribution being used as of the date of the Owner's
death.

         If income payments have been selected based on an income plan
providing for payments for a guaranteed period and the Annuitant dies on or
after the Income Date, we will make the





                                       42
<PAGE>   64
remaining guaranteed payments to the Beneficiary.  Any remaining payments will
be made as rapidly as under the method of distribution being used as of the
date of the Annuitant's death.  If no Beneficiary is living, we will commute
any unpaid guaranteed payments to a single sum (on the basis of the interest
rate used in determining the payments) and pay that single sum to the estate of
the last to die of the Annuitant or the Beneficiary.

         PROOF OF DEATH.  Proof of death must be received at our Customer
Service Center before we will pay any death benefit.  We will accept one of the
following items:

             1.  An original certified copy of an official death certificate; or

             2.  An original certified copy of a decree of a court of
                 competent jurisdiction as to the finding of death; or

             3.  Any other proof satisfactory to us.

10.      WHAT OTHER INFORMATION SHOULD I KNOW?

SEPARATE ACCOUNTS

         THE SAGE VARIABLE ANNUITY ACCOUNT A.  We established the Variable
Account as a separate investment account under Delaware law on December 3,
1997.  The Variable Account may invest in mutual funds, unit investment trusts,
and other investment portfolios.  We own the assets in the Variable Account and
are obligated to pay all benefits under the Contracts.  The Variable Account is
used to support the Contracts as well as for other purposes permitted by law.
The Variable Account is registered with the SEC as a unit investment trust
under the 1940 Act and qualifies as a "separate account" within the meaning of
the federal securities laws.  Such registration does not involve any
supervision by the SEC of the management of the Variable Account or Sage Life.

         The Variable Account is divided into Variable Sub-Accounts, each of
which currently invests in shares of a specific Fund of AIM Variable Insurance
Funds, Inc., The Alger American Fund, Liberty Variable Investment Trust,
SteinRoe Variable Investment Trust, MFS(R) Variable Investment Trust(TM), Morgan
Stanley Universal Funds, Inc., Oppenheimer Variable Account Funds, Sage Life
Investment Trust, and T. Rowe Price Equity Series, Inc.  Variable Sub-Accounts
buy and redeem Fund shares at net asset value without any sales charge.  Any
dividend from net investment income and distribution from realized gains from
security transactions of a Fund are reinvested at net asset value in shares of
the same Fund.  Income, gains and losses, realized or unrealized, of the
Variable Account are credited to or charged against the Variable Account
without regard to any other income, gains or losses of Sage Life.  Assets equal
to the reserves and other Contract liabilities with respect to the Variable
Account are not chargeable with liabilities arising out of any other business
or account of Sage Life.  If the assets





                                       43
<PAGE>   65
exceed the required reserves and other liabilities, we may transfer the excess
to our General Account.

         THE SAGE FIXED INTEREST ACCOUNT A.  The Fixed Account is a separate
investment account under state insurance law.  It is maintained separate from
our General Account and separate from any other separate account that we may
have.  We own the assets in the Fixed Account.  Assets equal to the reserves
and other liabilities of the Fixed Account will not be charged with liabilities
that arise from any other business that we conduct.  Thus, the Fixed Account
represents pools of assets that provide an additional measure of assurance that
Owners will receive full payment of benefits under the Contracts.  We may
transfer to our General Account assets that exceed the reserves and other
liabilities of the Fixed Account.  Notwithstanding the foregoing, our
obligations under (and values and benefits under) the Fixed Account do not vary
as a function of the investment performance of the Fixed Account.  Owners and
Beneficiaries with rights under the Contracts do not participate in the
investment gains or losses of the assets of the Fixed Account.  Such gains or
losses accrue solely to us.  We retain the risk that the value of the assets in
the Fixed Account may fall below the reserves and other liabilities that we
must maintain in connection with our obligations under the Fixed Account.  In
such an event, we will transfer assets from our General Account to the Fixed
Account to make up the difference.  The Fixed Account is not required to be
registered as an investment company under the 1940 Act.

         VOTING OF FUND SHARES.  We are the legal owner of shares held by the
Variable Sub-Accounts and as such, have the right to vote on all matters
submitted to shareholders of the Funds.  However, as required by law, we will
vote shares held in the Variable Sub-Accounts at regular and special meetings
of shareholders of the Funds in accordance with instructions received from
Owners with Account Value in the Variable Sub-Accounts.  To obtain voting
instructions from Owners, before a meeting of shareholders of the Funds, we
will send Owners voting instruction materials, a voting instruction form, and
any other related material.  Shares held by a Variable Sub-Account for which no
timely instructions are received will be voted by us in the same proportion as
those shares for which voting instructions are received.  Should the applicable
federal securities laws, regulations, or interpretations thereof change so as
to permit us to vote shares of the Funds in our own right, we may elect to do
so.

MODIFICATION

         When permitted by applicable law, we may modify the Contracts as
follows:  (1) deregister the Variable Account under the 1940 Act; (2) operate
the Variable Account as a management company under the 1940 Act if it is
operating as a unit investment trust; (3) operate the Variable Account as a
unit investment trust under the 1940 Act if it is operating as a managed
separate account; (4) restrict or eliminate any voting rights of Owners, or
other persons who have voting rights as to the Variable Account; (5) combine
the Variable Account with other separate accounts; and (6) combine a Variable
Sub-Account with another Variable Sub-Account.  We also





                                       44
<PAGE>   66
reserve the right, subject to applicable law, to make additions to, deletions
from, or substitutions of shares of a Fund that are held by the Variable
Account or that the Variable Account may purchase; and to establish additional
Variable Sub-Accounts or eliminate Variable Sub-Accounts, if marketing, tax, or
investment conditions so warrant.  Subject to any required regulatory
approvals, we reserve the right to transfer assets of a Variable Sub-Account
that we determine to be associated with the class of Contracts to which the
Contract belongs, to another separate account or to another separate account
sub-account.

         If the actions we take result in a material change in the underlying
investments of a Variable Sub-Account in which you are invested, we will notify
you of the change.  You may then make a new choice of Variable Sub-Accounts.

DISTRIBUTION OF THE CONTRACTS

         Sage Distributors, Inc. ("Sage Distributors"), acts as the distributor
(principal underwriter) of the Contracts.  Sage Distributors is a corporation
organized under the laws of the state of Delaware in 1997, is registered as a
broker-dealer under the Securities Exchange Act of 1934, and is a member of the
National Association of Securities Dealers, Inc. (the "NASD").  Sage
Distributors is a wholly owned subsidiary of Sage Insurance Group, Inc.  We
compensate Sage Distributors for acting as principal underwriter under a
distribution agreement.  The Contracts are offered on a continuous basis and we
do not anticipate discontinuing their sale.  The Contracts may not be available
in all states.

   
    

EXPERTS

         Ernst & Young LLP, independent auditors, have audited our financial
statements for the year ended December 31, 1997, as set forth in their report,
which is included in this Prospectus.  Our financial statements are included in
this Prospectus in reliance on their report, given on their authority as
experts in accounting and auditing.

LEGAL PROCEEDINGS

         Sage Life and its subsidiaries, as of the date of this Prospectus, are
not involved in any lawsuits.  However, Sage Life's direct and indirect parent
companies, like other companies, are involved in lawsuits.  In some lawsuits
involving insurers, substantial damages have been sought and/or material
settlement payments have been made.  Although the outcome of any litigation





                                       45
<PAGE>   67
cannot be predicted with certainty, Sage Life believes that at the present time
there are no pending or threatened lawsuits that are reasonably likely to have
a material adverse impact on the Variable Account, the Fixed Account, the
General Account, or Sage Life.

REPORTS TO CONTRACT OWNERS

         We maintain records and accounts of all transactions involving the
Contracts, the Variable Account, and the Fixed Account at our Customer Service
Center.  Each year, or more often if required by law, you will be sent a report
showing information about your Contract for the period covered by the report.
You will also be sent an annual and a semi-annual report for each Fund
underlying a Variable Sub-Account in which you are invested as required by the
1940 Act.  In addition, when you make purchase payments, or if you make
transfers or withdrawals, you will receive a confirmation of these
transactions.

ASSIGNMENT

         You may assign your Contract at any time prior to the Income Date.  No
assignment will be binding on us unless we receive Satisfactory Notice.  We
will not be liable for any payments made or actions we take before the
assignment is accepted by us.  An absolute assignment will revoke the interest
of any revocable Beneficiary.  We are not responsible for the validity of any
assignment.  AN ASSIGNMENT MAY BE A TAXABLE EVENT.

CHANGE OF OWNER, BENEFICIARY, OR ANNUITANT

         During your lifetime and while your Contract is in force, you can
transfer ownership of your Contract, change the Beneficiary, or change the
Annuitant.  However, the Annuitant cannot be changed after the Income Date.  To
make any of these changes, you must send us Satisfactory Notice.  If accepted,
any change in Owner, Beneficiary, or Annuitant will take effect on the date you
signed the notice.  Any of these changes will not affect any payment made or
action taken by us before our acceptance.  A CHANGE IN OWNER MAY BE A TAXABLE
EVENT AND MAY ALSO EFFECT THE AMOUNT OF DEATH BENEFIT PAYABLE UNDER YOUR
CONTRACT.

MISSTATEMENT AND PROOF OF AGE, SEX, OR SURVIVAL

         We may require proof of age, sex, or survival of any person upon whose
age, sex, or survival any payments depend.  If the age or sex of the Annuitant
has been misstated, or if the age of the Owner has been misstated, the benefits
will be those that the Account Value applied would have provided for the
correct age and sex.  If we have made incorrect income payments, we will pay
the amount of any underpayment.  The amount of any overpayment will be deducted
from future income payments.







                                       46
<PAGE>   68
INCONTESTABILITY

         Your Contract is incontestable from its Contract Date.


AUTHORITY TO MAKE AGREEMENTS

         All agreements made by us must be signed by one of our officers.  No
other person, including an insurance agent or registered representative, can
change the terms of your Contract or make changes to it without our consent.

PREPARING FOR THE YEAR 2000

         Many existing computer programs use only two digits to identify a year
in the date field.  These programs were designed and developed without
considering the impact of the upcoming change in the century.  If not
corrected, many computer applications could fail or create erroneous results by
or at the year 2000.  This potential problem has become known as the "Year 2000
issue."  The Year 2000 issue affects virtually all companies and organizations.

         Computer applications that are affected by the Year 2000 issue could
impact the Company's business functions in various ways, ranging from a
complete inability to perform critical business functions to a loss of
productivity in varying degrees.  Likewise, the failure of some computer
applications could have no impact on critical business functions.  The Company
used these issues as critical components in the evaluation and selection of
in-house systems and of third party administrators.

         Since the Company plans to outsource most of its operating functions,
there will only be a limited number of in-house systems utilized.  At present,
the only in-house system utilized is the accounting system.  This system was
certified as Year 2000 compliant before it was selected and installed for
operation.  The Company also intends to purchase a reserve valuation system and
a reinsurance system.  Year 2000 compliance will be a critical component in the
evaluation and selection process for those two systems.

         The Company has various third party administrators (including
investment advisors, brokers, transfer agents, and other financial services
institutions) for the processing of such tasks as contract administration, fund
administration, underwriting and investment administration.  The quality of
these third party administrators was of paramount importance in the selection
process.

         Although the Company has received assurances from all of its third
party administrators, it is currently working with them to assess all Year 2000
issues associated with the processing of the Company's applications.  This
assessment involves the testing of the data being processed by third party
administrators and electronically interfaced into the Company's accounting
system.  As to outside organizations from which the Company will not be relying
on electronic interface, the Company will be relying on responses to
questionnaires supplied to these service providers





                                       47
<PAGE>   69
as to their status on Year 2000 compliance.  Based upon the responses received
from these third party administrators, the Company will develop a plan to
assure Year 2000 compliance by all third party administrators.  The Company
anticipates completing all testing well in advance of January 1, 2000.  As this
testing has and continues to be done in the normal course of system
development, the Company has not budgeted any costs associated with the Year
2000 issue.  In addition, Year 2000 costs have been deemed immaterial.

         The failure of any of the Company's third party administrators to
achieve complete compliance could have a material adverse effect on the
Company's ability to conduct its business, including delays in calculating unit
values, redeeming shares, delivering account statements and providing other
information, communication and servicing to Contract Owners.  The Company
believes that it has taken the necessary provisions, both through selection and
testing, to assure that it will not experience any material adverse effects on
the Company's ability to conduct its business.  The Company does however
realize the importance of this issue and is currently developing a detailed
contingency plan for operations in the unlikely event one or more of its third
party administrators is unable to fulfill its obligations.

FINANCIAL STATEMENTS

         No financial statements are presented for the Variable Account because
it has yet to commence operations.

         The audited financial statements for Sage Life for the year ended
December 31, 1997 are included in this Prospectus.  These financial statements
should be considered only as bearing on the ability of Sage Life to meet its
obligations under the Contracts.  They should not be considered as bearing on
the investment performance of the assets held in the Variable Account.

11.      HOW CAN I MAKE INQUIRIES?

         Inquiries regarding your Contract may be made by writing to us at our
Customer Service Center, by calling us at 877-835-7243 (Toll Free), or by
contacting one of our authorized registered representatives.

12.      ADDITIONAL INFORMATION ABOUT SAGE LIFE ASSURANCE OF AMERICA, INC.

HISTORY AND BUSINESS

Ownership

         Sage Life Assurance of America, Inc. was incorporated under the laws
of the state of Delaware in 1981. The Company is authorized to write general
life insurance and fixed and variable annuity contracts in all states except
New York, and also is licensed to conduct variable





                                       48
<PAGE>   70
life insurance business in a majority of states.

         The Company's formation was sponsored in 1981 by Fidelity Mutual Life
Insurance Company, a Pennsylvania insurer, under the name of Fidelity Standard
Life Insurance Company ("Fidelity Life").  Fidelity Life was acquired by
Security First Life Insurance Company ("Security First") of Los Angeles,
California in December 1984.  In January 1997, Fidelity Life was acquired by
Sage Insurance Group, Inc. ("Sage Insurance Group") (formerly Finplan
Investment Corp.), a Delaware corporation and an indirect subsidiary of Sage
Group Limited ("Sage Group"), a South African corporation, which is the
Company's ultimate parent. The Company changed to its present name in September
1997.  In December 1998, a new company, Sage Life Holdings of America, Inc.,
was formed by the Sage Insurance Group to act as the new immediate parent of
the Company.  The transaction is discussed more fully in the section below
entitled "Holding Company Structure and Background."

Prior Business Operations

         As a Security First subsidiary, the Company specialized in the
marketing of annuities qualifying under Section 403(b) of the Internal Revenue
Code.  Under an assumption reinsurance agreement, Fidelity Life's annuity
business was irrevocably transferred to Security First in January 1997 except
for a small number of contracts.  During 1998, all of the remaining annuity
business of Fidelity Life was assumption reinsured by Security First.  Security
First is now a subsidiary of The Metropolitan Life Insurance Company.

Holding Company Structure and Background

         As mentioned above, the Company is a wholly owned subsidiary of Sage
Life Holdings of America, Inc. ("Sage Life Holdings"), which in turn is a
wholly owned subsidiary of Sage Insurance Group, a holding company for
affiliated entities connected with the life and annuity insurance business in
the United States. The Company is also an indirect wholly owned subsidiary of
Sage Group, a corporation quoted on the Johannesburg Stock Exchange.  Sage
Group is a holding company with a thirty-year history of extensive operating
experience in mutual funds, life assurance and investment management.  Sage
Group has directly and indirectly engaged in insurance marketing activities in
the United States since 1977 through its financial interests in Independent
Financial Marketing Group Inc., a financial planning and bank insurance
marketing company.  Sage Group sold its interest in Independent Financial
Marketing Group in March 1996 to the Liberty Financial Companies of Boston.

         Sage Group signed a letter of intent with Swiss Re Life and Health
America, Inc.  ("Swiss Re") on December 1, 1998.  Swiss Re's ultimate parent is
Swiss Reinsurance Company, Switzerland, one of the world's largest life and
health reinsurance groups.  The letter of intent contemplates that Swiss Re
will enter into reinsurance arrangements with the Company.  In addition, it
provides for an investment by Swiss Re in a newly formed company, Sage Life





                                       49
<PAGE>   71
Holdings, that has become the immediate parent of the Company and a
wholly-owned subsidiary of Sage Insurance Group.  The arrangements contemplated
by the letter of intent may be subject to regulatory approval.

SELECTED FINANCIAL DATA

         The historical financial results of the Company for the calendar year
1996 and all prior years are not comparable to the results for the years 1997
and 1998 due to the substantial change in the business operations of the
Company.  The Company effectively disposed of all in-force business existing as
of December 31, 1996 and, therefore, on January 1, 1997, had no insurance
liabilities under any policy contracts of the Company other than the small
number of contracts that were not 100% assumption reinsured to the Company's
former parent company.  These insurance liabilities were subsequently reinsured
during 1998.  Effectively, therefore, since January 1997, the Company became
comparable to a new company that had not yet commenced business activities.

         The following selected financial data as of December 31, 1997 and for
the year then ended, has been derived from the audited financial statements of
the Company.  The following selected financial data as of October 31, 1998 and
for the ten months then ended, has been derived from the unaudited financial
statements of the Company, which have been prepared on the same basis as the
Company's audited financial statements and, in the opinion of management,
contain all adjustments consisting of only normal recurring adjustments
necessary for a fair presentation of the financial position and results of
operations for this period.  The results of operations for the ten months ended
October  31, 1998 may not be indicative of results for the full year.  The data
set forth below should be read in conjunction with the financial statements,
including related notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
                                                              Selected Financial Data
                                                                   (in thousands)

                                                          Ten months
                                                             ended             Year ended
                                                          October 31,         December 31,
                                                             1998                 1997
                                                             ----                 ----
         <S>                                                 <C>                <C>
         Income Statement Data:
         Revenues:
         Net investment income                               $1,075             $  989

         Expenses:
         Amortization expense                                   337                325
         General and administrative expenses                  1,071              1,016
                                                            -------             ------
         Total expenses                                       1,408              1,341

         Loss before taxes                                     (332)             (352)
</TABLE>





                                       50
<PAGE>   72
<TABLE>
           <S>                                                <C>                <C>
           Income tax expense                                       -                  -
                                                              -------            -------

           Net loss                                           $  (332)           $  (352)
                                                              =======            =======


           Balance Sheet Data:
           Total Assets                                       $36,317            $36,689

           Stockholder's Equity                               $36,242            $33,202
</TABLE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Introduction

         The following discussion highlights significant factors influencing
the results of operations of the Company.  It should be read in conjunction
with the Company's financial statements and the related notes included in this
Prospectus.

History and Business Overview

         In early 1999, the Company plans to commence marketing of new variable
insurance products.  The Company was acquired by Sage Insurance Group on
December 31, 1996, and since that date has been preparing for the
recommencement of insurance underwriting and marketing activities.  (Prior to
the acquisition of the Company, all new business production and marketing
ceased in October 1996.)  There has been a total reengineering of the Company's
products, systems and administration since the change of ownership.  All of the
Company's current senior management are experienced in the insurance industry
(either in the United States or in South Africa) and most have been recruited
since January 1997.  The ongoing business strategy of the Company is to focus
its activities on the development, underwriting, and marketing of variable
insurance products. The Company's obligations under these contracts are (1)
variable accounts -- determined by the value of investments held in separate
accounts, and (2) fixed accounts -- backed by investments held in separate
accounts.  Assets of these separate accounts that equal the reserves and other
liabilities supporting the contracts to which they relate, may not be used to
pay any other obligations or creditors of the Company.  The Contracts initially
will be distributed through banks.  The Company currently anticipates that,
over the long-term, its distribution channels will expand to include
wirehouses, regional broker-dealers and financial planners.

Results of Operations

        Net losses for the ten months ended October 31, 1998 were $332,442 and
were $351,786





                                       51
<PAGE>   73

for the year ended December 31, 1997.  As the Company is not currently
underwriting or marketing insurance products, all revenue for 1998 and 1997 is
derived from investing activities. Effective investment yields for the
Company's General Account were 5.3% for the ten months ended October 31, 1998,
and 5.4% for the year ended December 31, 1997.  General expenses incurred in
financing of the Company's daily activities more than offset investment
revenue.  As the Company commences business in 1999, management anticipates
that revenues will increase primarily by charges and fees associated with
products being offered, while expenses will increase by acquisition expenses,
the cost of administering this new business and the payment of benefits.

         The Company has capitalized certain costs that have been incurred in
the development and registration of the Company's insurance products and have
been paid for by Sage Insurance Group.  These development costs are being
amortized on a straight line basis over fifteen years.  Accumulated
amortization at October 31, 1998 and December 31, 1997 was $234,474 and
$93,637, respectively.

         In April 1998, Statement of Position 98-5, "Reporting on the Costs of
Start-Up Activities" (SOP 98-5) was issued.  SOP 98-5 requires entities to
charge to expense all start-up costs as incurred.  SOP 98-5 is effective for
years beginning after December 15, 1998 (i.e., January 1, 1999).  In addition,
SOP 98-5 requires entities upon adoption to write-off as the cumulative effect
of a change in accounting principle any previously unamortized capitalized
start-up costs.  Accordingly, the Company will be required to write-off any
unamortized capitalized development costs on January 1, 1999.

Liquidity and Capital Resources

         Since the beginning of 1997, the Company's primary cash needs have
been for the development of its insurance products and related infrastructure
and to fund the daily operations of the Company.  The Company's cash needs have
been met through interest income and capital contributions from Sage Insurance
Group.

         During 1999, the Company expects its cash needs will continue to
increase as its underwriting and marketing activities begin. The Company
anticipates that it will be unable to meet all of its liquidity requirements in
1999 without capital contributions from Sage Insurance Group.  However, as
discussed above, Swiss Re has made an equity investment in a newly formed
holding company, Sage Life Holdings, that will provide an additional source of
funds to the Company for new business expenses.  In addition, although not
required to do so, the Company believes that Sage Insurance Group will continue
to provide capital to the Company for its non-recurring costs associated with
new products and business development during 1999.  The Company's future
marketing efforts could be hampered in the unlikely event that Swiss Re, Sage
Insurance Group and/or their affiliates are unwilling to commit additional
funding.





                                       52
<PAGE>   74
Segment Information

         The Company currently plans to conduct its business as a single
segment and anticipates that this segment will eventually include all of the 
following products:

         -       Combination fixed and variable deferred annuities.
         -       Combination fixed and variable immediate annuities.
         -       Combination fixed and variable life insurance products.

Reinsurance

         The Company intends to enter into a coinsurance reinsurance
arrangement with Swiss Re, pursuant to which Swiss Re will reinsure a
significant portion of the Company's liabilities under its variable insurance
contracts.  This arrangement will provide additional capacity for growth of the
Company's variable insurance business.

         In addition, the Company intends to reinsure certain mortality risks
associated with the guaranteed minimum death benefit and accidental death
benefit features of the Contracts.  The Company intends to use only highly
rated reinsurance companies to reinsure these risks.

         Reinsurance does not relieve the Company from its obligations to
Contract Owners.  The Company remains primarily liable to its Contract Owners
to the extent that any reinsurer does not meet its obligations under the
reinsurance agreements.

Reserves

         In accordance with the insurance laws and regulations under which it
operates, the Company is obligated to carry on its books, as liabilities,
actuarially determined reserves to meet its obligations on outstanding
contracts. Reserves involving life contingencies are based on mortality tables
in general use in the United States and, where applicable, are computed to
equal amounts which, together with interest on such reserves computed annually
at certain assumed rates, will be sufficient to meet the Company's Contract
obligations at their maturities, or the event of the Contract Owner's death. In
the financial statements included in this Prospectus, all reserves have been
determined in accordance with generally accepted accounting principles.  As
previously noted, all of Fidelity Life's existing annuity business has been
irrevocably transferred to Security First, resulting in no remaining contract
obligations at October 31, 1998.

Investments

         The Company's General Account cash and invested assets of $25.6
million and $25.3 million at October 31, 1998 and December 31, 1997,
respectively, were invested entirely in investment grade securities and money
market funds.  It is the stated policy of the Company to





                                       53
<PAGE>   75
refrain from investing in securities having speculative characteristics.  The
Company's entire portfolio is classified as available-for-sale, and is reported
at fair value, with resulting unrealized gains or losses included as a separate
component of stockholder's equity.

Dividend Restrictions

         The Company is subject to state regulatory restrictions that limit the
maximum amount of dividends payable.  Subject to certain net income
carryforward provisions as described below, the Company must obtain approval of
the Insurance Commissioner of the State of Delaware in order to pay, in any
12-month period, "extraordinary" dividends which are defined as those in excess
of the greater of 10% of surplus as regards Contract Owners as of the prior
year-end and statutory net income less realized capital gains for such prior
year.  Dividends may be paid by the Company only out of earned surplus.  In
addition, the Company must provide notice to the Insurance Commissioner of the
State of Delaware of all dividends and other distributions to shareholders
within five business days after declaration and at least ten days prior to
payment.  At December 31, 1997, the maximum amount of dividends the Company
could have paid its parent without prior approval from state regulatory
authorities was $2,501,775.

New Accounting Standards

         As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130),
which establishes new rules for the reporting and display of comprehensive
income and its components, consisting of net income and other comprehensive
income.  The accumulated balance of other comprehensive income is required to
be reported separately in stockholder's equity.  The Company's only component
of other comprehensive income is net unrealized gains or losses on
available-for-sale securities, which is reported separately in stockholder's
equity.  The adoption of SFAS 130 had no impact on the Company's net income or
stockholder's equity.

         In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" (SFAS 131).  SFAS 131
establishes standards for the reporting of operating segment information in
both annual financial reports and interim financial reports issued to
shareholders.  Operating segments are components of an entity for which
separate financial information is available and is evaluated regularly by the
entity's chief operating management.  SFAS is effective for fiscal year 1998
and is not anticipated to have a material impact on the Company.

COMPETITION

         The Company is engaged in a business that is highly competitive due to
the large number of stock and mutual life insurance companies as well as other
entities marketing insurance





                                       54
<PAGE>   76

products comparable to those being offered by the Company.  There are
approximately 1,600 stock, mutual, and other types of insurers in the life
insurance business in the United States, a substantial number of which are
significantly larger than the Company.  The Company is unique in that it is one
of the few life insurers that confines its activities to the marketing of
separate account variable insurance products.

TRANSACTIONS WITH SAGE INSURANCE GROUP

         In 1997, the Company entered into a Cost Sharing Agreement with Sage
Insurance Group to share personnel costs, office rent and equipment costs.
These costs are allocated between the companies based upon the estimated time
worked, square footage of space utilized and upon monitored usage of the
equipment, respectively.  Pursuant to this agreement, the Company has received
$109,923 from Sage Insurance Group for the ten months ended October 31, 1998
and paid expenses of $76,048 for the year ended December 31, 1997.  In
addition, Sage Insurance Group provides funds to the Company to meet various
operating expenses.  These amounts are paid back to Sage Insurance Group at the
end of each quarter.

         Sage Insurance Group has also incurred expenditures in connection with
the costs of establishing new systems, new products, and premises for the
Company.  The amount of these developmental costs paid for by companies
affiliated with Sage Life on October 31, 1998 and December 31, 1997 were
$2,749,628 and $1,504,558, respectively.  Sage Insurance Group regards these
expenditures as being of a developmental nature and does not intend to recover
these expenditures from the Company.  Accordingly, these expenditures have been
capitalized as development costs and reflected as contributed capital in the
Company's financial statements.

EMPLOYEES

         Due to the Company's business strategy of outsourcing its primary
administrative and investment functions to organizations that specialize in
these areas, the number of full time personnel employed by the Company will be
limited.  As of October 31, 1998, the Company had 14 employees.  As of December
31, 1997, the Company had 8 employees.

PROPERTIES

         The Company's executive office is located at 300 Atlantic Street, in
Stamford, Connecticut, where the Company's primary records are maintained.
Customer records, however, are maintained at the Company's Customer Service
Center.

         Sage Insurance Group leases the Company's office space.  The Company
reimburses Sage Insurance Group for the office space under the Cost Agreement
described above.







                                       55
<PAGE>   77
STATE REGULATION

         The Company is subject to the laws of the State of Delaware governing
insurance companies and to the regulations of the Delaware Department of
Insurance (the "Insurance Department").  A detailed financial statement in the
prescribed form (the "Statement") is filed with the Insurance Department each
year covering the Company's operations for the preceding year and its financial
condition as of the end of that year.  Regulation by the Insurance Department
means that the Insurance Department may examine the Company and its books and
records to determine, among other things, whether contract liabilities and
reserves as stated by the Company are correct.  A full examination of the
Company's operations will be conducted periodically by the Insurance Department
under the auspices of the NAIC.

         In addition, the Company is subject to regulation under the insurance
laws of all jurisdictions in which it operates.  The laws of the various
jurisdictions establish supervisory agencies with broad administrative powers
with respect to various matters, including licensing to transact business,
overseeing trade practices, licensing agents, approving contract forms,
establishing reserve requirements, fixing maximum interest rates on life
insurance contract loans and minimum rates for accumulation of surrender
values, prescribing the form and content of required financial statements and
regulating the type and amounts of investments permitted.  The Company is
required to file the Statement with supervisory agencies in each of the
jurisdictions in which it does business, and its operations and accounts are
subject to examination by these agencies at regular intervals.

         The NAIC has adopted several regulatory initiatives designed to
improve the surveillance and financial analysis regarding the solvency of
insurance companies in general.  These initiatives include the development and
implementation of a risk-based capital formula for determining adequate levels
of capital and surplus.  Insurance companies are required to calculate their
risk-based capital in accordance with this formula and to include the results
in their Statement. It is anticipated that these standards will have no
significant effect upon the Company.

         Further, many states regulate affiliated groups of insurers, such as
the Company and its affiliates, under insurance holding company legislation.
Under such laws, inter-company transfers of assets and dividend payments from
insurance subsidiaries may be subject to prior notice or approval, depending on
the size of the transfers and payments in relation to the financial positions
of the companies involved.

         Under insurance guaranty fund laws in most states, insurers doing
business therein can be assessed (up to prescribed limits) for contract owner
losses incurred when other insurance companies have become insolvent.  Most of
these laws provide that an assessment may be excused or deferred if it would
threaten an insurer's own financial strength.

         Although the federal government ordinarily does not directly regulate
the business of insurance, federal initiatives often have an impact on the
business in a variety of ways.  The





                                       56
<PAGE>   78

insurance products of the Company are subject to various federal securities
laws and regulations.  In addition, current and proposed federal measures that
may significantly affect the insurance business include regulation of insurance
company solvency, employee benefit regulation, removal of barriers preventing
banks from engaging in the insurance business, tax law changes affecting the
taxation of insurance companies, and the tax treatment of insurance products
and its impact on the relative desirability of various personal investment
vehicles.

                        DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
                            Position held with the           Other Principal Positions
Name (Age)                  Company/Year Commenced           During Past Five Years
- ----------                  ----------------------           ----------------------
<S>                         <C>                              <C>
Ronald S. Scowby(1)         Director, 1/97 to present,       Trustee, Sage Life Investment
Age 60                      Chairman, 2/98 to present        Trust, 7/98 to present;
                                                             Director, Sage Life Assurance
                                                             Company of New York, 5/98 to
                                                             present; Vice Chairman 2/98 to
                                                             present, President, 1/97 to
                                                             2/98, Director, 1/97 to present,
                                                             Sage Insurance Group Inc.;
                                                             Director, Sage Advisors, Inc.,
                                                             1/98 to present;  President,
                                                             Chief Executive Officer, Sage
                                                             Life Assurance of America Inc.,
                                                             1/97-2/98; Director, Sage
                                                             Distributors, Inc., 1/98 to
                                                             present; Director, President,
                                                             Chief Executive Officer, Sage
                                                             Management Services (USA),
                                                             Inc., 6/96 to present; Owner,
                                                             Sheldon Scowby Resources
                                                             7/95-6/96; Executive Vice
                                                             President, Mutual of America
                                                             Life Insurance Group, 6/91-
                                                             7/95; President, Mutual of
                                                             America Financial Services,
                                                             6/91-7/95

Robin I. Marsden(1)         Director, 1/97 to                Trustee, Sage Life Investment
Age 33                      present, President and Chief     Trust, 7/98 to present;
                            Executive Officer, 2/98 to       Director, Sage Life Assurance
                            present                          Company of New York, 5/98 to
                                                             present; Director, President,
                                                             Sage Advisors, Inc., 1/98 to
                                                             present; Director, Sage
                                                             Distributors, Inc., 1/98 to
</TABLE>

                                       57
<PAGE>   79
<TABLE>
<S>                         <C>                              <C>
                                                             present; Director, 1/97 to
                                                             present, President and Chief
                                                             Executive Officer, 2/98 to
                                                             present, Sage Insurance Group,
                                                             Inc.; Investments Director,
                                                             Sage Life Holdings, Ltd., 11/94
                                                             to 1/98; Executive-
                                                             Strategic Developments, Sage
                                                             Group Ltd., 11/94 to 1/98;
                                                             Partner and Management
                                                             Consultant Deloitte & Touche
                                                             1/89-10/94

H. Louis Shill(2)           Director,                        Director, Sage Life Assurance
Age 68                      1/97 to present                  Company of New York, 5/98 to
                                                             present; Chairman, Sage Life
                                                             Assurance of America, Inc.
                                                             1/97 to 2/98; Chairman, Sage
                                                             Insurance Group, Inc., 1/97 to
                                                             present; Founder, Chairman,
                                                             Sage Group Limited, 1965 to
                                                             present

Paul C. Meyer(3)            Director,                        Director, Sage Life Assurance
Age 45                      1/97 to present                  Company of New York 5/98 to
                                                             present; Partner, Rogers &
                                                             Wells, 1986 to present

Richard D. Starr(4)         Director,                        Director, Sage Life Assurance
Age 54                      1/97 to present                  Company of New York, 5/98 to
                                                             present; President, First
                                                             Interstate Securities, 1/95-
                                                             12/95; Chairman & Chief
                                                             Executive Officer, Financial
                                                             Institutions Group, Inc., 10/78
                                                             to present

Mitchell R. Katcher(1)      Director, 12/97 to               Vice President, Sage Life
Age 45                      present, Senior                  Investment Trust, 7/98 to
                            Executive Vice                   present; Director, Sage Life
                            President, Chief                 Assurance Company of New
                            Financial Officer,               York, 5/98 to present; Director,
                            Chief Actuary                    Treasurer, Sage Advisors, Inc.,
                            5/97 to present                  1/98 to present; Director, Sage
                                                             Distributors, Inc., 1/98 to
                                                             present; Treasurer, 7/97 to
                                                             present, Senior Executive Vice
                                                             President, 12/97 to present,
                                                             Sage Insurance Group, Inc.;
</TABLE>                                   

                                       58
<PAGE>   80
<TABLE>
<S>                                                          <C>
                                                             Executive Vice President,
                                                             Golden American Life
                                                             Insurance Company, 7/93-2/97.
</TABLE>

(1)   The principal business address of these persons is 300 Atlantic Street,
      Stamford, CT 06901.
(2)   Mr. Shill's principal business address is Sage Centre, 10 Fraser Street,
      Johannesburg, South Africa 2000.
(3)   Mr. Meyer's principal business address is 200 Park Avenue, New York, N.Y.
      10166.
(4)   Mr. Starr's principal business address is 22507 SE 47th Place, Issaquah,
      WA 98029.

COMPENSATION

         Executive officers of the Company also serve as officers of its parent
and of certain affiliated companies.  Cost allocations to the Company have been
made as to certain individual's time devoted to their duties with the Company.
No allocation was made during 1997 nor will any be made for 1998 for the
services of Mr. Shill. No allocation was made during 1997 for the services of
Mr. Marsden.

         The following table includes compensation paid by Sage Life for
services rendered in all capacities for the years indicated for the Chief
Executive Officer and the other Executive Officers compensated more than
$100,000 for the year ended December 31, 1997.

<TABLE>
<CAPTION>
                                              Annual Compensation
                                                                     All Other
   Name and Principal Position     Year  Salary    Bonus(1)      Compensation(2)
   ---------------------------     ----  ------    -----         ------------
<S>                                <C>   <C>       <C>                   <C>
Ronald S. Scowby,                  1997  $337,500  $100,000              $0
President and Chief 
Executive Officer(3)

Mitchell R. Katcher,               1997  $114,583  $265,000              $0
Senior Executive
Vice President, 
Chief Financial
Officer and Chief Actuary
</TABLE>

(1) The amount shown relates to bonuses paid in 1998 for services rendered in
    1997.

(2) The amount shown relates to deferred compensation earned in 1997.

(3) Mr. Scowby's salary and bonus are paid by Sage Management Services (USA),
    Inc.

        Outside directors of the Company are paid $12,000 and $2,000 per meeting
   attended.  For


                                       59
<PAGE>   81
the year ended December 31, 1997, the outside directors each were paid $20,000.
Directors who are officers or employees of the Company or its affiliates are
not compensated for serving on the Board.  Directors do not receive retirement
benefits.





                                         60
<PAGE>   82
                         Report of Independent Auditors


Board of Directors
Sage Life Assurance of America, Inc.

We have audited the accompanying balance sheet of Sage Life Assurance of
America, Inc. (formerly Fidelity Standard Life Insurance Company) as of
December 31, 1997, and the related statements of operations, stockholder's
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 audit provides 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 Sage Life Assurance of
America, Inc. as of December 31, 1997, and the results of its operations and
its cash flows for the year then ended, in conformity with generally accepted
accounting principles.





Stamford, Connecticut
April 22, 1998



                                                   /s/Ernst & Young LLP





                                       61
<PAGE>   83
                      Sage Life Assurance of America, Inc.

                                 Balance Sheets


<TABLE>
<CAPTION>
                                                                     OCTOBER 31, 1998
                                                                        (unaudited)                    DECEMBER 31, 1997
                                                                   ---------------------               -----------------
 <S>                                                                 <C>                                  <C>
 ASSETS
 Investments:
   Fixed maturities available for sale, at fair value                    $3,604,066                        $ 3,595,326
   Short-term investments                                                 2,579,083                         21,530,888
                                                                       ------------                         ----------
 Total investments                                                        6,183,149                         25,126,214

 Cash and cash equivalents                                               19,422,092                            228,605
 Accrued investment income                                                  130,929                             58,039
 Receivable from affiliates                                                  48,769                             25,941
 Reinsurance recoverable                                                          -                          2,728,284
 Other assets                                                                 5,000                             11,443
 Goodwill                                                                 6,606,236                          6,802,300
 Development costs                                                        3,919,711                          1,310,921
 Separate account assets                                                          -                            396,992
                                                                        -----------                        -----------
 Total assets                                                           $36,315,886                        $36,688,739
                                                                        ===========                        ===========

 LIABILITIES AND STOCKHOLDER'S EQUITY
 Liabilities:
   Accrued expenses                                                     $     2,005                        $   180,442
   Policy liabilities                                                             -                          2,728,284
   Deferred income taxes                                                     36,220                             26,227
   Amounts payable to affiliates                                             36,454                            154,366
   Separate account liabilities                                                   -                            396,992
                                                                        -----------                          ---------
 Total liabilities                                                           74,679                          3,486,311

 Stockholder's equity:
   Common stock, $2,500 par value, 1,000 shares
       Authorized, issued and outstanding                                 2,500,000                          2,500,000
   Additional paid-in capital                                            34,355,127                         31,005,508
   Unrealized gains on investment                                            70,308                             48,706
   Retained deficit                                                       (684,228)                          (351,786)
                                                                          ---------                      -------------
                                                                         36,241,207                         33,202,428
                                                                         ----------                      -------------

                                                                        $36,315,886                       $ 36,688,739
                                                                        ===========                       ============
</TABLE>

See accompanying notes to financial statements.





                                       62
<PAGE>   84
                      Sage Life Assurance of America, Inc.

                            Statements of Operations



<TABLE>
<CAPTION>
                                                                             TEN MONTHS ENDED
                                                                             OCTOBER 31, 1998                  YEAR ENDED
                                                                                (unaudited)                 DECEMBER 31, 1997
                                                                           -------------------              -----------------
  <S>                                                                           <C>                           <C>
  REVENUES
  Investment income                                                             $  1,075,251                  $    989,494

  EXPENSES
  Amortization expense                                                               336,901                       325,406
  General and administrative expenses                                              1,070,792                     1,015,874
                                                                                   ---------                     ---------
     Total expenses                                                                1,407,693                     1,341,280
                                                                                   ---------                     ---------

  Loss before taxes                                                                (332,442)                     (351,786)

  Income tax expense                                                                      -                             -
                                                                               -------------                --------------


  Net loss                                                                      $  (332,442)                   $ (351,786)
                                                                                ============                   ===========
</TABLE>


See accompanying notes to financial statements.





                                       63
<PAGE>   85
                      Sage Life Assurance of America, Inc.

                       Statements of Stockholder's Equity



<TABLE>
<CAPTION>
                                                                       TEN MONTHS ENDED
                                                                       OCTOBER 31, 1998                YEAR ENDED
                                                                          (unaudited)               DECEMBER 31, 1997
                                                                      -------------------           -----------------
  <S>                                                                    <C>                          <C>
  Common stock; balance at beginning and end of year:                    $  2,500,000                 $  2,500,000

  Additional paid-in capital:
     Balance at beginning of year                                          31,005,508                   15,505,558
     Additional capital contributions                                       3,349,619                   15,500,000
                                                                         ------------                   ----------
     Balance at end of year                                                34,355,127                   31,005,508

  Unrealized investment gains:
     Balance at beginning of year                                              48,706                            -

     Change in unrealized gain                                                 21,602                       48,706
                                                                               ------                       ------
     Balance at end of year                                                    70,308                       48,706

  Retained earnings:
     Balance at beginning of year                                           (351,786)                            -
     Net loss                                                               (332,442)                    (351,786)
                                                                            ---------                    ---------
     Balance at end of year                                                 (684,228)                    (351,786)
                                                                            ---------                    ---------

  Total stockholder's equity                                              $36,241,207                  $33,202,428
                                                                          ===========                  ===========
</TABLE>


 See accompanying notes to financial statements.





                                       64
<PAGE>   86
                      Sage Life Assurance of America, Inc.

                            Statements of Cash Flows



<TABLE>
<CAPTION>
                                                                            TEN MONTHS ENDED
                                                                            OCTOBER 31, 1998                   YEAR ENDED
                                                                               (unaudited)                  DECEMBER 31, 1997
                                                                           -------------------              -----------------
   <S>                                                                      <C>                                <C>
   OPERATING ACTIVITIES
   Net loss                                                                 $       (332,442)                  $  (351,786)
   Adjustments to reconcile net loss to net cash (used in) provided
   by operating activities:
        Amortization expense                                                          336,901                      325,406
        Changes in:
           Accrued investment income                                                 (72,890)                     (29,638)
           Receivable from affiliates                                                (22,828)                     (25,941)
           Other assets                                                                 6,443                     (11,443)
           Accrued expenses                                                         (178,437)                      116,216
           Amounts payable to affiliates                                            (117,912)                      154,366
                                                                                    ---------                      -------
   Net cash (used in) provided by operating activities                              (381,165)                      177,180

   INVESTING ACTIVITIES
     Proceeds from sales, maturities and repayments of                                      -                       42,941
       fixed maturity securities
     Net sales [purchases] of short-term investments                               18,974,652                 (15,507,987)
                                                                                   ----------                 ------------
   Net cash provided by (used in) investing activities                             18,974,652                 (15,465,046)

   FINANCING ACTIVITIES
      Capital contribution from the parent                                            600,000                   15,500,000
                                                                                      -------                   ----------
   Net cash provided by financing activities                                          600,000                   15,500,000
                                                                                      -------                   ----------

   Increase in cash and cash equivalents                                           19,193,487                      212,134

   Cash and cash equivalents at beginning of period                                   228,605                       16,471
                                                                                      -------                       ------

   Cash and cash equivalents at end of period                               $      19,422,092                  $   228,605
                                                                            =================                  ===========
</TABLE>

See accompanying notes to financial statements.





                                       65
<PAGE>   87
                      Sage Life Assurance of America, Inc.

                         Notes to Financial Statements


1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND OPERATION

Sage Life Assurance of America, Inc. (the "Company") is a wholly-owned
indirect subsidiary of Sage Insurance Group, Inc., ("SIGI") which is a
wholly-owned indirect subsidiary of Sage Group Limited, a South African
company.

DESCRIPTION OF BUSINESS

Effective December 31, 1996, SIGI purchased from Security First Life Insurance
Company (SFLIC) all of the outstanding stock of Fidelity Standard Life
Insurance Company (Fidelity Standard), a Delaware domiciled life insurance
company licensed to sell fixed and variable annuity contracts.  As a result of
the purchase, Fidelity Standard was renamed Sage Life Assurance of America,
Inc.  Effective October 31, 1996, Fidelity Standard entered into a modified
coinsurance arrangement to cede all of its separate account liabilities to its
then parent, SFLIC.  Assets equal to the total reserves and related liabilities
were transferred to SFLIC. The remaining general account liabilities were ceded
under a 100% coinsurance arrangement with SFLIC.  In connection with the
purchase of Fidelity Standard, the Company entered into a service agreement
with SFLIC to provide all necessary administrative services for all ceded
business.

The Company is in the process of developing and preparing to market variable
annuity and variable life insurance products.  The marketing of these products
is expected to begin in the first quarter 1999. Sage Distributors Inc.
(formerly Finplan of America, Inc.), an affiliated broker/dealer, will
distribute the variable products as principal underwriter. (Selling agreements
will be entered into with other broker/dealers that will sell the variable
insurance products). Sage Advisors, Inc., an affiliate, will provide investment
management services to registered investment companies (mutual funds).  These
mutual funds are in the process of being developed.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles.  The information presented herein
with respect to the period as of and for the ten months ended October 31, 1998,
is unaudited.

NEW ACCOUNTING PRONOUNCEMENT

As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), which
establishes new rules for the reporting and display of comprehensive income and
its components, consisting of net income and other comprehensive income.  The
accumulated balance of other comprehensive income is required to be reported
separately in stockholder's equity.  The Company's only component of other
comprehensive income is net unrealized gains or losses on available-for-sale
securities, which is reported separately in stockholder's equity.  The adoption
of SFAS 130 had no impact on the Company's net income or stockholder's equity.







                                       66
<PAGE>   88
                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)

 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 In June 1997, the Financial Accounting Standards Board issued Statement of
 Financial Accounting Standards No. 131, "Disclosures about Segments of an
 Enterprise and Related Information" (SFAS 131).  SFAS 131 establishes standards
 for the reporting of operating segment information in both annual financial
 reports and interim financial reports issued to shareholders.  Operating
 segments are components of an entity for which separate financial information
 is available and is evaluated regularly by the entity's chief operating
 management.  SFAS 131 is effective for fiscal year 1998 and is not anticipated
 to have a material impact on the Company.

 INVESTMENTS

 The Company has classified all of its fixed maturity investments as
 available-for-sale.  Those investments are carried at fair value and changes in
 unrealized gains and losses are reported as a component of stockholder's
 equity, net of applicable deferred income taxes.  Fair values are determined by
 quoted market prices.

 Short-term investments are carried at cost, which approximates fair value.

 Realized gains and losses on disposal of investments are determined by the
 specific identification method and are included in revenues.

 CASH AND CASH EQUIVALENTS

 The Company considers all highly liquid investments purchased with a maturity
 of three months or less from the date of purchase to be cash equivalents.  Cash
 and cash equivalents are carried at cost, which approximates fair value.

 SEPARATE ACCOUNTS

 The separate account assets and liabilities reported in the accompanying
 balance sheet represent funds that are separately administered, principally for
 the benefit of certain policyholders who bear the investment risk.  The
 separate account assets and liabilities are carried at fair value. Revenues and
 expenses related to the separate account assets and liabilities, to the extent
 of benefits paid or provided to the separate account policyholders, are
 excluded from the amounts reported in the accompanying statement of operations.

 POLICY LIABILITIES

 Policy liabilities consist of deposits received plus credited interest, less
 accumulated policyholder charges, assessments, and withdrawals related to
 annuities of a nonguaranteed return nature.  Interest crediting rates ranged
 from 5.5% to 7.0%.






                                       67
<PAGE>   89
                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)

1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOODWILL

Goodwill represents the excess of the fair value of assets exchanged over the
net assets acquired. Goodwill is being amortized on a straight-line basis over
thirty years.  The carrying value of goodwill is regularly reviewed for
indications of impairment in value, which, in the view of management, is other
than temporary.  Accumulated amortization at October 31, 1998 and December 31,
1997 was $427,833 and $231,769, respectively.

DEVELOPMENT COSTS

The Company has capitalized certain costs that have been incurred in the
development and registration of the Company's insurance products.  These
development costs are being amortized on a straight line basis over fifteen
years.  Accumulated amortization at October 31, 1998 and December 31, 1997 was
$234,474 and $93,637, respectively.

In April 1998, Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP 98-5), was issued.  SOP 98-5 requires entities to charge to
expense all start-up costs as incurred. SOP 98-5 is effective for years
beginning after December 15, 1998 (i.e., January 1, 1999).  In addition, SOP
98-5 requires entities upon adoption to write-off as the cumulative effect of a
change in accounting principle any previously unamortized capitalized start-up
costs. Accordingly, the Company will be required to write-off any unamortized
capitalized development costs on January 1, 1999.

ESTIMATES

The preparation of financial statements in accordance with generally accepted
accounting principles requires that management makes estimates and assumptions
that affect the reported amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those estimates.

INCOME TAXES

Income taxes are accounted for using the liability method.  Using this method,
deferred tax assets and liabilities are determined based on differences between
the financial reporting and tax basis of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.





                                       68
<PAGE>   90
                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)


 2. INVESTMENTS

Investments in fixed maturity securities as of October 31, 1998 consist of the
following:

<TABLE>
<CAPTION>
                                      GROSS           GROSS   
                   AMORTIZED       UNREALIZED      UNREALIZED     FAIR
                     COSTS            GAINS           LOSSES      VALUE
                   --------------------------------------------------------
<S>                <C>                <C>             <C>       <C>
U.S. Government                                               
   Obligations      $ 3,497,538        $106,528         -        $3,604,066
                   ========================================================
</TABLE>

Investments in fixed maturity securities as of December 31, 1997 consisted of
the following:


<TABLE>
<CAPTION>
                                     GROSS        GROSS     
                    AMORTIZED     UNREALIZED   UNREALIZED      FAIR
                      COSTS          GAINS       LOSSES        VALUE
                    ---------------------------------------------------
<S>                 <C>             <C>           <C>        <C>
U.S. Government                                             
   Obligations      $3,520,393      $79,120       $4,187     $3,595,326
                    ===================================================
</TABLE>

The amortized cost and fair value of fixed maturity securities by contractual
maturity at October 31, 1998 and December 31, 1997 are summarized below.
Actual maturities will differ from contractual maturities because certain
borrowers have the right to call or prepay obligations.

<TABLE>
<CAPTION>
 October 31, 1998                              AMORTIZED          FAIR
                                                 COST             VALUE
 <S>                                          <C>              <C>
 Due in one year or less                      $  815,082       $  816,019
 Due after five years through ten years        2,682,456        2,788,047
                                               ---------        ---------
 Total                                        $3,497,538       $3,604,066
                                              ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
December 31, 1997                            AMORTIZED          FAIR
                                               COST             VALUE
<S>                                         <C>              <C>
Due in one year or less                     $  815,495       $  811,308
Due after five years through ten years       2,704,898        2,784,018
                                             ---------        ---------
Total                                       $3,520,393       $3,595,326
                                            ==========       ==========
</TABLE>





                                       69
<PAGE>   91
                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)


Investment income by major category of investment for October 31, 1998 and
December 31, 1997 is summarized as follows:

<TABLE>
<CAPTION>
                                 TEN MONTHS
                                   ENDED              YEAR ENDED
                              OCTOBER 31, 1998     DECEMBER 31, 1997
                              ----------------     -----------------
<S>                                 <C>                    <C>
Bonds                                 $193,303              $255,778
                             
Short-term investments                 823,179               720,556
                             
Cash and cash equivalents               71,892                49,035
                                        ------                ------
Total investment income              1,088,374             1,025,369
                             
Investment expenses                     13,123                35,875
                                        ------                ------
Net investment income               $1,075,251              $989,494
                                    ==========              ========
</TABLE>

At October 31, 1998 and December 31, 1997, investment securities with an
amortized cost value of $6,076,620 and $6,128,048 and a fair value of
$6,184,066 and $6,202,980, respectively, are held by trustees in various
amounts in accordance with the statutory requirements of certain states in
which the Company is licensed to conduct business.

3. INCOME TAXES

The Company has filed a separate life insurance company Federal income tax
return for the period January 1, 1997 through December 31,  1997.  The Company
will continue to file a separate life insurance company Federal income tax
return through the year 2001. Beginning in the year 2002, the Company will be
included in the consolidated Federal income tax return of Sage Holdings (USA),
Inc. and its subsidiaries.

The provision for income taxes varies from the amount that would be computed
using the federal statutory income tax rate as follows:

<TABLE>
<CAPTION>
                                    OCTOBER 31, 1998       DECEMBER 31, 1997
                                    ----------------       -----------------
<S>                                     <C>                     <C>
Pre-tax loss                             $ (332,442)             $ (351,786)
Application of the federal         
  statutory tax rate - 34%                 (113,030)               (119,607)
Tax effect of:                     
  State income taxes                          -                         (75)
  Change in valuation allowance              113,030                 119,532
                                             -------                 -------
Total income tax provision               $         -              $        -
                                         ===========              ==========
</TABLE>

                                       70

<PAGE>   92

                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)

      Significant components of the Company's deferred tax assets and
liabilities as of October 31, 1998 and December 31, 1997 are as follows:

<TABLE>
<CAPTION>
                                       OCTOBER 31, 1998   DECEMBER 31, 1997
                                       ----------------   -----------------
<S>                                    <C>                <C>
Deferred tax assets:                                      
  Net operating loss carryforwards          $ 1,844,098           $ 756,521
                                       ----------------   -----------------
Total deferred tax assets                  $  1,844,098           $ 756,521
Deferred tax liabilities:                                 
  Unrealized gain on appreciation of                      
     investments                               (36,220)            (26,227)
  Amortization of goodwill and                            
     development costs                      (1,611,536)           (636,989)
                                       ----------------   -----------------
Total deferred tax liabilities              (1,647,756)           (663,216)
Valuation allowance for deferred      
   tax assets                                 (232,562)           (119,532)
                                       ----------------   -----------------
Net deferred tax liability                     (36,220)            (26,227)
                                       ================   =================
</TABLE>

Based upon the lack of historical operating results and the uncertainty of
operating earnings in the  future, management has determined that it is not
more likely than not that the deferred tax assets will be fully recognized.
Accordingly, a valuation allowance has been recorded.

At October 31, 1998, the Company has net operating loss carryforwards of $3.2
million for federal income tax purposes that expire in 2013 and $2.2 million
that expire in the year 2012.

4. REINSURANCE AND OTHER AGREEMENTS

Effective September 1, 1998, all of the in-force business of the Company was
novated to SFLIC, a subsidiary of the Metropolitan Life Insurance Company.

5. RETAINED EARNINGS AND DIVIDEND RESTRICTIONS

Statutory-basis capital and surplus and net income are $25,017,752 and $51,133
at and for the year ended December 31, 1997, respectively.  The required
statutory capital and surplus at December 31, 1997 is $17,257,518.

The Company is subject to state regulatory restrictions that limit the maximum
amount of dividends payable.  Subject to certain net income carryforward
provisions as described below, the Company must obtain approval of the
Insurance Commissioner of the State of Delaware in order to pay, in any
12-month period, "extraordinary" dividends which are defined as those in
excess of the greater of 10% of surplus as regards policyholders as of the
prior year-end and statutory net income less realized capital gains for such
prior year. Dividends may be paid by the Company only out of earned surplus. In
addition, the Company must provide notice to the Insurance Commissioner of the
State of Delaware of all dividends and other distributions to shareholders
within five business days after declaration and at least ten days prior to
payment.  At December 31, 1997, the maximum amount of dividends the Company
could pay SIGI without prior approval from state regulatory authorities is
$2,501,775.

                                       71

<PAGE>   93

                      Sage Life Assurance of America, Inc.

                   Notes to Financial Statements (continued)

6. RELATED PARTY TRANSACTIONS

In 1997, the Company entered into a Cost Sharing Agreement with SIGI to share
the personnel costs, office rent and equipment costs.  These costs are
allocated between the companies based upon the estimated time worked, square
footage of space utilized and upon monitored usage of the equipment,
respectively.  Pursuant to this agreement, the Company has recorded income of
$109,923 from SIGI for the ten months ended October 31, 1998 and expenses of
$76,048 for the year ended December 31, 1997.  In addition, SIGI provides funds
to the Company to meet various operating expenses.  These amounts are paid back
to SIGI at the end of each quarter. At October 31, 1998 and December 31, 1997,
$12,315 and $100,000 of the amounts transferred to the Company remained payable
to SIGI, respectively.

All non-recurring development costs of the Company are paid by SIGI or its
parent, Sage Group Limited, and treated as capital contributions.  The amount
of development costs paid for by affiliated companies at October 31, 1998 and
December 31, 1997 were $2,749,628 and $1,504,558, respectively.

                                       72

<PAGE>   94

                            Table of Contents of the
                      Statement of Additional Information

     Additional information about the Contracts and The Sage Variable Annuity
Account A is contained in the Statement of Additional Information. You can
obtain a free copy of the Statement of Additional Information by writing to us
at the address shown on the front cover or by calling (877) 835-7243 (Toll
Free). The following is the Table of Contents for the Statement of Additional
Information.

                      Statement of Additional Information
                               Table of Contents


                                                             Page
                                                             ----

Participation  . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficiary Designation. . . . . . . . . . . . . . . . . . . . .
Calculation of Historical Performance Data . . . . . . . . . . .
   Money Market Sub-Account Yields . . . . . . . . . . . . . . .
   Other Sub-Account Yields  . . . . . . . . . . . . . . . . . .
   Average Annual Total Returns. . . . . . . . . . . . . . . . .
   Other Total Returns . . . . . . . . . . . . . . . . . . . . .
   Effect of the Annual Administration Charge on
     Performance Data. . . . . . . . . . . . . . . . . . . . . .
   Use of Indexes  . . . . . . . . . . . . . . . . . . . . . . .
   Other Information . . . . . . . . . . . . . . . . . . . . . .
Income Payment Provisions. . . . . . . . . . . . . . . . . . . .
   Amount of Fixed Income Payments . . . . . . . . . . . . . . .
   Amount of Variable Income Payments. . . . . . . . . . . . . .
   Income Units  . . . . . . . . . . . . . . . . . . . . . . . .
   Income Unit Value . . . . . . . . . . . . . . . . . . . . . .
   Exchange of Income Units. . . . . . . . . . . . . . . . . . .
Safekeeping of Account Assets. . . . . . . . . . . . . . . . . .
Legal Matters  . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information. . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . .

                                       73

<PAGE>   95

                                   APPENDIX A

                            Market Value Adjustment

     We will apply a Market Value Adjustment to amounts surrendered, withdrawn,
transferred or applied to an income plan when taken from a Fixed Sub-Account
more than 30 days before its Expiration Date.  We apply a Market Value
Adjustment separately to each Fixed Sub-Account.

     For a surrender, withdrawal, transfer or amount applied to an income plan,
we will calculate the Market Value Adjustment by applying the factor below to
the total amount that must be surrendered, withdrawn, transferred or applied to
an income plan in order to provide the amount requested.

                                            (N/365)
                         [(1+I)/(1+J+.0025)]        - 1

Where

     -    I is the Index Rate for a maturity equal to the Fixed Sub-Account's
          Guarantee Period, at the time that we established the Sub-Account;

     -    J is the Index Rate for a maturity equal to the time remaining
          (rounded up to the next full year) in the Fixed Sub-Account's
          Guarantee Period, at the time of surrender, withdrawal, transfer, or
          application to an income plan; and

     -    N is the remaining number of days in the Guarantee Period at the time
          of calculation.

     We will apply Market Value Adjustments as follows:

     If the Market Value Adjustment is negative, we first deduct it from any
     remaining value in the Fixed Sub-Account.  We then deduct any remaining
     negative Market Value Adjustment from the amount you surrender, withdraw,
     transfer, or apply to an income plan.

     If the Market Value Adjustment is positive, we add it to any remaining
     value in the Fixed Sub-Account or the amount you surrender.  If you
     withdraw, transfer or apply to an income plan the full amount of the Fixed
     Sub-Account, we add the Market Value Adjustment to the amount you
     withdraw, transfer, or apply to an income plan.

                                  MVA EXAMPLES

Example #1:  Surrender -- Example of a Negative Market Value Adjustment

Assume you invest $100,000 in a Fixed Sub-Account with a Guarantee Period of
ten years, with a Guaranteed Interest Rate of 7.5% and an Index Rate ("I") of
7.0% based on the U.S. Treasury Constant Maturity Series at the time we
established the Sub-Account.  You request a surrender three years into the
Guarantee Period, the Index Rate based on the U.S. Treasury Constant

                                      A-1

<PAGE>   96

Maturity Series for a seven-year Guarantee Period ("J") is 8.0% at the time of
the surrender, and no prior transfers or withdrawals affecting this Fixed
Sub-Account have been made.

CALCULATE THE MARKET VALUE ADJUSTMENT

1.   The Account Value of the Fixed Sub-Account on the date of surrender is
                               3
     $124,230 ($100,000 x 1.075 )

2.   N = 2,555 (365 x 7)

                                                            2555/365
3.   Market Value Adjustment = $124,230 x {[(1.07)/(1.0825)]        -1} =
     - $9,700

Therefore, the amount paid on full surrender is $114,530 ($124,230 - $9,700).

Example #2:  Surrender -- Example of a Positive Market Value Adjustment

Assume you invest $100,000 in a Fixed Sub-Account with a Guarantee Period of
ten years, with a Guaranteed Interest Rate of 7.5% and an Index Rate ("I") of
7.0% based on the U.S. Treasury Constant Maturity Series at the time we
established the Sub-Account.  You request a surrender three years into the
Guarantee Period, the Index Rate based on the U.S. Treasury Constant Maturity
Series for a seven-year Guarantee Period ("J") is 6.0% at the time of the
surrender, and no prior transfers or withdrawals affecting this Fixed
Sub-Account have been made.

CALCULATE THE MARKET VALUE ADJUSTMENT

1.   The Account Value of the Fixed Sub-Account on the date of surrender is
                               3
     $124,230 ($100,000 x 1.075 )

2.   N = 2,555 (365 x 7)

                                                             2555/365
3.   Market Value Adjustment = $124,230  x {[(1.07)/(1.0625)]        -1} =
     + $6,270

Therefore, the amount paid on full surrender is  $130,500 ($124,230 + $6,270).

Example #3:  Withdrawal --  Example of a Negative Market Value Adjustment

Assume you invest $200,000 in a Fixed Sub-Account with a Guarantee Period of
ten years, with a Guaranteed Interest Rate of 7.5% and an Index Rate ("I") of
7.0% based on the U.S. Treasury Constant Maturity Series at the time we
established the Sub-Account.  You request a withdrawal of $100,000 three years
into the Guarantee Period, the Index Rate based on the U.S. Treasury Constant
Maturity Series for a seven-year Guarantee Period ("J") is 8.0% at the time of
withdrawal, and no prior transfers or withdrawals affecting this Fixed
Sub-Account have been made.

                                      A-2

<PAGE>   97

1.   The Account Value of the Fixed Sub-Account on the date of withdrawal is
                               3
     $248,459 ($200,000 x 1.075 ).

2.   N = 2,555 (365 x 7)

                                                            2555/365
3.   Market Value Adjustment = $100,000 x {[(1.07)/(1.0825)]        -1} =
     - $7,808

Therefore, the amount of the withdrawal paid is $100,000, as requested. The
Fixed Sub-Account will be reduced by the amount of the withdrawal paid,
($100,000) and by the Market Value Adjustment ($7,808), for a total reduction
in the Fixed Sub-Account of $107,808.

Example #4:  Withdrawal -- Example of a Positive Market Value Adjustment

Assume you invest $200,000 in a Fixed Sub-Account with a Guarantee Period of
ten years, with a Guaranteed Interest Rate of 7.5% and an initial Index Rate
("I") of 7.0% based on the U.S. Treasury Constant Maturity Series at the time
we established the Sub-Account.  You request a withdrawal of $100,000 three
years into the Guarantee Period, the Index Rate based on the U.S. Treasury
Constant Maturity Series for a seven-year Guarantee Period ("J") is 6.0% at the
time of the withdrawal, and no prior transfers or withdrawals affecting this
Fixed Sub-Account have been made.

1.   The Account Value of the Fixed Sub-Account on the date of withdrawal is
                               3
     $248,459 ($200,000 x 1.075 )

2.   N = 2,555 (365 x 7)

                                                            2555/365
3.   Market Value Adjustment = $100,000 x {[(1.07)/(1.0625)]        - 1} =
     + $5,047

Therefore, the amount of the withdrawal paid is $100,000, as requested. The
Fixed Sub-Account will be reduced by the amount of the withdrawal paid
($100,000) and increased by the amount of the Market Value Adjustment ($5,047),
for a total reduction of $94,953.

                                      A-3

<PAGE>   98

                                   APPENDIX B

   Below is an example of how the Dollar Cost Averaging Program works.

   Assume that the Dollar Cost Averaging Program has been elected and that
$24,000 is invested in a DCA Fixed Sub-Account with a Guarantee Period of two
years and an annual Guaranteed Interest Rate of 6.0%.


<TABLE>
<CAPTION>
                     (1)                (2)              (3)                  (4)                   (5)
Beginning    Beginning of Month     Dollar Cost      Amount Dollar     Interest Credited       End of Month
of Month       Account Value         Averaging       Cost Averaged         For Month           Account Value
- --------       -------------       Monthly Factor    -------------         ---------           -------------
                                   --------------
   <S>         <C>                 <C>               <C>                   <C>                 <C>

   1              24,000                 -                 -                  117                 24,117
   2              24,117               1 / 24            1,005                112                 23,224
   3              23,224               1 / 23            1,010                108                 22,323
   4              22,323               1 / 22            1,015                104                 21,412
   5              21,412               1 / 21            1,020                 99                 20,492
   6              20,492               1 / 20            1,025                 95                 19,562
   7              19,562               1 / 19            1,030                 90                 18,622
   8              18,622               1 / 18            1,035                 86                 17,673
   9              17,673               1 / 17            1,040                 81                 16,715
   10             16,715               1 / 16            1,045                 76                 15,746
   11             15,746               1 / 15            1,050                 72                 14,768
   12             14,768               1 / 14            1,055                 67                 13,780
   13             13,780               1 / 13            1,060                 62                 12,782
   14             12,782               1 / 12            1,065                 57                 11,774
   15             11,774               1 / 11            1,070                 52                 10,756
   16             10,756               1 / 10            1,076                 47                  9,727
   17              9,727               1 / 9             1,081                 42                  8,688
   18              8,688               1 / 8             1,086                 37                  7,639
   19              7,639               1 / 7             1,091                 32                  6,580
   20              6,580               1 / 6             1,097                 27                  5,510
   21              5,510               1 / 5             1,102                 21                  4,429
   22              4,429               1 / 4             1,107                 16                  3,338
   23              3,338               1 / 3             1,113                 11                  2,236
   24              2,236               1 / 2             1,118                 5                   1,124
   25              1,124               1 / 1             1,124                 -                     -
</TABLE>

                                     Note:

                  Column(3) = Column(1) x Column(2)

                  Column(5) = Column(1) - Column(3) + Column(4)

                                      B-1

<PAGE>   99

To obtain a Statement of Additional Information for this Prospectus, please
complete the form below and mail to:

Sage Life Assurance of America, Inc.
Customer Service Center
1290 Silas Deane Highway
Wethersfield, CT 06109

Please send a Statement of Additional Information to me at the following
address:


- -------------------------------------
Name


- -------------------------------------
Address


- -------------------------------------
City/State             Zip Code





<PAGE>   100

                      STATEMENT OF ADDITIONAL INFORMATION
                         DATED _____________ ____, 1999

        FLEXIBLE PAYMENT DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY
                                   CONTRACTS

                                   issued by

         THE SAGE VARIABLE ANNUITY ACCOUNT A AND SAGE LIFE ASSURANCE OF
                                 AMERICA, INC.

                                       Customer Service Center:
                                       1290 Silas Deane Highway
                                       Wethersfield, CT 06109
                                       Telephone: (877) 835-7243
                                                    (Toll Free)


This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the Flexible Deferred Combination Fixed and Variable
Annuity Contracts (the "Contracts" offered by Sage Life Assurance of America,
Inc. ("we," "us," "our," "Sage Life," or the "Company"). You may obtain a copy
of the Prospectus dated ___________, by calling 1-877-835-7243 (Toll Free) or
by writing to our Customer Service Center at the above address.  You may also
obtain a copy of the Prospectus by accessing the Securities and Exchange
Commission's website at http://www.sec.gov. Terms used in the current
Prospectus for the Contracts are incorporated into and made a part of this
Statement of Additional Information.

        THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
           SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR
               THE CONTRACTS AND THE PROSPECTUSES FOR THE TRUSTS.





<PAGE>   101

                      Statement of Additional Information
                               Table of Contents

                                                             Page
                                                             ----

Participation  . . . . . . . . . . . . . . . . . . . . . . . . .

Beneficiary Designation  . . . . . . . . . . . . . . . . . . . .

Calculation of Historical Performance Data . . . . . . . . . . .
  Money Market Sub-Account Yields  . . . . . . . . . . . . . . .
  Other Variable Sub-Account Yields. . . . . . . . . . . . . . .
  Average Annual Total Returns . . . . . . . . . . . . . . . . .
  Other Total Returns. . . . . . . . . . . . . . . . . . . . . .
  Effect of the Annual Administration Charge on
    Performance Data . . . . . . . . . . . . . . . . . . . . . .
  Use of Indexes . . . . . . . . . . . . . . . . . . . . . . . .
  Other Information. . . . . . . . . . . . . . . . . . . . . . .

Income Payment Provisions  . . . . . . . . . . . . . . . . . . .
  Amount of Fixed Income Payments. . . . . . . . . . . . . . . .
  Amount of Variable Income Payments . . . . . . . . . . . . . .
  Income Units . . . . . . . . . . . . . . . . . . . . . . . . .
  Income Unit Value. . . . . . . . . . . . . . . . . . . . . . .
  Exchange of Income Units . . . . . . . . . . . . . . . . . . .

Safekeeping of Account Assets  . . . . . . . . . . . . . . . . .

Legal Matters  . . . . . . . . . . . . . . . . . . . . . . . . .

Other Information  . . . . . . . . . . . . . . . . . . . . . . .

Financial Statements . . . . . . . . . . . . . . . . . . . . . .

                                       i

<PAGE>   102

                                 PARTICIPATION

   The Contracts do not participate in the surplus or profits of the Company,
and the Company does not pay dividends on the Contracts.

                            BENEFICIARY DESIGNATION

   This is as shown in the application. It includes the name of the Beneficiary
and the order and method of payment. If you name "estate" as a Beneficiary, it
means the executors or administrators of your estate. If you name "children" of
a person as a Beneficiary, only children born to or legally adopted by that
person as of an Owner's date of death will be included.

   We may rely on an affidavit as to the ages, names, and other facts about all
Beneficiaries.  We will incur no liability if we act on such affidavit.

                   CALCULATION OF HISTORICAL PERFORMANCE DATA

   From time to time, we may disclose yields, total returns, and other
performance data of the Variable Sub-Accounts and the Funds. Such performance
data will be computed, or accompanied by performance data computed, in
accordance with the standards defined by the SEC.

                        MONEY MARKET SUB-ACCOUNT YIELDS

   From time to time, advertisements and sales literature may quote the current
annualized yield of the Variable Sub-Account investing in the Money Market Fund
(the "Money Market Sub-Account") of the Sage Life Investment Trust for a
seven-day period in a manner that does not take into consideration any realized
or unrealized gains or losses on shares of the Money Market Fund.

   This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) at the end of the seven-day period in
the value of a hypothetical account under a Contract having a balance of one
Accumulation Unit of the Money Market Sub-Account at the beginning of the
period, dividing such net change in Account Value by the value of the
hypothetical account at the beginning of the period to determine the base
period return, and annualizing this quotient on a 365-day basis. The net change
in Account Value reflects (i) net income from the Money Market Fund
attributable to the hypothetical account; and (ii) charges and deductions
imposed under a Contract which are attributable to the hypothetical account.
The charges and deductions include the per unit charges for the hypothetical
account for the annual administration charge and the Asset-Based Charges.  For
purposes of calculating current yields for a Contract, an average per unit
annual administration charge is used based on the $40 Annual Administration
Charge.  Current yield is calculated according to the following formula:

                                       1

<PAGE>   103

<TABLE>
<S>                         <C>
Current Yield =             ((NCS - ES)/UV) (365/7)

 Where:

NCS =                       the net change in the value of the Money Market
                            Fund (exclusive of realized gains or losses on the
                            sale of securities, unrealized appreciation and
                            depreciation, and income other than investment
                            income) for the seven-day period attributable to a
                            hypothetical account having a balance of one
                            Accumulation Unit.

ES =                        per unit expenses attributable to the hypothetical
                            account for the seven-day period.

UV =                        the unit value for the first day of the seven-day
                            period.

                                               (365/7)
Effective Yield =           (1+((NCS - ES)/UV))       -1

 Where:

NCS =                       the net change in the value of the Money Market
                            Fund (exclusive of realized gains or losses on the
                            sale of securities, unrealized appreciation and
                            depreciation and income other than investment
                            income) for the seven-day period attributable to a
                            hypothetical account having a balance of one
                            Accumulation Unit.

ES =                        per unit expenses attributable to the hypothetical
                            account for the seven-day period.

UV =                        the unit value for the first day of the seven-day
                            period.
</TABLE>

   Because of the charges and deductions imposed under the Contracts, the yield
for the Money Market Sub-Account is lower than the yield for the Money Market
Fund.

   The current and effective yields on amounts held in the Money Market
Sub-Account normally fluctuate on a daily basis.  THEREFORE, THE DISCLOSED
YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF
FUTURE YIELDS OR RATES OF RETURN. The Money Market Sub-Account's actual yield
is affected by changes in interest rates on money market securities, average
portfolio maturity of the Money Market Fund, the types and quality of portfolio
securities held by the Money Market Fund and the Money Market Fund's operating
expenses. Yields on amounts held in the Money Market Sub-Account may also be
presented for periods other than a seven-day period.

                                       2

<PAGE>   104

OTHER VARIABLE SUB-ACCOUNT YIELDS

   The yield is computed by: 1) dividing the net investment income of the Fund
attributable to the Variable Sub-Account units less expenses allocated to a
Variable Sub-Account for the period; by 2) the maximum offering price per unit
on the last day of the period times the daily average number of Accumulation
Units outstanding for the period; and then 3) compounding that yield for a
six-month period; and then 4) multiplying that result by two (2).  Expenses
allocated to a Variable Sub-Account include the Annual Administration Charge
and the Asset-Based Charges.  The yield calculation assumes an annual
administration charge of $40 per Contract deducted at the end of each Contract
Year on the Contract Anniversary.  For purposes of calculating the 30-day or
one-month yield, an average administration cost charge based on the average
Account Value in the Variable Sub-Account is used to determine the amount of
the charge attributable to the Variable Sub-Account for the 30-day or one-month
period. The 30-day or one-month yield is calculated according to the following
formula:

<TABLE>
   <S>          <C>                            6
   Yield =      2 x ((((NI - ES)/(U x UV)) + 1) -1)

   Where:

   NI =         net income of the portfolio for the 30-day or one-month period
                attributable to the Variable Sub-Account's units.

   ES =         expenses of the Variable Sub-Account for the 30-day or one-month
                period.

   U =          the average number of units outstanding.

   UV =         the unit value at the close (highest) of the last day in the
                30-day or one-month period.
</TABLE>

   Because of the charges and deductions imposed under the Contracts, the yield
for the Variable Sub-Account is lower than the yield for the corresponding
Fund.

   The yield on amounts invested in the Variable Sub-Accounts normally
fluctuates over time. THEREFORE, THE DISCLOSED YIELD FOR ANY GIVEN PAST PERIOD
IS NOT AN INDICATION OR REPRESENTATION OF FUTURE YIELDS OR RATES OF RETURN. A
Variable Sub-Account's actual yield is affected by the types and quality of
securities held by the corresponding Fund and that Fund's operating expenses.

AVERAGE ANNUAL TOTAL RETURNS

   From time to time, sales literature or advertisements may also quote average
annual total returns for one or more of the Variable Sub-Accounts for various
periods of time.

   When a Variable Sub-Account or Fund has been in operation for 1, 5, and 10
years, respectively, the average annual total return for these periods will be
provided. Otherwise,

                                       3

<PAGE>   105

average annual total return will be shown from inception of the Variable
Sub-Account. Average annual total returns for other periods of time may, from
time to time, also be disclosed.

   Standard average annual total returns represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a Contract to the Surrender Value of that investment as of the last day
of each of the periods. The ending date for each period for which total return
quotations are provided will be for the most recent calendar quarter-end
practicable, considering the type of the communication and the media through
which it is communicated.

   Standard average annual total returns are calculated using Variable
Sub-Account unit values which we calculate on each Business Day based on the
performance of the Variable Sub-Account's underlying Fund.  The calculation
assumes that annual Asset-Based Charges of 1.40% during the first seven
Contract Years (decreasing to 1.25% during Contract Years 8 and later) are
deducted monthly beginning on the Contract Date.  The calculation also assumes
that the Annual Administration Charge is $40 per year per Contract deducted at
the end of each Contract Year during the first seven contract years.  For
purposes of calculating average annual total return, an average per-dollar
per-day annual administration charge attributable to the hypothetical account
for the period is used.  The calculation also assumes surrender of Account
Value at the end of the period for the return quotation.  The  total return is
calculated according to the following formula:

<TABLE>
   <S>          <C>
                       1/N
   TR =         (ESV/P)   -1

   Where:

   TR =         the average annual total return for the period.

   ESV =        the Surrender Value of the hypothetical account at the end of the
                period.

   P =          a hypothetical initial payment of $1,000.

   N =          the number of years in the period.
</TABLE>

OTHER TOTAL RETURNS

   The Company may disclose cumulative total returns in conjunction with the
standard formats described above.  The cumulative total returns will be
calculated using the following formula:

<TABLE>
   <S>          <C>
   CTR =        (ESV/P) - 1

   Where:

   CTR =        The cumulative total return for the period.

   ESV =        The ending Surrender Value of the hypothetical investment at the
                end of the period net of recurring charges.
</TABLE>

                                       4

<PAGE>   106

<TABLE>
   <S>               <C>
   P =               A hypothetical single payment of $1,000.
</TABLE>

EFFECT OF THE ANNUAL ADMINISTRATION CHARGE ON PERFORMANCE DATA

   The Contracts provide for a $40 Annual Administration Charge (waived for
Contracts with Account Value of at least $50,000, or beginning on and after the
eighth Contract Year) that is deducted from the Sub-Accounts proportionately.
For purposes of reflecting the Annual Administration Charge in yield and total
return quotations, the average Account Value is assumed to be $30,000, so that
the annual administration charge is .1333%.

USE OF INDEXES

   From time to time, the performance of certain historical indexes may be
presented in advertisements or sales literature.  The performance of these
indexes may be compared to the performance of certain Variable Sub-Accounts or
Funds, or may be presented without such a comparison.

OTHER INFORMATION

The following is a partial list of those publications which may be noted in the
Funds' sales literature and/or shareholder materials which contain articles
describing investment results or other data relative to one or more of the
Variable Sub-Accounts. Other publications may also be cited.

Broker World                                             Financial World
Across the Board                                         Advertising Age
American Banker                                          Barron's
Best's Review                                            Business Insurance
Business Month                                           Business Week
Changing Times                                           Consumer Reports
The Economist                                            Financial Planning
Forbes                                                   Fortune
Inc.                                                     Institutional Investor
Insurance Forum                                          Insurance Sales
Insurance Week                                           Journal of Accountancy
Journal of Financial Service Professionals               Journal of Commerce
Life Insurance Selling                                   Life Association News
MarketFacts                                              Manager's Magazine
National Underwriter                                     Money
Morningstar, Inc.                                        Nation's Business
New Choices (formerly 50 Plus)                           The New York Times
Pension World                                            Pensions & Investments
Rough Notes                                              Round the Table
U.S. Banker                                              VARDs
The Wall Street Journal                                  Working Woman

                           INCOME PAYMENT PROVISIONS

   AMOUNT OF FIXED INCOME PAYMENTS. On the Income Date, the amount you have
chosen to apply to provide fixed income payments will be applied under the
income plan you have chosen.

                                       5

<PAGE>   107

The monthly income payment factor in effect on the Income Date times that
amount and then divided by $1,000 will be the dollar amount of each monthly
payment. Each of these payments are guaranteed and remain level throughout the
period you selected.

   The monthly income payment factor used to determine the amount of the fixed
income payments will not be less than the guaranteed minimum monthly income
payment factor shown in your Contract.

   AMOUNT OF VARIABLE INCOME  PAYMENTS.  These payments will vary in amount.
The dollar amount of each payment attributable to each Variable Sub-Account is
the number of Income Units for each Variable Sub-Account times the Income Unit
value of that Sub-Account. The sum of the dollar amounts for each Variable
Sub-Account is the amount of the total variable income payment. The Income Unit
values for each payment will be determined no earlier than five Business Days
preceding the due date of the variable income payment. We guarantee the payment
will not vary due to changes in mortality or expenses.

   INCOME UNITS. On the Income Date, the number of Income Units for an
applicable Variable Sub-Account is determined by multiplying (1) by (2),
dividing the result by (3), and then dividing that result by (4) where:

   (1)     is the amount you have chosen to allocate to that Variable
           Sub-Account;

   (2)     is the monthly income payment factor for the income plan chosen;

   (3)     is $1,000; and

   (4)     is the Income Unit value for the Variable Sub-Account for the
           Valuation Period ending on that date.

   INCOME UNIT VALUE. The value of an Income Unit is calculated at the same
time that the value of an Accumulation Unit is calculated and is based on the
same values for Fund shares and other assets and liabilities. The Income Unit
value for a Variable Sub-Account's first Business Day was set at $10.
Thereafter, the Income Unit value for every Business Day is determined by
multiplying (a) by (b), and then dividing by (c) where:

   (a)     is the Income Unit value for the immediately preceding Valuation
           Period;

   (b)     is the "net investment factor" for the Variable Sub-Account for the
           Valuation Period for which the value is being determined; and

   (c)     is the daily equivalent of the assumed investment rate that you
           have selected and that is shown in your Contract for the number of
           days in the Valuation Period.

   After the Income Date the net investment factor is calculated slightly
different than before the Income Date. Before the Income Date Asset-Based
Charges are calculated as a percentage of the Variable Account Value on the
date of deduction. These charges are equal on an annual basis to 1.40%,
decreasing to 1.25% after the seventh Contract Year. However, on and after the
Income Date, we call these charges Variable Sub-Account Charges and deduct them
from the assets in each Variable Sub-Account on a daily basis. Therefore, the
"net investment factor" in (b),

                                       6

<PAGE>   108

above, is determined by dividing (i) by (ii), and then subtracting (iii) where:

   (i)     is the Accumulation Unit value for the current Valuation Period;

   (ii)    is the Accumulation Unit value for the immediately preceding
           Valuation Period; and

   (iii)   is the daily Variable Sub-Account Charges (adjusted for the
           number of days in the Valuation Period).

                ILLUSTRATION OF CALCULATION OF INCOME UNIT VALUE

<TABLE>
<S>                                                                  <C>
1.  Accumulation Unit value for current Valuation Period . . . . . .  10.0026116

2.  Accumulation Unit value for immediately preceding 
    Valuation Period . . . . . . . . . . . . . . . . . . . . . . . .  10.0000000

3.  Net Investment Factor prior to the Income date (1)/(2) . . . . .  1.00026116

4.  Adjustment for Variable Sub-Account Charges. . . . . . . . . . . 0.000038626

5.  Net Investment Factor on and after the Income Date (3)-(4) . . .  1.00022253

6.  Income Unit value for the immediately preceding Valuation 
    Period . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10.00000000

7.  Daily equivalent of the assumed investment rate for 
    the number of days in the Valuation Period (assuming you
                     1/365
     select 3%)=(1.03     )  . . . . . . . . . . . . . . . . . . . .  1.00008099

8.  Income Unit value for current Valuation Period
    [(5) x (6)]/(7)  . . . . . . . . . . . . . . . . . . . . . . . . 10.00141533
</TABLE>

                                       7

<PAGE>   109

                    ILLUSTRATION OF VARIABLE INCOME PAYMENTS
<TABLE>
<S>                                                                  <C>
1.  Number of Accumulation Units . . . . . . . . . . . . . . . . . . . . . 1,000

2.  Accumulation Unit value  . . . . . . . . . . . . . . . . . . . .  10.0026116

3.  Account Value (1) x (2)  . . . . . . . . . . . . . . . . . . . . . 10,002.61

4.  Minimum monthly income payment factor per $1,000 applied . . . . . . . 10.50

5.  First monthly variable income payment [(3) x (4)]/$1,000 . . . . . .  105.03

6.  Income Unit value  . . . . . . . . . . . . . . . . . . . . . . . 10.00141533

7.  Number of Income Units (5)/(6) . . . . . . . . . . . . . . . . . .  10.50151

8.  Assume Income Unit value at the end of the second month is . . . . . . 10.05

9.  Second monthly variable income payment (7) x (8) . . . . . . . . . .  105.54

10. Assume Income Unit value at the end of the third month is  . . . . . . 10.10

11. Third monthly variable income payment (7) x (10)   . . . . . . . . .  106.07
</TABLE>

   EXCHANGE OF INCOME UNITS. After the Income Date, if there is an exchange of
value of a designated number of Income Units of particular Variable
Sub-Accounts into other Income Units, the value will be such that the dollar
amount of the income payment made on the date of exchange will be unaffected by
the exchange.

                         SAFEKEEPING OF ACCOUNT ASSETS

   The Company holds the title to the assets of the Variable Account. The
assets are kept physically segregated and held separate and apart from the
Company's General Account assets and from the assets in any other separate
account.

   Records are maintained of all purchases and redemptions of Fund shares held
by each of the Variable Sub-Accounts.

   A fidelity bond in the amount of approximately $10 million per occurrence
covering the Company's directors, officers, and employees has been issued by
Lloyd's of London.

                                 LEGAL MATTERS

   All matters relating to Delaware law pertaining to the Contracts, including
the validity of the Contracts and the Company's authority to issue the
Contracts, have been passed upon by James F. Bronsdon, the Company's Vice
President, Legal and Compliance. Sutherland Asbill & Brennan LLP has provided
advice on certain matters relating to the federal securities laws.

                                       8

<PAGE>   110

                               OTHER INFORMATION

   A registration statement has been filed with the SEC under the Securities
Act of 1933, as amended, with respect to the Contracts discussed in this
Statement of Additional Information. Not all the information set forth in the
registration statement, amendments and exhibits thereto has been included in
this Statement of Additional Information. Statements contained in this
Statement of Additional Information concerning the content of the Contracts and
other legal instruments are intended to be summaries. For a complete statement
of the terms of these documents, reference should be made to the instruments
filed with the SEC.

                              FINANCIAL STATEMENTS

   The Statement of Additional Information contains no financial statements for
the Variable Account because the Variable Account had not commenced operations
as of the date of this Statement of Additional Information. Financial
statements of the Company are presented in the Prospectus.

                                       9

<PAGE>   111

                                     PART C

                               OTHER INFORMATION

ITEM 24.  FINANCIAL STATEMENTS AND EXHIBITS

(a)       Financial Statements

   All required financial statements are included in Part A. Financial
statements for The Sage Variable Annuity Account A (the "Variable  Account")
are not included in Part B because the Variable Account had not yet commenced
operations as of the date of this Registration Statement.

(b)       Exhibits

   
<TABLE>
<S>            <C>
   (1)(a)      Resolutions of the Board of Directors of Sage Life Assurance of
               America, Inc. establishing The Sage Variable Annuity Account
               A.(1)

   (2)         Not Applicable.

   (3)         Form of Distribution Agreement with Sage Distributors, Inc. and
               Form of Selling Agreement.(2)

4(a)(i)(B)     Amended Form of Individual Contract.(3)

    (ii)(B)    Amended Form of Individual Contract with Interest Account.(3)

    (iii)(B)   Amended Form of Group Contract.(4)

    (iv)(B)    Amended Form of Group Certificate.(4)

 (b)(i)(B)     Amended Form of Individual IRA Rider.(4)

    (ii)(B)    Amended Form of Group IRA Rider.(4)

    (iii)(B)   Amended Form of Individual SIMPLE IRA Rider.(4)

    (iv)(B)    Amended Form of Group SIMPLE IRA Rider.(4)

    (v)(A)     Form of Individual Roth IRA Rider.(5)

    (vi)(A)    Form of Group Roth IRA Rider.(5)

 (5)(i)        Form of Individual Contract Application.(3)

    (ii)(B)    Amended Form of Group Certificate Application.(3)

 (6)(a)        Articles of Incorporation of the Company.(6)

    (b)        By-Laws of the Company.(6)
</TABLE>
    


                                       1

<PAGE>   112

   
<TABLE>
<S>            <C>
 (7)           Not Applicable.

 (8)(a)(i)     Form of Participation Agreement with AIM Variable Insurance 
               Funds, Inc.(7)

       (ii)    Form of Participation Agreement with The Alger American Fund.(7)

       (iii)   Form of Participation Agreement with Liberty Variable 
               Investment Trust.(8)

       (iv)    Form of Participation Agreement with MFS(R) Variable Insurance 
               Trust.(TM)(7)

       (v)     Form of Participation Agreement with Morgan Stanley Universal 
               Funds, Inc.(8)

       (vi)    Form of Participation Agreement with Oppenheimer Variable 
               Account Funds.(8)

       (vii)   Form of Participation Agreement with Sage Life Investment 
               Trust.(7)

       (viii)  Form of Participation Agreement with SteinRoe Variable 
               Investment Trust.(8)

       (ix)    Form of Participation Agreement with T. Rowe Price Equity 
               Series, Inc.(8)

       (b)     Form of Services Agreement with Financial Administration 
               Services, Inc.(8)

    (9)(i)     Opinion and Consent of James F. Bronsdon.*

       (ii)    Consent of Sutherland Asbill & Brennan LLP.*

    (10)       Consent of Ernst & Young LLP.*

    (11)       Not Applicable.

    (12)       Not Applicable.

    (13)       Not Applicable.

    (14)(a)    Power of Attorney for Paul C. Meyer(3)

        (b)    Power of Attorney for Ronald S. Scowby(9)

        (c)    Power of Attorney for Richard D. Starr(9)

        (d)    Power of Attorney for H. Louis Shill*

        (e)    Power of Attorney for Mitchell R. Katcher*

         *     Filed herewith                        
</TABLE>

(1)   Incorporated herein by reference to Exhibit No. 1 to the Registration
Statement on Form N-4 (File No. 333-43329) filed on December 24, 1997.

(2)   Incorporated herein by reference to Exhibit No. 3 in Pre-Effective 
Amendment No. 1 to the Registration Statement on Form N-4 (File No. 333-43329) 
filed on December 31, 1998.

(3)   Previously filed in Pre-Effective Amendment No. 1 to this Registration
Statement on January 12, 1999. 

(4)   Incorporated herein by reference to Exhibit No. 4 to the Registration
Statement on Form N-4 (File No. 333-43329) filed on December 24, 1997.
    

                                       2

<PAGE>   113
   
(5)   Incorporated herein by reference to Exhibit No. 4 to the Registration
Statement on Form N-4 (File No. 333-43329) filed on December 24, 1997.

(6)   Incorporated herein by reference to Exhibit No. 6 to the Registration
Statement filed on Form N-4 (File No. 33-43329) filed on December 24, 1997.

(7)   Incorporated herein by reference to Exhibit No. 8 to Pre-Effective
Amendment No. 1 to the Registration Statement filed on Form N-4 (File No.
333-43329) on December 31, 1998.

(8)   Incorporated herein by reference to Exhibit No. 8 to Pre-Effective
Amendment No. 2 to the Registration Statement filed on Form N-4 (333-43329) on 
January 28, 1999. 
    

   
(9)   Incorporated herein by reference to Exhibit No. 14 to Pre-Effective
Amendment No. 2 to the Registration Statement filed on Form N-4 (File No.
333-43329) filed on January 28, 1999.
    


ITEM 25.  DIRECTORS AND OFFICERS OF THE DEPOSITOR

     Incorporated herein by reference to the section titled "Directors and
Executive Officers" of the Prospectus filed as Part A of this Registration
Statement.

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

     The registrant is a segregated asset account of the Company and therefore
is owned and controlled by the Company. The Company is a stock life insurance
company of which all the voting securities are owned by Sage Life Holdings of
America, Inc., a Delaware Corporation ("Sage Life Holdings"), all of the voting
securities of which are owned by Sage Insurance Group, Inc., a Delaware
corporation. (The Company in turn owns all of the voting securities of Sage
Life Assurance Company of New York, a New York domiciled company which is
pursuing a license to conduct insurance business in that state.) In addition to
Sage Life Holdings, Sage Insurance Group also owns all of the voting securities
of Sage Distributors, Inc. (a broker-dealer), Sage Advisors, Inc. (a registered
investment adviser), and Finplan Holdings, Inc. (a financing company), all of
which are Delaware corporations. All the voting securities of Sage Insurance
Group, Inc. are owned by Sage Insurance Holdings, Inc, a Delaware corporation.
Sage Insurance Holdings, Inc. is a wholly owned subsidiary of Sage Holdings
(USA), Inc., a Delaware corporation. (Sage Holdings (USA), Inc. also owns all
of the voting securities of Sage Properties (USA), Inc., a Virginia corporation
whose principal assets are real estate.) Sage Holdings (USA), Inc. is a wholly
owned subsidiary of Sage Life Holdings Limited, a South African corporation.
The nature of the business of the companies listed above is insurance and
financial services. Sage Life Holdings is 100% owned by Sage Group Limited, a
South African corporation that is the ultimate holding company. Sage Group
Limited is a controlling company operating in life insurance, mutual funds and
investment management. Various companies and other entities controlled by Sage
Group Limited may be considered to be under common control with the registrant
or the Company. Such other companies and entities and the nature of their
businesses are set forth below. These companies are incorporated in South
Africa and are wholly owned subsidiaries unless otherwise noted.

     Sage Life Holdings was formed pursuant to a letter of intent between Sage
Group Limited and Swiss Re Life and Health America, Inc. ("Swiss Re"). Swiss
Re's ultimate parent company is Swiss Reinsurance Company, Switzerland, one of
the world's largest life and health reinsurance groups. Pursuant to the letter
of intent, Swiss Re made an equity investment into Sage Life Holdings. The
arrangements contemplated by the letter of intent may be subject to regulatory
approval.

                                       3

<PAGE>   114

             DIRECT AND INDIRECT SUBSIDIARIES OF SAGE GROUP LIMITED

<TABLE>
<CAPTION>                                                                     
COMPANY NAME                                            PRINCIPAL BUSINESS    
<S>                                                     <C>                   
Alexotel (Pty) Ltd                                      Property holding      
Allied Financial Planning Services (Pty) Ltd            Investment consultants
Bentley Office Park (Pty) Ltd                           Property development &
                                                          investment          
Blackreef Properties (Pty) Ltd                          Property holding      
Consumer Classics (Pty) Ltd                             Manufacturing &       
                                                          distribution        
Corporate Marketing Services (Pty) Ltd                  Investment marketing  
Dinwiddie Township (Pty) Ltd                            Property holding      
Edenston Properties (Pty) Ltd                           Property development  
Educational Information Services (Pty) Ltd              Publishing            
Ensiklopedie Afrikana (Edms) Beperk                     Publishing            
Estromin Properties & Investments (Pty) Ltd             Property investment   
Everest Construction (Pty) Ltd                          Construction          
FPS (South Vaal) Investments (Pty) Ltd                  Property investment   
FPS (Vaal) Investments (Pty) Ltd                        Investment holding    
FPS Consultants Ltd                                     Investment consultants
FPS Corporate Services (Pty) Ltd                        Pension advisors      
FPS Investment Holdings Ltd                             Investment holding    
FPS Investments (Pty) Ltd                               Investment holding    
FPS Ltd                                                 Investment consultants
FPS Marketing & Management Systems (Pty) Ltd            Training              
Fraser Street Registrars (Pty) Ltd                      Transfer secretaries  
Hatfield Properties (Block A) (Pty) Ltd                 Property investment   
Hatfield Properties (Block B) (Pty) Ltd                 Property investment   
Hatfield Properties (Block C) (Pty) Ltd                 Property investment   
Hatfield Properties (Block D) (Pty) Ltd                 Property investment   
Highrise Home Investments (Pty) Ltd                     Property investment   
Home Mortgage Investments (Pty) Ltd (50% owner)         Financing             
J van Streepen (Kempton Park) (Pty) Ltd (51% owner)     Property development  
Kemparkto (Pty) Ltd                                     Property investment & 
                                                          development         
Lakeview Management Properties (Pty) Ltd (75% owner)    Property management   
Lanrov Investments (Pty) Ltd                            Investment holding    
Lot 26 of Portion 8 Parktown (Pty) Ltd                  Property development  
Lot 26 of Portion 9 Parktown (Pty) Ltd                  Property investment   
Mardin Agency (Pty) Ltd                                 Real estate agents    
Marlands Flats (Pty) Ltd                                Property holding      
Meumann & Heyneke (Pty) Ltd                             Retail merchants      
Nedrep Investments Ltd                                  Investment holding    
Netherlands Properties (Pty) Ltd                        Property investment   
New Smal Construction Co. (Pty) Ltd                     Construction          
Noordwyk Developments (Pty) Ltd                         Property development  
Palmiet Townships (Pty) Ltd                             Property development  
PJP Properties (Pty) Ltd                                Investment            
R/E 105 Rosebank (Pty) Ltd                              Investment holding    
Residential Mortgage Investments (Pty) Ltd (50% owner)  Financing             
S A Cultural Holdings (Pty) Ltd                         Investment            
S A Kultuur Beleggings (Edms) Beperk                    Investment            
</TABLE>

                                       4

<PAGE>   115

<TABLE>
<CAPTION>
COMPANY NAME                                        PRINCIPAL BUSINESS
<S>                                                 <C>
S.B. Plant Hire (Pty) Ltd                           Plant hire
SACI Finance (Pty) Ltd                              Finance company
Sage Business Park (Eight) (Pty) Ltd                Property investment
Sage Business Park (Five) (Pty) Ltd                 Property investment
Sage Business Park (Four) (Pty) Ltd                 Property investment
Sage Business Park (Nine) (Pty) Ltd                 Property investment
Sage Business Park (One) (Pty) Ltd                  Property investment
Sage Business Park (Seven) (Pty) Ltd                Property investment
Sage Business Park (Six) (Pty) Ltd                  Property investment
Sage Business Park (Three) (Pty) Ltd                Property investment
Sage Business Park (Two) (Pty) Ltd                  Property investment
Sage Centre (Pty) Ltd                               Property investment
Sage Corporate Services (Pty) Ltd                   Investment holding
Sage Family Benefits (Pty) Ltd                      Insurance consultants
Sage Holdings Ltd                                   Financial, investment &
                                                    management
Sage Investment Trust Ltd                           Insurance & investment
Sage Land Finance (Pty) Ltd                         Financiers
Sage Land Holdings (Pty) Ltd                        Investment holding
Sage Library Gardens Ltd                            Investment holding
Sage Life Holdings Ltd                              Investment holding
Sage Life Ltd                                       Life insurance
Sage Management Services (Pty) Ltd                  Management
Sage Parking (Pty) Ltd                              Own & operate parking
                                                    garages
Sage Personal Investment Marketing (Pty) Ltd        Investment consultants
Sage Properties (549 Sandown) (Pty) Ltd             Property holding
Sage Properties (Menlyn) (Pty) Ltd                  Property investment
Sage Properties (Rivonia Four) (Pty) Ltd            Property holding
Sage Properties (Sunnyside) (Pty) Ltd               Property holding
Sage Properties Ltd                                 Investment holding
Sage Property Holdings Ltd                          Property holding
Sage Property Management Services (Pty) Ltd         Property management
Sage Property Portfolio Managers (Pty) Ltd          Property investment &
                                                    management
Sage Property Trust Managers, Ltd. (77.2% owner)    Management of unit trusts
Sage Schachat Developments (Pty) Ltd                Builders
Sage Schachat Ltd                                   Investment holding
Sage Secretarial Services (Pty) Ltd                 Management & secretarial
Sage Selections (Pty) Ltd                           Investment
Sage Specialized Insurances Ltd                     Short term insurance
</TABLE>                                            

                                       5

<PAGE>   116

<TABLE>
<CAPTION>
COMPANY NAME                                PRINCIPAL BUSINESS
<S>                                         <C>
Sage Strategic Investments (Pty) Ltd        Investment holding
Sage Trustees (Pty) Ltd                     Trustees
Sage Unit Trusts Ltd                        Management of unit trusts
Sagemed (Pty) Ltd                           Health & medical insurance
SAK  Executive Investments (Pty) Ltd        Investment holding
SAK Holdings (Pty) Ltd                      Investment holding
Sandhurst Properties (Block A) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block B) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block C) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block D) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block E) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block F) (Pty) Ltd    Property investment & management
Sandhurst Properties (Block G) (Pty) Ltd    Property investment & management
Sandown Development Holdings (Pty) Ltd      Property holding
Sandown Developments (Pty) Ltd              Property development
Schachat Ciskei (Pty) Ltd                   Property development
Schachat Construction (Pty) Ltd             Construction
Schachat Cullum (Pty) Ltd                   Property development & management
Schachat Finance Company (Pty) Ltd          Financiers
Schachat Land Resources (Pty) Ltd           Investment holding
Schachat Natal (Pty) Ltd                    Farming & other
Schalab Townships (Pty) Ltd (51% owner)     Property development
Sectional Title (Pty) Ltd                   Property development
SLR Land Development (Pty) Ltd              Building contractors
SMH Land Development (Pty) Ltd              Property investment
SPTM Holdings (Pty) Ltd                     Investment holding
SSI Securities (Pty) Ltd                    Financiers
Stonehouse Investments (Pty) Ltd            Property investment
Strandbou (Pty) Ltd                         Property investment
Sunnyside Erf 26 (Block B) (Pty) Ltd        Property investment & management
Sunnyside Erf 26 (Block C) (Pty) Ltd        Property investment & management
Sunnyside Erf 26 (Block  D) (Pty) Ltd       Property investment & management
Table Classics (Pty) Ltd                    Deal in tableware products
The Gold Jewelry Corporation (Pty) Ltd      Manufacture & sale of coins & 
                                              jewelry
Townhomes (Pty) Ltd                         Building contractors
Von Brandis Square Development Co.          
  (Pty) Ltd                                 Property development
Wereldspekium (Edms) Beperk                 Distributors & publishers of books
Witch Construction  Company (Pty) Ltd       Property investment & development
Witch Construction Company (Transvaal)      
  (Pty) Ltd                                 Property investment & development
Witch Management (Pty) Ltd                  Management services
Sage International B.V. (Netherlands        
  corporation)                              Holding
Sage International Assets Ltd (BVI          
corporation)                                Holding
Sage Management Services (USA), Inc.        
  (New York corporation)                    Management services

</TABLE>

<PAGE>   117

ITEM 27.  NUMBER OF CONTRACT OWNERS

     Not applicable.

ITEM 28.  INDEMNIFICATION

     Sage Life's Articles of Incorporation provide that a director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except that (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which would
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any personal benefit.
Notwithstanding the foregoing, the Articles provide that if the Delaware
General Corporation Law is amended to authorize further limitations of the
liability of a director or a corporation, then a director of the Company, in
addition to circumstances in which a director is not personally liable as set
forth in the preceding sentence, shall be held free from liability to the
fullest extent permitted by the Delaware General Corporation Law as amended.

     Sage Life's Bylaws provide that the Company shall indemnify its officers,
directors, employees and agents to the extent permitted by the General
Corporation Law of Delaware.

     Further, Section 145 of Delaware General Corporation Law provides that a
corporation shall have power to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust,  or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect  to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had a reasonable cause to believe that his conduct was not
unlawful.

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

                                       7

<PAGE>   118

ITEM 29.  PRINCIPAL UNDERWRITER

     (a) Sage Distributors, Inc. ("Sage Distributors") is the registrant's
         principal underwriter.

     (b) Officers and Directors of Sage Distributors

<TABLE>
<CAPTION>
                                         Positions and Offices With 
Name and Principal Business Address*     Sage Distributors
- -----------------------------------      --------------------------
<S>                                      <C>
Robin I. Marsden                         Director
                                         
Mitchell R. Katcher                      Director
                                         
Ronald S. Scowby                         Director
                                         
James F. Bronsdon                        President, Chief Executive 
                                           Officer, Chief Legal Officer
                                         
James F. Renz                            Chief Financial Officer, 
                                           Treasurer, Assistant Secretary
                                         
Robert J. Kiggins                        Secretary
</TABLE>                                 

*    The principal business address of all of the persons listed above is 300
     Atlantic Street, Stamford, CT 06901, except for Mr. Kiggins whose
     principal business address is 11 Martine Avenue, 12th Floor, White Plains,
     New York 10606.

ITEM 30.  LOCATION OF BOOKS AND RECORDS

     All of the accounts, books, records or other documents required to be kept
by Section 31(a) of the Investment Company Act of 1940 and rules thereunder,
are maintained at our Customer Service Center.

ITEM 31.  MANAGEMENT SERVICES

     All management contracts are discussed in Part A or Part B of this
registration statement.

ITEM 32.  UNDERTAKINGS AND REPRESENTATIONS

     (a)  The registrant undertakes that it will file a post-effective
             amendment to this registration statement as frequently as is
             necessary to ensure that the audited financial statements in the
             statement are never more than 16 months old for as long as
             purchase payments under the Contracts offered herein are being
             accepted.

     (b)  The registrant undertakes that it will include either (1) as part of
             any application to purchase a Contract offered by the prospectus,
             a space that an applicant can check to request a Statement of
             Additional Information, or (2) a post card or similar written
             communication affixed to or included in the prospectus that the
             applicant can remove and send to the Company for a Statement of
             Additional Information.

                                       8

<PAGE>   119

     Additional Information.

     (c)  The registrant undertakes to deliver any Statement of Additional
             Information and any financial statements required to be made
             available under this Form N-4 promptly upon written or oral
             request to the Company at the address or phone number listed in
             the prospectus.

     (d)  The Company represents that the fees and charges under the Contracts,
             in the aggregate, are reasonable in relation to the services
             rendered, the expenses expected to be incurred, and the risks
             assumed by the Company.

                                       9

<PAGE>   120

   
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant has caused this Pre-Effective Amendment No. 2 to be signed
on its behalf, in the City of Stamford, and the State of Connecticut, on this 
9th day of February, 1999.
    

   
<TABLE>
<S>                      <C>
                         The Sage Variable Annuity Account A
                         (Registrant)
                       
                       
                         By:  Sage Life Assurance of America, Inc.
                       
                       
Attest:                  By:  /s/Robin I. Marsden*
                              ------------------------------
                              Robin I. Marsden
/s/Cynthia Wendt              Director, President, Chief Executive Officer
- -----------------------       Sage  Life  Assurance  of  America, Inc.
                       
                       
                       
                       
                       
                         Sage Life Assurance of America, Inc.
                         (Depositor)
                       
Attest:                  By:  /s/Robin I. Marsden*
                              ------------------------------
                              Robin I. Marsden
/s/Cynthia Wendt              Director, President, Chief Executive Officer
- -----------------------
</TABLE>
    

<PAGE>   121

   
           As required by the Securities Act of 1933, this Pre-Effective
      Amendment No. 2 has been signed by the following persons in the capacities
      and on the dates indicated.
    

   
<TABLE>
<CAPTION>
Signature                                      Title                      Date
- ---------                                      -----                      ----
<S>                                   <C>                              <C>
/s/Ronald S. Scowby *
- ----------------------                        Chairman                 February 9, 1999
Ronald S. Scowby


/s/H. Louis Shill *
- -----------------------                        Director                February 9, 1999
H. Louis Shill

/s/Paul C. Meyer *
- -----------------------                        Director                February 9, 1999
Paul C. Meyer


/s/Richard D. Starr *
- -----------------------                        Director                February 9, 1999
Richard D. Starr


/s/Mitchell R. Katcher *
- ------------------------              Director, Senior Executive       February 9, 1999
Mitchell R. Katcher                     Vice President, Chief
                                         Financial Officer,
                                           Chief Actuary
</TABLE>
    

   
*By: /s/ James F. Bronsdon, Esq.
         ------------------------
         James F. Bronsdon Esq.
         As Attorney-in-Fact pursuant
         to a Power of Attorney as dated below.
    

   
<TABLE>
<CAPTION>
        Director                     Date
        --------                     ----
<S>                              <C>
Ronald S. Scowby                  January 26, 1999
H. Louis Shill                    February 8, 1999
Paul C. Meyer                    December 23, 1998
Richard D. Starr                   January 7, 1999
Mitchell R. Katcher               January 26, 1999
</TABLE>
    


<PAGE>   1
                                                                    EXHIBIT 9(i)


[SAGE LIFE ASSURANCE OF AMERICA, INC.]

   
                                February 9, 1999
    



Board of Directors
Sage Life Assurance of America, Inc.
300 Atlantic Street
Stamford, CT 06901

         To The Board Of Directors:

   
         In my capacity as Vice President, Legal and Compliance of Sage Life
Assurance of America, Inc. (the "Company"), I have supervised the preparation of
Pre-Effective Amendment No. 2 to the registration statements on Form N-4 of the
Sage Variable Annuity Account A (File No. 333-44751) (the "Account"), to be
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933 and the Investment Company Act of 1940.  Such
registration statement describes certain flexible payment deferred combination 
fixed and variable annuity contracts which will participate in the Account.
    

         I am of the following opinion:

         1.      The Company has been duly organized under the laws of the
                 State of Delaware and is a validly existing corporation.

         2.      The variable annuity contracts, when issued in accordance 
                 with the prospectus contained in the aforesaid registration 
                 statement and upon compliance with applicable local law, will 
                 be legal and binding obligations of the Company in accordance 
                 with their terms.

         3.      The Account is duly created and validly existing as separate
                 accounts of the Company pursuant to Delaware law.

         4.      The assets held in the Account equal to the reserves and
                 other contract liabilities with respect to the Account will
                 not be chargeable with liabilities arising out of any other
                 business the Company may conduct.

         In arriving at the foregoing opinion, I have made such examination of
law and examined such records and other documents as in my judgment are
necessary or appropriate.

<PAGE>   2
   
[SAGE LIFE ASSURANCE OF AMERICA, INC.]
February 9, 1999
Page 2
    





         I hereby consent to the filing of this opinion as an exhibit to the
aforesaid registration statement and to the reference to me under the caption
"Legal Matters" in the Statement of Additional Information contained in said
registration statement.

                                           Very truly yours,



                                           /s/ James F. Bronsdon
                                           ---------------------
                                           James F. Bronsdon
                                           Vice President, Legal and Compliance



<PAGE>   1
                                                                   EXHIBIT 9(ii)

[SUTHERLAND ASBILL & BRENNAN LLP]



                   CONSENT OF SUTHERLAND ASBILL & BRENNAN LLP

   
We consent to the reference to our firm under the heading "Legal Matters" in
the Statement of Additional Information included in Pre-Effective Amendment No.
2 to the Registration Statement on Form N-4 for certain flexible payment
deferred combination fixed and variable annuity insurance contracts issued
through The Sage Variable Annuity Account A of Sage Life Assurance of America,
Inc. (File No. 333-44751).  In giving this consent, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.
    

                                         SUTHERLAND ASBILL & BRENNAN LLP




                                         /s/  Stephen E. Roth, Esq.
                                         --------------------------------------
                                         Stephen E. Roth, Esq.



   
Washington, D.C.
February 9, 1999
    


<PAGE>   1

                                                                    EXHIBIT (10)



                        CONSENT OF INDEPENDENT AUDITORS


   
We consent to the reference to our firm under the caption "Experts" in the 
Prospectus and to the use of our report dated April 22, 1998, with respect to 
the financial statements of Sage Life Assurance of America, Inc. included in the
Pre-Effective Amendment No. 2 to the Registration Statement (Form N-4, Nos. 333-
44751 and 811-08581) and related Prospectus for the registration of its variable
annuity contracts.
    



                                                        /s/ Ernst & Young LLP
                                                        -----------------------
                                                        Ernst & Young LLP

   
Stamford, Connecticut                                        
February 10, 1999
    


<PAGE>   1
                                                                   EXHIBIT 14(d)

                               POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that H. LOUIS SHILL, whose signature appears 
below, hereby constitutes and appoints MITCHELL R. KATCHER and JAMES F. 
BRONSDON, and each of them, as his attorney-in-fact, with full power of 
substitution and resubstitution, for him and in his name, place, and stead, 
in any and all capacities, to sign any registration statement and amendments 
thereto, under the Securities Act of 1933 and the Investment Company Act of 
1940, where applicable, executed on behalf of Sage Life Assurance of America, 
Inc. (the "Company") in connection with (a) flexible payment deferred 
combination fixed and variable annuity contracts issued by the Company through 
The Sage Variable Annuity Account A, and (b) modified single payment 
combination fixed and variable life insurance contracts issued by the Company 
through The Sage Variable Life Account A, and to file the same, with exhibits 
thereto and other documents in connection therewith, with the Securities and 
Exchange Commission. H. LOUIS SHILL hereby ratifies and confirms all that said 
attorney-in-fact, or his substitute, may do or cause to be done by virtue 
thereof.

                                                   /s/ H. LOUIS SHILL
                                                   ----------------------------
                                                   H. Louis Shill
                                                   Director
                                                   Sage Life Assurance Company
                                                     of America, Inc.


February 8th, 1999

State of Connecticut
County of Fairfield

    On this 8th day of February, 1999, before me came H. LOUIS SHILL, Director 
of Sage Life Assurance of America, Inc., to me known, and signed the above 
Power of Attorney on behalf of Sage Life Assurance of America, Inc.


                                            /s/ CYNTHIA WENDT          [SEAL]
                                            ---------------------------
                                                    Notary Public
                
                                            My Comm. Exp: 4/30/99

<PAGE>   1
                                                                   EXHIBIT 14(e)

                               POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that MITCHELL R. KATCHER, whose signature
appears below, hereby constitutes and appoints JAMES F. BRONSDON as his
attorney-in-fact, with full power of substitution and resubstitution, for him
and in his name, place, and stead, in any and all capacities, to sign any
registration statement and amendments thereto, under the Securities Act of 1933
and the Investment Company Act of 1940, where applicable, executed on behalf of
Sage Life Assurance of America, Inc. (the "Company") in connection with (a)
variable annuity contracts issued by the Company through The Sage Variable
Annuity Account A, and (b) variable life insurance contracts issued by the
Company through The Sage Variable Life Account A, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. MITCHELL R. KATCHER hereby ratifies and
confirms all that said attorney-in-fact, or his substitute, may do or cause to
be done by virtue thereof.

                                                   /s/ MITCHELL R. KATCHER
                                                   ----------------------------
                                                   Mitchell R. Katcher
                                                   Director
                                                   Sage Life Assurance Company
                                                     of America, Inc.


January 26, 1999

State of Connecticut
County of Fairfield

    On this 26th day of January, 1999, before me came MITCHELL R. KATCHER, 
Director of Sage Life Assurance of America, Inc., to me known, and signed the
above Power of Attorney on behalf of Sage Life Assurance of America, Inc.


                                            /s/ CYNTHIA WENDT          [SEAL]
                                            ---------------------------
                                                    Notary Public
                
                                            My Comm. Exp: 4/30/99


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission