SAGE LIFE ASSURANCE OF AMERICA INC, S-1, 1998-01-22

SAGE LIFE ASSURANCE OF AMERICA INC
S-1, 1998-01-22

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<PAGE> 1
As filed with the Securities and Exchange Commission on January 22, 1998

File No. 333-____

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM S-1

Registration Statement Under
the Securities Act of 1933

SAGE LIFE ASSURANCE OF AMERICA, INC.

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
Delaware 51-0258372
- ------------------------------- ---------------------------------------

(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
</TABLE>

63
-------------------------------------------------------
(Primary Standard Industrial Classification Code Number)

300 Atlantic Street
Suite 302
Stamford, CT 06901
(203) 324-6338
(Address, including zip code, and telephone
number, including area code, of registrant's principal
executive offices)

James F. Bronsdon
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. 20004-2404

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

<PAGE> 2

Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of the registration statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box:

CALCULATION OF REGISTRATION FEE

<TABLE>
=====================================================================================================
Title of Proposed Proposed
Each Class Maximum Maximum
Of Securities Amount Offering Aggregate Amount Of
To Be To Be Price Per Offering Registration
Registered Registered Unit Price Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Flexible Payment
Deferred
Combination
Fixed and
Variable Annuity
Contracts * * $338,900 $100
=====================================================================================================
</TABLE>

* The proposed maximum aggregate offering price is estimated solely for
determining the registration fee. The amount to be registered and the proposed
maximum offering price per unit are not applicable since the securities are not
issued in predetermined amounts or units.

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file 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 this registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), shall
determine.

<PAGE> 3

CROSS REFERENCE SHEET
Pursuant to Regulation S-K, Item 501(b)

ITEM OF FORM S-1

<TABLE>
PROSPECTUS CAPTION

<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus............................... Outside Front Cover

2. Inside Front and Outside Back Cover
Pages of Prospectus.................................................. Summary; Table of Contents

3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges................................... Outside Front Cover;
Profile; What are my investment
options?

4. Use of Proceeds ..................................................... Additional Information About Sage
Life Assurance of America, Inc.

5. Determination of Offering Price...................................... Not Applicable

6. Dilution ............................................................ Not Applicable

7. Selling Security Holders ............................................ Not Applicable

8. Plan of Distribution................................................. What other information should I
know?

9. Description of Securities to be Registered........................... Description: Profile, What are the
Contracts? What are my income
payment options? What are my
investment options? What are the
expenses under the Contract? What
other information should I know?

10. Interests of Named Experts and Counsel............................... N/A
</TABLE>

<PAGE> 4

<TABLE>
<S> <C>
11. Information with Respect to the Registrant........................... What other information should I
know? What are my investment
options? Additional information
about Sage Life Assurance of
America, Inc.

12. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities....................... Item 14 of Part II
</TABLE>

<PAGE> 5

PROFILE DATED _________________________, 1998
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.

The Contract is designed 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.

Through our Variable Account you can invest in up to __ different
investment portfolios (each a "Fund"). These Funds, listed in Section 4, are
professionally managed and allow for 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, we guarantee 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
access amounts in the Fixed Account before the end of a guarantee period you
have chosen, we may apply a Market Value Adjustment. This Adjustment reflects
the differences between the guaranteed interest rates in effect at the time of
your allocation to the Fixed Account and the time you make a premature surrender
or withdrawal. The Market Value Adjustment may result in an increase or decrease
in the amounts surrendered or accessed.

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

<PAGE> 6

Very importantly, both the Fixed and Variable Accounts are considered
separate investment accounts of Sage Life. As a result, assets supporting your
allocations to these Accounts have an important safety feature. They cannot be
charged with liabilities arising out of any other business we may conduct.

The Contract also provides your beneficiary with a death benefit.

In addition, the Contract provides you with various options to access
your Account Value through income payments that are guaranteed, or income
payments that vary with underlying investment performance, or a combination of
both.

Like all deferred annuity contracts, this Contract has two phases: the
savings, or accumulation phase; and the payout, or income phase.

During the accumulation phase, earnings grow tax-free until withdrawn.
Once withdrawn they are taxed as income. If you withdraw money before you are 59
1/2 years old, you may have to pay an additional 10% IRS tax penalty.

The income phase begins when you inform us you want to start receiving
regular income payments under the various income plans we offer.

2. WHAT ARE MY INCOME PAYMENT OPTIONS?

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

You can choose from five different income plans:

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.

<PAGE> 7

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 income payments for which you and the Annuitant are
eligible.

In explaining the income plans we are assuming that you designate
yourself as the Annuitant. Of course, you can designate someone other than
yourself as Annuitant.

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, transfers among your investment choices will be limited.

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

The amount of Account Value you apply to provide variable income payments
will be allocated to the Variable Account and invested in the investment
portfolios you select. The amount of each income payment will vary according to
the investment performance of those portfolios.

3. HOW DO I PURCHASE A CONTRACT?

In most cases you may purchase a Contract with $5,000 or more through one
of our authorized agents.

For tax-qualified Contracts (like IRAs) we require only $2,000, but, of
course, for rollovers you always have the flexibility to invest more.

In addition, you can add $250 or more to your Contract at any time during
the accumulation phase.

4. WHAT ARE MY INVESTMENT OPTIONS?

There are __ investment options under the Contracts. 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 ___ investment portfolios that are described in
the prospectuses for the funds:

- The Alger American Fund
* Income & Growth
* Growth
* Small Capitalization

<PAGE> 8

These investment portfolios do not provide any performance guarantees and
therefore their value 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 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 can choose periods of 1, 2, 3, 4, 5, 7 and 10
years. However, if you decide to surrender your Contract or access amounts
before the end of a period you have chosen, we may apply a Market Value
Adjustment.

5. WHAT ARE THE EXPENSES UNDER THE CONTRACT?

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

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

Administration Charge - During the first seven Contract Years, if, at
the time of deduction, your Account Value is less than $50,000, we will deduct a
$40 administration charge.

Asset-Based Charges - Asset-Based Charges for mortality and expense
risks and for certain administrative costs are deducted monthly from the amount
allocated to the Variable Account. These charges are equal on an annual basis to
1.40%, decreasing to 1.25% after the seventh Contract Year.

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

Fund Charges - There are also Fund charges that are based on the average
daily value of your money invested in the investment portfolios. These charges
range on an annual basis from 0.____% to 0.____%, 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 administration charge;

eliminate the purchase payment tax charge; and

reduce Asset-Based Charges.

This means more of your investment is working for you!

<PAGE> 9

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

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

Alger American Fund One Year Ten Years
- ------------------- -------- ---------
<S> <C> <C> <C> <C> <C>
Income and Growth 1.40% .81% 2.21% $____ $____

Small Capitalization 1.40% .88% 2.28% $____ $____

Growth 1.40% .79% 2.19% $____ $____

___________________ ____% ____% ____% $____ $____

___________________ ____% ____% ____% $____ $____
</TABLE>

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

The column "Total Annual Insurance Charges" shows the total of the
annual administration charge (for purposes of the chart it is
assumed to be 0.___% of the value of an average Contract) and the
Asset-Based Charges.

The column "Total Annual Fund Charges" shows the charges for each Fund.
The charges shown for [each] Fund reflect the fact that the
investment adviser to [each] Fund has agreed to bear the expenses
incurred by the ______________, other than the investment advisory
fee, that exceed 0.___% of that Fund's average daily net assets.
These expense limitations are voluntary and may be terminated by an
adviser at any time.

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

The next two columns show you examples of the charges, in dollars, you
could pay under a Contract for each $1,000 you invest when you
purchased the Contract. The examples assume the average Account
Value is $30,000 and that your Contract earns 5% annually before
charges.

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

6. HOW WILL MY INVESTMENT IN THE CONTRACT BE TAXED?

During the accumulation phase, your earnings are not taxed until you take
them out. If 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 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.

<PAGE> 10

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

7. HOW DO I ACCESS MY MONEY?

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 the Contract and take the proceeds as a single lump
sum payment or apply the proceeds to an income plan.

You can take withdrawals using our systematic partial withdrawal option.

Keep in mind that amounts you surrender or withdraw may be subject to a
Market Value Adjustment if the amounts are taken from the Fixed Account. If you
are younger than 59 1/2 when
you take money out, you may be charged a 10% tax penalty.

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

8. HOW IS CONTRACT PERFORMANCE PRESENTED?

As of the date of this Profile, the Variable Account had not commenced
operations. However, certain of the Funds had commenced operations prior to the
date of this Profile. For those Funds, non-standard performance data is shown.

Non-standard performance data is data that reflects the past performance
of the Funds as adjusted for the Contract expenses and deductions discussed
above, except for the purchase payment tax charge. If applied, this charge would
reduce the performance figures shown.

Please remember that past performance is not a guarantee of future
results.

<PAGE> 11

</TABLE>

9. DOES THE CONTRACT HAVE A DEATH BENEFIT?

If you die during the accumulation phase, we will pay a death benefit to your
designated beneficiary. The amount of the death benefit will be the greatest of
the following:

the current Account Value on the date we receive due 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
Market Value Adjustment incurred); or

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

The anniversary value is equal to the Account Value of your Contract on a
Contract Anniversary, increased by the dollar amount of any additional purchase
payments you have invested since that Contract Anniversary and reduced
proportionately by any withdrawals (including any associated Market Value
Adjustments incurred) you have taken since that anniversary.

10. WHAT OTHER INFORMATION SHOULD I KNOW?

The Contract has several additional features:

FREE-LOOK RIGHT: You have the right to return the Contract to us at
our Customer Service Center or to the agent 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).

<PAGE> 12

If you exercise this right, we will cancel the Contract as of the 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
greater and required by the law of your state, your initial purchase payment
(less any withdraws previously taken). In some states, if you allocated amounts
to the Variable Account, those amounts will be allocated to the Money Market
Fund until the Period expires.

DOLLAR-COST AVERAGING PROGRAM: An optional Dollar-Cost Averaging
Program permits you to transfer a set dollar amount systematically from the
Money Market Fund and/or the Fixed Account to any other investment portfolio,
subject to certain limitations. By investing the same dollar 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 investment portfolio 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.

ASSET ALLOCATION PROGRAM: An optional Asset Allocation Program helps
if you do not wish to make your own particular investment decisions. This
investment planning tool is designed to find an optimal asset mix that attempts
to achieve the highest expected return based upon your tolerance for risk, and
consistent with your needs and objectives. This program was designed in
conjunction with Ibbotson and Associates, one of the nation's premier providers
of asset allocation consulting services.

AUTOMATIC PORTFOLIO REBALANCING PROGRAM: An optional Automatic
Portfolio Rebalancing Program can help prevent a sensible well-conceived
investment strategy from becoming diluted over time. Investment performance will
likely cause your investment percentages 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 (888) 502-7243, or contact an authorized
agent. The address of our Customer Service Center office is P.O. Box ____,
Wethersfield, CT____.

<PAGE> 13

PROSPECTUS DATED ___________, 1998
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 P.O. Box _____
Stamford, CT 06901 Wethersfield, CT ____
Telephone: (888) 502-7243 (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 (the "Contracts") offered by Sage Life Assurance
of America, Inc. ("we," "us," "our," or the "Company"). The Contracts are
designed 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, an Owner of a Contract determines the amount
and timing of additional purchase payments.

An Owner may allocate purchase payments and transfer Account Value to
The Sage Variable Annuity Account A (the "Variable Account") and also to The
Sage Fixed Interest Account A (the "Fixed Account") within certain limits. The
Variable Account is divided into ___Sub-Accounts (each, a "Variable
Sub-Account").

Each Variable Sub-Account invests in a corresponding investment
portfolio (each, a "Fund") of The Alger American Fund, ____, ____, or ___
(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. These prospectuses should be read in conjunction
with this prospectus.

The Account Value will vary daily as a function of the investment
performance of the Variable Sub-Accounts and any interest credited under our
Fixed Account. The Company does not guarantee any minimum Account Value for
amounts allocated to the Variable Account. Amounts allocated to the Fixed
Account are guaranteed a minimum fixed rate of interest for specified periods of
time. However, amounts withdrawn, surrendered, transferred, or applied to an
income plan from the Fixed Account may be subject to a Market Value Adjustment,
the operation of which may increase or decrease such amounts. The Contracts
provide additional benefits, including five income plan options, a death benefit
upon any Owner's death before the

<PAGE> 14

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 a prospective purchaser ought to
know before purchasing a Contract. This prospectus should be read carefully and
retained for future reference.

Additional information about the Contracts and the Variable Account
is contained in the Statement of Additional Information, which has been filed
with the Securities and Exchange Commission. The Statement of Additional
Information 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. You may obtain a copy of the Statement of
Additional Information free of charge by writing to or calling us at our
Customer Service Center at the address or phone number shown above.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. 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> 15

TABLE OF CONTENTS

<TABLE>
<S> <C>
INDEX OF TERMS ......................................................................................

FEE TABLE............................................................................................

EXAMPLE..............................................................................................
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.......................................................................
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 the Contract?
Surrender Charges...............................................................
Annual Administration Charge....................................................
Transfer Charge ................................................................
Asset-Based Charges.............................................................
Fund Expenses...................................................................
6. How will my investment in the Contract be taxed?
Introduction....................................................................
Tax Status of the Contracts.....................................................
Diversification Requirements..........................................
Required Distribution.................................................
Tax Treatment of Annuities......................................................
In General............................................................
Taxation of Non-Qualified Contracts.............................................
</TABLE>

<PAGE> 16

<TABLE>
<S> <C>
Non-Natural Person....................................................
Withdrawals...........................................................
Penalty Tax on Certain Withdrawals....................................
Income Payments.......................................................
Taxation of Death Benefit Proceeds....................................
Transfers, Assignments of a Contract..................................
Withholding...........................................................
Multiple Contracts....................................................
Taxation Of Qualified Contracts.................................................
Withdrawals...........................................................
Individual Retirement Annuities.......................................
Simple IRAs...........................................................
Roth IRAs.............................................................
Other Tax Consequences..........................................................
7. How do I access my Money?
Withdrawals.....................................................................
Surrenders......................................................................
Systematic Partial Withdrawal Program...........................................
IRA Partial Withdrawal Option...................................................
Requesting Payments.............................................................
8. How is Contract Performance Presented?
9. Does the Contract have a Death Benefit?
Death Benefit...................................................................
Proof of Death............................................................................
10. What other Information should I know?
Sage Life Assurance of America, Inc.............................................
The Sage Variable Annuity Account A.............................................
The Sage Fixed Interest Account A...............................................
Voting of Fund Shares...........................................................
Modification....................................................................
Distribution of the Contacts....................................................
Experts.........................................................................
Legal Matters...................................................................
Legal Proceedings...............................................................
Reports to Contract Owners......................................................
Assignment......................................................................
Change of Owner, Beneficiary, or Annuitant......................................
Misstatement and Proof of Age,
Sex, or Survival................................................................
Incontestability................................................................
Participation...................................................................
Authority to Make Agreements....................................................
Financial Statements............................................................
11. How can I make Inquiries?
</TABLE>

<PAGE> 17

ADDITIONAL INFORMATION ABOUT SAGE LIFE ASSURANCE OF AMERICA, INC.

<TABLE>
<S> <C>
History and Business......................................................................
Selected Financial Data.........................................................
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................................
Competition.....................................................................
Transactions with Sage Insurance Group..........................................
Employees.................................................................................
Properties................................................................................
State Regulation..........................................................................
Directors and Executive Officers..........................................................
</TABLE>

FINANCIAL STATEMENTS OF SAGE LIFE ASSURANCE OF AMERICA, INC.

STATEMENT OF ADDITIONAL INFORMATION

APPENDIX A

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

iii

<PAGE> 18

INDEX OF TERMS
- --------------------------------------------------------------------------------

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

Accumulation Period - The Accumulation Period 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 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 Federal holidays,
and any day on which the Securities and Exchange Commission ("SEC") requires
that mutual funds, unit investment trusts or other investment portfolios be
valued.

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

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

<PAGE> 19

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.

Expiry Date - The Expiry Date is the last day in a Guarantee Period.

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 not under
federal securities laws) into which purchase payments may be allocated or
Account Value may be transferred.

Fixed Account Value - The Fixed Account Value is the sum of the value of each
Fixed Sub-Account on any particular date.

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 - The Guaranteed Interest Rate is the effective annual
interest rate that we 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 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 the Owner selects for income payments
under a Contract to commence.

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 withdrawals or transfers, whether in whole or in
part, or amounts applied to an income plan, from a Fixed Sub-Account before the
end of a Guarantee Period.

Net Asset Value - Net Asset Value is the price of one share of an investment
portfolio.

<PAGE> 20

Owner - 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 a 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 determination
if an emergency exists, making disposal of or fair valuation of assets in the
Variable Account not reasonably practicable, or 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 maybe transferred.

Variable Account Value - Variable Sub-Account Value is the sum of the value of
each Variable Sub- Account.

Variable Sub-Account - A Variable Sub-Account is a division of the Variable
Account which invests in shares of a particular investment portfolio.

Variable Sub-Account Charges - Variable 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.

<PAGE> 21

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

<TABLE>
<S> <C>
Sales Load Imposed on Purchases (as a percentage of purchase payments)...................................None

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

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

Annual Administration Charge(2)...........................................................................$40
</TABLE>

In addition, the amount of any state and local taxes levied by any governmental
entity on purchase payments may be deducted from 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 a
purchase payment tax charge.

VARIABLE ACCOUNT MONTHLY EXPENSES(3) (as a percentage of the Variable Account
Value)

<TABLE>
<CAPTION>
Contract Years
-----------------------------
<S> <C> <C>
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%
</TABLE>

- --------

1/ There is no transfer charge. However, we reserve the right to charge $25 per
transfer after - the first 12 transfers in a Contract Year.

2/ The Annual Administration Charge is waived on and after the eighth Contract
Anniversary, or if the Account Value is at least $50,000 on the date of
deduction.

3/ The Asset-Based Charges are called Variable Sub-Account Charges and are
deducted on a daily basis after the Income Date. See "What are the Expenses
under the Contract?" on page __.

<PAGE> 22

FUND ANNUAL EXPENSES (as a percentage of average daily net assets)

<TABLE>
<CAPTION>
Management Other Expenses (after Total Annual
Fee expense limitation)(4) Expenses

<S> <C> <C> <C>
The Alger American Fund
- -----------------------
Income and Growth 0.__% 0.__% 0.__%
Small Capitalization 0.__% 0.__% 0.__%
Growth 0.__% 0.__% 0.__%

0.__% 0.__% 0.__%
________________
0.__% 0.__% 0.__%
________________
0.__% 0.__% 0.__%
________________
</TABLE>

EXAMPLE

The purpose of the following Example is to demonstrate the expenses
that you would pay on a $1,000 investment in the Variable Account. The Example
is calculated 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
the Contract?" beginning on page __ of this prospectus, and see the prospectuses
for the Trusts. The Example assumes that the average Account Value is $30,000.
The Example assumes you have invested all your money in the Variable Account.

<TABLE>
<CAPTION>
You would pay the following
expenses on a $1,000 initial purchase
payment, assuming a 5% annual 1. If you surrender or annuitize 2. If you do not surrender
return on assets and the charges your Contract at or annuitize your Contract at
listed in the Fee Table above the end of each time period the end of each time period

1 Year 3 Years 1 Year 3 Years
The Alger American Fund
- -----------------------
<S> <C> <C> <C> <C>
Income and Growth $___ $___ $___ $___
Small Capitalization $___ $___ $___ $___
Growth $___ $___ $___ $___

_________________ $___ $___ $___ $___
_________________ $___ $___ $___ $___
_________________ $___ $___ $___ $___
</TABLE>

- --------

4/ Absent this expense limitation, estimated Other Expenses for the
_________________, would be _________________, respectively. Other Expenses for
the ___, ___, and ___ [new funds] are based on estimated amounts for the current
fiscal year. Other Expenses for the ___, ___, and ___ [old funds] are based on
amounts actually incurred for the prior fiscal year. Other Expenses also reflect
the fact that the investment adviser to the ___, ___, ___, ___ [Funds] have
agreed to bear the expenses incurred by each Fund, other than the investment
advisory fee, that exceed ____% of such Fund's average daily net assets. These
expense limitation arrangements are voluntary and can be eliminated by the
investment adviser at any time.

<PAGE> 23

The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In addition,
purchase payment tax charges are not reflected. These taxes 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 and should not be
considered a representation of past or future annual returns, which may be
greater or less than this assumed rate.

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. The Contracts are
designed for use in 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.

Under the terms of the Contracts, we promise to pay you (or the
Annuitant, if the Owner is other than an individual) income payments after the
Income Date. Until the Income Date, you may pay additional purchase payments
under the Contracts, and will generally not be taxed on increases in the value
of your Contract as long as you do not take distributions. When you use the
Contracts 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 investment in the Contracts be taxed?"
on page _. The Contracts may not be available in all states.

When you make purchase payments, you can allocate those purchase
payments to one or more of the ___ 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. The total of the values in each
Variable Sub-Account is called the Variable Account Value.

You can also allocate purchase payments to our Fixed Account. See
"Fixed Account Option, " page ___. The Fixed Account includes Fixed Sub-Accounts
that 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 Expiry 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 Expiry Date may 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 request that we 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 __.

<PAGE> 24

Sage Life offers other variable annuity contracts which also invest in
the same Funds offered under the Contracts. These contracts may have different
charges that could affect Variable Sub- Account performance, 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 value to apply to a variable or fixed
income option.

On the Income Date, the Account Value under the Contract will be used
to provide income payments. Unless you request otherwise, any money that you
have invested in the Variable Sub- Accounts will be used to provide variable
annuity income payments, and any money that you have invested in the Fixed
Sub-Accounts will be used to provide fixed annuity 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 income payment 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
income payable during the lifetime of the Annuitant with the
provisions that payments be made for a minimum of 10 or 20 years,
as elected.

- INCOME PLAN 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY. An income
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

<PAGE> 25

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 payment period. If
you told us you want variable income payments, the amount of variable income
payments will vary according to the investment performance of the Funds you have
selected to support your variable annuity income payments.

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. The Contract may be purchased for use in
connection with tax-qualified plans, or it may be purchased on a non-tax
qualified basis. To purchase a non-tax qualified Contract, you may not be more
than 85 years old on the Contract Date. (You may not be more than 75 years old
in Pennsylvania.) To purchase a tax-qualified Contract, you must not be older
than 70 1/2 years old on the Contract Date. A minimum initial purchase payment
is required depending on whether you are purchasing a tax-qualified or non-tax
qualified Contract, as shown in the following table:

<TABLE>
<CAPTION>
Minimum Initial Purchase Payment Required

<S> <C>
Non-Tax Qualified Contract $5,000
Tax Qualified Contract $2,000
</TABLE>

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
your Contract is issued 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 expires 10 days after you
receive your Contract. Some states may require a longer period. If you decide to
cancel the Contract, you must return it to our Customer Service Center or to one
of our authorized agents. You will receive a refund of your Account Value plus
any annual administration charge, transaction charge and Asset-Based Charge we
have deducted on or before the date we receive your returned Contract, or if
greater and required by the law of your state, your initial purchase payment
(less any withdraws previously taken). In certain states, amounts you allocate
to the Variable Account will be allocated to the Money Market Sub- Account until
the Free-Look Period expires.

<PAGE> 26

MAKING ADDITIONAL PURCHASE PAYMENTS. You may make additional purchase
payments of $250 or more at any time before the Income Date, subject to
following conditions. We will accept additional purchase payments under a
non-qualified plan 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 plan until the year in which you attain
701/2, except 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. Any purchase payment received after the Contract Date will
be credited to the Contract as of the Business Day on which it is received 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 made
a full withdrawal 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 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 Account be invested in the Money Market Fund during the Free-Look
Period. We may require this if the law of your state requires us to refund your
full initial purchase payment should you cancel your Contract during the
Free-Look Period. At the end of the Free-Look Period, if your initial purchase
payment was 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 purpose of processing transfers from the
Money Market Fund, we will deem the Free-Look Period to end 15 days after the
Contract Date. The 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 ___
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.

<PAGE> 27

The Alger American Fund

ALGER AMERICAN INCOME AND GROWTH PORTFOLIO. This portfolio seeks to
provide a high level of dividend income through investing in equity securities.
Capital appreciation is a secondary objective of this portfolio.

ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO. This portfolio 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.

ALGER AMERICAN GROWTH PORTFOLIO. This portfolio seeks long-term capital
appreciation by investing primarily in equity securities of companies that, at
the time of purchase, have total market capitalization of $1 billion or greater.

The Alger American Fund is advised by Fred Alger Management, Inc.

The ____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

The MONEY MARKET FUND seeks to maximize current income to the extent
consistent with the preservation of capital and maintenance of liquidity. This
Fund will pursue its objective by investing exclusively in high quality money
market instruments. AN INVESTMENT IN THE MONEY MARKET FUND IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT. This Fund will attempt to maintain a
stable net asset value of $1.00 per share, BUT THERE CAN BE NO ASSURANCE THAT
THE FUND WILL BE ABLE TO DO SO.

The MONEY MARKET FUND is advised by __________.

Shares of the Funds are sold to separate accounts of insurance companies
that are not affiliated with us or each other, a practice known as "shared
funding." They are also 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

<PAGE> 28

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 Fund's prospectus.

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

FIXED ACCOUNT INVESTMENT OPTIONS. The Fixed Account is a separate
investment account under state insurance law, and is not required to be
registered as an investment company under the 1940 Act. It is maintained
separate from our general account and any other separate investment account we
may have.

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"). 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 correspond to, interest rates
available on fixed income investments which 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 United States Government or its
agencies or instrumentalities, which issues may or may not be guaranteed by the
United States 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.
We will also consider other factors in determining the Guaranteed Interest
Rates, including regulatory and tax requirements, sales commissions, and
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 GUARANTEE INTEREST RATES WILL BE AT LEAST
3% PER YEAR.

<PAGE> 29

The length of a Guarantee Period is measured from the end of the
calendar month in which the amount is allocated to the Fixed Sub-Account. The
currently available Guarantee Periods are 1, 2, 3, 4, 5, 7, and 10 years.

We will notify you at least thirty days prior to an Expiry Date of
your options for renewal which include (i) electing a new Guarantee Period from
among those then offered by us, but excluding any which extend beyond your
Income Date, or (ii) transferring the value of the Fixed Sub-Account to one or
more Variable Sub-Accounts. If we do not receive Satisfactory Notice prior to
the Expiry Date, we will transfer the value of the expiring Fixed Sub-Account to
the Money Market Sub-Account.

A Market Value Adjustment may apply to amounts allocated to a Fixed
Sub-Account in certain situations. See "Market Value Adjustment" below.

MARKET VALUE ADJUSTMENT. A Market Value Adjustment reflects the
relationship between: (i) the current Guaranteed Interest Rate that we are
crediting for a Guarantee Period approximately equal to the time remaining in
the Fixed Sub-Account's Guarantee Period from which the amount is surrendered,
withdrawn, transferred, or annuitized; and (ii) the Guaranteed Interest Rate
being applied to the Fixed Sub-Account's Guarantee Period from which the amount
will be surrendered, withdrawn, transferred, or annuitized. Any surrender,
withdrawal, transfer, or application to an income plan of an amount allocated to
a Fixed Sub-Account is subject to a Market Value Adjustment that may be positive
or negative, unless the effective date of the surrender, withdrawal, transfer,
or application to an income plan is on or after the Expiry Date of the Guarantee
Period.

Generally, if the Guaranteed Interest Rate for the selected Guarantee
Period is lower than the Guaranteed Interest Rate currently being offered for
new Guarantee Periods of a duration approximately equal to the balance of the
selected Guarantee Period as of the date that the Market Value Adjustment is
applied, then the application of the Market Value Adjustment will (i) reduce the
amount of the payment upon surrender or application to an income plan (this
amount may be reduced below the amount of the purchase payments or portion of
amounts transferred to the Guarantee Period), and (ii) will reduce the remaining
Account Value on the amount transferred or withdrawn. Similarly, if the
Guaranteed Interest Rate for the selected Guarantee Period is higher than the
Guaranteed Interest Rate currently being offered for new Guarantee Periods of a
duration approximately equal to the balance of the selected Guarantee Period as
of the date that the Market Value Adjustment is applied, then the application of
the Market Value Adjustment will result in the payment, upon surrender,
withdrawal, transfer, or application of amounts to an income plan, of an amount
greater than the amount (or portion thereof) being surrendered, withdrawn,
transferred, or applied to an income plan.

The Market Value Adjustment is computed by multiplying the amount
being surrendered, withdrawn, transferred, or applied to an income plan, by the
following factor:
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;

<PAGE> 30

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; and

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

The Index Rate is the U.S. Treasury Constant Maturity Series as reported in
Federal Reserve Bulletin Release H.15. 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 _________________________________________, 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 = the Guaranteed
Interest Rate for the Guaranteed Period and G = the initial number of days in
the Guarantee Period. In these states, the Fixed Account is called the Interest
Account in the Contract.

Market Value Adjustments will be applied as follows:

For a partial withdrawal or partial transfer, the Market Value
Adjustment will be calculated on the total amount that must be
withdrawn or transferred in order to provide the amount
requested.

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

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

Examples of how the Market Value Adjustment will work 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 after the end of the Free-Look Period. 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 to
be made. Otherwise we will not transfer your Account Value. A transfer from a
Fixed Sub-Account may 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.

<PAGE> 31

A transfer generally will take effect on the Business Day Satisfactory
Notice is received at our Customer Service Center. Requests received on other
than a non-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. See
"Requesting Payments," page _.

We also reserve the right to impose a $25 transfer fee 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 is
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. 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.

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 variable
account or to another variable sub-account.

DOLLAR-COST AVERAGING PROGRAM. The dollar-cost averaging program
permits you to systematically transfer on a monthly basis, or as frequently as
we authorize, a set dollar amount from either the Money Market Sub-Account or a
Fixed Sub-Account to any combination of Variable 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
it is high. Dollar-cost averaging does not assure a profit or protect against a
loss.

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 the 1, 2, 3,
4, or 5 year Guaranteed Period of the Fixed Account, as applicable. 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. Once
elected, it remains in effect from the date we receive your request until the
Income Date or until the value of the Sub-Account from which transfers are being
made is depleted or until you cancel the program by written request. 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 the dollar-cost averaging program at
any time and for any reason. Dollar-cost averaging is not available while you
are participating in the automatic portfolio rebalancing program.

<PAGE> 32

ASSET ALLOCATION PROGRAM. You may select from four asset allocation model
portfolios designed by Ibbotson and Associates. These models are as follows:

<TABLE>
<CAPTION>
Model Investment and Risk Profile
----- ---------------------------
<S> <C>
1 Capital Preservation
2 Moderate Growth
3 Growth
4 Aggressive Growth
</TABLE>

If you elect to participate in the asset allocation program, initial and
additional purchase payments will automatically be allocated among the Variable
Sub-Accounts indicated by the model you select. 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. You may use a questionnaire that
we offer to determine the model that best meets your risk tolerance and time
horizons.

From time to time Ibbotson and Associates reviews the models and may
find that allocation percentages among the Variable Sub-Accounts or even some of
the Variable Sub-Accounts within a particular model may need to be changed. We
will send you notice at least 30 days before any such change is made.

None of the models include the Fixed Account. However, you may
allocate a portion of your initial or additional purchase payments, or transfer
Account Value between an asset allocation model and the Fixed Account.

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 option. 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
percentage allocations. 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 percentage allocations 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 option. A transfer under this option 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. [The
automatic portfolio rebalancing program is not available while you are
participating in the dollar-cost averaging program].

ACCOUNT VALUE. The Account Value serves as a starting point for
calculating certain values under a Contract. It is the aggregate of the Variable
Account Value and the Fixed Account Value credited to the Contract. The Account
Value is determined first on the Contract Date and

<PAGE> 33

thereafter on each Business Day. The Account Value will vary to reflect the
performance of the Variable Sub-Accounts to which purchase payments have been
allocated, interest credited on amounts allocated to the Fixed Account, charges,
transfers, withdrawals, and full surrenders. It 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 by any applicable Market Value
Adjustment that would be applicable if the Contract were surrendered that day,
and reduced by any applicable annual administration charge.

VARIABLE ACCOUNT VALUE. On any Business Day, the Variable Account
Value is equal to sum of the value in each Variable Sub-Account. The value in
each Variable Sub-Account is equal to the number of Accumulation Units
attributable to that Variable Sub-Account multiplied by the Accumulation Unit
Value for that Variable Sub-Account for that Business Day. When you allocate a
purchase payment or transfer Account Value to a Variable Sub-Account, your
Contract is credited with Accumulation Units in that Variable Sub-Account. The
number of Accumulation Units is determined 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 an amount is
transferred, withdrawn, or surrendered from a Variable Sub-Account, the number
of Accumulation Units is determined by dividing the dollar amount transferred,
withdrawn, or surrendered by the Variable Sub-Account's Accumulation Unit value
for that Business Day.

ACCUMULATION UNIT VALUE. 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. [The Accumulation Unit value for each Variable
Sub-Account was arbitrarily set at $___ when the Sub-Account was established.]
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 Period. The net investment factor for
any Valuation Period is determined by dividing (a) by (b) where:

(a) is the result of:

(i) the Net Asset Value per share of the investment
portfolio share 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 investment portfolio 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

<PAGE> 34

(b) is the Net Asset Value per share of the investment portfolio
share 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 on any particular date. The value of a Fixed
Sub-Account is equal to: (1) the sum of the following amounts: purchase payment
allocations and transfers of Account Value to a Fixed Sub-Account and accrued
interest; minus (2) the sum of any withdrawals and transfers from the Fixed Sub-
Account including any charges assessed against a Fixed Sub-Account.

5. WHAT ARE THE EXPENSES UNDER THE CONTRACT?

We deduct the charges described below. The charges are for the service
and benefits we provide, costs and expenses we incur, and risks we assume under
the Contracts. Services and benefits we provide include: the ability for 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 associated with 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 ___.

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

Charges under a Contract may be reduced or eliminated when certain
sales or administration of the Contract result in savings or reduction of
expenses and/or risks.

SURRENDER CHARGES

None! There are no surrender charges under the Contracts.

ANNUAL ADMINISTRATION CHARGE

We will deduct an annual administration charge 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. The charge will be deducted from each Variable or Fixed
Sub-Account proportionately.

<PAGE> 35

TRANSFER CHARGE

We currently do not deduct this charge However, we reserve the right
to deduct a transfer charge of $25 for the 13th and each subsequent transfer
during a Contract Year. For the purpose of assessing the transfer charge, each
written request is considered to be one transfer, regardless of the number of
Variable Sub-Accounts or Fixed Sub-Accounts affected by the transfer. In the
event that the transfer charge becomes applicable, it will be deducted
proportionately from the Variable Sub-Account(s) or the Fixed Sub-Account(s)
from which the transfer is made.

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:

<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>

Asset-Based Charges also are deducted 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 Fixed
Account Value attributable to a Contract.

FUND EXPENSES

Because the Variable Account purchases shares of the various Funds,
the net assets of the Variable Account will reflect the investment advisory fees
and other operating expenses incurred by the Funds. A table of each Fund's
advisory 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, advisory fees, and
other expenses, see the attached Funds' prospectuses.

<PAGE> 36

6. HOW WILL MY INVESTMENT IN THE CONTRACT BE TAXED?

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX
ADVICE.

INTRODUCTION

The following summary provides a general description of the federal
income tax considerations associated with the Contracts and does not purport to
be complete or to cover all tax situations. THIS DISCUSSION IS NOT INTENDED AS
TAX ADVICE. COUNSEL OR OTHER COMPETENT TAX ADVISERS SHOULD BE CONSULTED FOR MORE
COMPLETE INFORMATION. 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 Contracts may be purchased on a non-tax-qualified basis
("Non-Qualified Contract") or purchased on a tax-qualified basis ("Qualified
Contract"). Qualified Contracts are 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 [and your] tax status. In
addition, certain 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 Contracts comply with applicable law. Therefore, purchasers of
Qualified Contracts should seek competent legal and tax advice regarding the
suitability of a Contract for their situation. The following discussion assumes
that Qualified Contracts are purchased with proceeds from and/or contributions
under retirement plans that qualify for the intended special federal income tax
treatment.

TAX STATUS OF THE CONTRACTS

DIVERSIFICATION REQUIREMENTS. The Code requires that the investments
of the Variable Account be "adequately diversified" in order for the Contracts
to be treated as annuity contracts 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 Contracts, 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 Contracts do not give
Owners investment control over

<PAGE> 37

Variable Account assets, we reserve the right to modify the Contracts 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 Qualified Contracts.

The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.

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, generally will be treated as a distribution.)

TAXATION OF NON-QUALIFIED CONTRACTS

NON-NATURAL PERSON. The Owner of any annuity contract who is not a
natural person generally must include in income any increase in the excess of
the Account Value over the "investment in the contract" (generally, 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 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.

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

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

<PAGE> 38

- 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.

INCOME PAYMENTS. Although tax consequences may vary depending on the
payment option elected under an annuity contract, a portion of each income
payment is generally not taxed and the remainder is taxed as ordinary income.
The non-taxable portion of an income payment is generally 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. Generally, 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 a 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 advisor as to the tax consequences.

WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability. Recipients can
generally 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 QUALIFIED CONTRACTS

The Contracts are 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 limited distributions prior to age 59 1/2
(subject to certain exceptions); distributions that do not conform to specified
commencement and minimum distribution rules; aggregate distributions in excess

<PAGE> 39

of a specified annual amount; and in other specified circumstances. Therefore,
no attempt is made to provide more than general information about the use of the
Contracts 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 shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the Contract, unless the Company
consents.

WITHDRAWALS. When a withdrawal from a Qualified Contract occurs, a
pro rata portion of the amount received is taxable, generally based on the ratio
of the owner's investment in the contract (generally, the purchase payments or
other consideration paid for the contract) to the participant's total accrued
benefit balance under the retirement plan. For Qualified Contracts, the
investment in the contract can be zero. Distributions from certain qualified
plans are generally subject to mandatory withholding. Special tax rules apply to
withdrawals from Roth IRAs (see below).

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. Also, distributions from certain other
types of qualified retirement plans may be rolled over on a tax-deferred basis
into an IRA. Sales of the Contract for use with IRAs may be subject to special
requirements of the IRS. The Internal Revenue Service has not reviewed the
Contract for qualification as an IRA, and has not generally ruled whether death
benefit provisions such as the provisions in the Contract comport with IRA
qualification requirements.

SIMPLE IRAs. Beginning in January 1, 1997, 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% 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. The failure of the SIMPLE IRA to meet Code requirements may result in
adverse tax consequences.

ROTH IRAs. Effective January 1, 1998, 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 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 generally
are not taxed, except that, once aggregate distributions exceed contributions to
the Roth IRA, income tax and a 10% penalty tax may apply to distributions made
(1) before age

<PAGE> 40

59 1/2 (subject to certain exceptions) or (2) during five taxable years starting
with the year in which the first contribution is made to the Roth IRA.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the federal tax
consequences under the Contracts are not exhaustive, and special rules are
provided with respect to other tax situations not discussed in this prospectus.
Further, the federal income tax consequences discussed herein reflect our
understanding of current law, and the law may change. 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.

7. HOW DO I ACCESS MY MONEY?

You may make partial withdrawals or a full surrender under the
Contracts. When you surrender your Contract you can request that the proceeds be
paid under an income plan. See "What are my Income Payment Options?," page __.

WITHDRAWALS

You may request to withdraw part of the 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. See "What are my Income Payment Options?," page _ .) Requests for
withdrawals may be made in writing. See "Requesting Payments," page __. Any
withdrawal must be at least $250. We will pay you the withdrawal amount in one
sum. Under certain circumstances, payments of proceeds from a withdrawal may be
delayed. See "Requesting Payments," page __ .

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

SURRENDERS

You may request surrender of the Contract 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 surrender after the Income Date. See "What
are my Income Payment Options?," page __ .) The Contract will terminate on the
date we receive your request or such later date as you might request. We will
pay you the Surrender Value in one sum unless you choose an income plan. Under
certain circumstances, payments of proceeds from a surrender may be delayed. See
"Requesting Payments," page _ .

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

<PAGE> 41

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 month anniversary of the Contract Date will be used. The minimum
payment is $100. The maximum payment amount is the free withdrawal amount as
defined in your Contract. However, any amount in excess of interest earned on a
Fixed Sub-Account in the prior period (for example, prior month for monthly
withdrawals or prior quarter for quarterly withdrawals), may 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. Unless you specify otherwise,
withdrawals under the systematic partial withdrawal option will be deducted from
your Account Value in the Variable and Fixed Sub-Accounts on a pro-rata basis.
We do not deduct any other charges for this option. We reserve the right to
discontinue offering the systematic partial withdrawal option at any time and
for any reason.

IRA PARTIAL WITHDRAWAL OPTION

If your Contract is an IRA Contract and you will attain age 70 1/2 in
the current calendar year, distribution 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 commence will be sent, and
you may elect this option at that time, or at a later date. The IRA Partial
Withdrawal option may not be elected while you are participating in the
systematic partial withdrawal program. IRA Partial Withdrawals may be taken on a
monthly, quarterly, 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 month anniversary of the
Contract Date will be used. An IRA Partial Withdrawal in excess of the maximum
withdrawal amount for systematic partial withdrawals may be subject to a Market
Value Adjustment.

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 or surrender 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 any jurisdiction in which the Contract is delivered.

<PAGE> 42

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 portfolio of the Funds. THESE FIGURES ARE BASED
ON HISTORICAL EARNINGS AND DO NOT INDICATE OR PROJECT FUTURE PERFORMANCE. 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 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 various periods of time. 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, less all charges and deductions applied against the Variable
Sub-Account, including any surrender charge that would apply if you terminated a
Contract at the end of each period indicated, but excluding any deductions for
purchase payment taxes. "Non-Standard" average annual total return information
may be presented, computed on the same basis as described above, except that
deductions will not include the Surrender Charge. In addition, we may from time
to time disclose average annual total return in 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
Standard & Poor's Index of 500 Common Stocks, a widely used measure of stock
performance. This unmanaged index assumes

<PAGE> 43

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 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?

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

(i) the Account Value determined as of the day we receive proof of
death;

(ii) 100% of the sum of all purchase payments made under your
Contract, reduced by any prior withdrawals (including any associated
surrender charge and 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. Upon our receipt of due proof of death,
we will calculate an anniversary value for each Contract Anniversary prior to
the date of death, but not beyond the deceased's attained age 80. The
anniversary value is equal to the Account Value on a Contract Anniversary and
reduced proportionately by the amount of any withdrawals (including any
associated surrender charge and Market Value Adjustment incurred) taken since
that anniversary, and increased by the dollar amount of additional purchase
payments made since that anniversary. (By reduced proportionately we mean
decreased by the same percentage as the decrease in your Account Value that
results from the withdrawal.)

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 applicable death benefit payable to the Beneficiary.

The death benefit may be paid immediately in one lump sum, or an
income plan may be chosen. See "What are my Income Payment Options?" page ___.
An income plan may be chosen subject to the following conditions:

(1) the Beneficiary becomes the new Owner;

(2) the excess, if any, of the death benefit over the Account
Value will be allocated among the Variable Sub-Accounts and
Fixed Sub-Accounts in proportion to their values as of the
date on which the death benefit is determined;

(3) no additional purchase payments may be applied to the
Contract; and

<PAGE> 44

(4) if the new Owner is not the deceased Owner's spouse, the
entire interest in the Contract, must be distributed in one
of following ways:

a. The entire interest in the Contract must be
distributed over the life of the new Owner, or
over a period not extending beyond the life
expectancy of the new Owner, with distributions
beginning within one year of the Owner's death;
or

b. The entire interest in the Contract must be
distributed within five years of the Owner's
death.

(5) If the Beneficiary 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 (and, 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 date
we receive proof of death at the time of the surviving spouse's death, and the
entire interest in the Contract must be distributed to the new Beneficiary in
accordance with the provisions of 4(a) or 4(b) above.

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

If the death benefit is payable and an income plan is chosen, the
Income Date will be the date we receive due proof of the Owner's death. The
Beneficiary must choose the income plan as well as whether the income payments
are to be fixed or variable or a combination of fixed and variable. See "What
are my Income Payment Options?" page ____.

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

<PAGE> 45

10. WHAT OTHER INFORMATION SHOULD I KNOW?

SAGE LIFE ASSURANCE OF AMERICA, INC. We are a Delaware stock life insurance
company that is wholly owned by Sage Insurance Group, Inc. Our Executive Office
is located at 300 Atlantic Street, Stamford, CT 06901. We were incorporated in
1981 and have been continuously engaged in the life insurance business since
that year. We are subject to regulation by the Insurance Department of the State
of Delaware as well as by the insurance departments of all other states and
jurisdictions in which we do business. We sell insurance in 49 states and the
District of Columbia. We submit annual statements on our operations and finance
to insurance officials in such states and jurisdictions. The Contracts described
in this prospectus have been filed with and, where required, approved by,
insurance officials in those jurisdictions where they are sold.

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 Assurance of America,
Inc.

The Variable Account is divided into Variable Sub-Accounts, each of
which currently invests in shares of a specific Fund of The Alger American Fund,
____, or ____. 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 a Variable Sub-Account are credited to or
charged against that Variable Sub-Account without regard to any other income,
gains or losses of Sage Life Assurance of America, Inc. Assets equal to the
reserves and other Contract liabilities with respect to each Variable
Sub-Account are not chargeable with liabilities arising out of any other
business or account of ours. If the assets exceed the required reserves and
other liabilities, we may transfer the excess to our general account.

The Variable Account may include other Variable Sub-Accounts that are
not available under the Contract and are not otherwise discussed in this
prospectus. We may substitute another Variable Sub-Account or insurance company
separate account under the Contracts, if, in our judgment, investment in a
Variable Sub-Account should no longer be possible or becomes inappropriate to
the purposes of the Contracts, or if investment in another variable sub-account
or insurance company separate account is in the best interest of Owners. No
substitution may take place without notice to Owners and prior approval of the
SEC and insurance regulatory authorities, to the extent required by the 1940 Act
and applicable law.

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. The Fixed Account will not be charged
with liabilities that arise from any other business that we conduct.

<PAGE> 46

We may transfer to our general account assets which exceed the reserves and
other liabilities of the Fixed Account. Notwithstanding the foregoing, our
obligations under (and values and benefits under) the Fixed Account option of
the Contracts do not vary as 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 option of the Contracts. 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. 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

Finplan of America, Inc. ("Finplan"), acts as the distributor
(principal underwriter) of the Contracts. Finplan 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"). Finplan is a
wholly owned subsidiary of Sage Insurance Group, Inc., the Company's parent
corporation. The Company compensates Finplan for acting a principal underwriter
under a distribution agreement. The Contracts are offered on a continuous basis
and the Company does not anticipate discontinuing the offer. The Contracts may
not be available in all states.

<PAGE> 47

The Contracts are sold by broker-dealers through registered
representatives of such broker-dealers who are also appointed and licensed as
insurance agents. These broker-dealers receive commissions for selling Contracts
calculated as a percentage of purchase payments (up to a maximum of 6%).
Broker-dealers who meet certain productivity and profitability standards may be
eligible for additional compensation.

EXPERTS

The statutory basis statements of admitted assets, liabilities and
surplus of Sage Life Assurance of America, Inc. as of [December 31, 1997], and
the related statutory basis statements of income and changes in surplus, and
cash flows for the years then ended, [appearing in the prospectus] have been
audited by [Ernst & Young LLP], independent accountants, whose report thereon is
set forth elsewhere herein, and are included in reliance upon the authority of
such firm as experts in accounting and auditing.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Variable Account is a
party or the assets of the Variable Account are subject. We are not involved in
any litigation that is of material importance in relation to our total assets or
that relates to the Variable Account.

REPORTS TO CONTRACT OWNERS

We maintain the records and accounts of all transactions involving
the Contract, the Variable Account, and the Fixed Account. We will send you a
report at least once each calendar quarter within 31 days of the end of each
calendar quarter showing information about your Contract for the period covered
by the report. We will send you an annual and a semi-annual report for each Fund
underlying a Variable Sub-Account to which you have allocated Account Value, 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 this Contract or 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

<PAGE> 48

acceptance. A change in Owner may be a taxable event and may also effect the
amount of death benefit payable under this Contract.

MISSTATEMENT AND PROOF OF AGE, SEX, OR SURVIVAL

We may require proof of age, sex, or survival of any person 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 which the Account Value applied would have provided for the
correct age and sex. If we have made incorrect income payments, the amount of
any underpayment will be paid immediately. The amount of any overpayment will be
deducted from future income payments.

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 broker, can change the terms of a
Contract or make changes to your Contract without our consent.

FINANCIAL STATEMENTS

The audited statutory basis statements of admitted assets,
liabilities and surplus for the Sage Life Assurance Company of America, Inc. as
of _______, ____ , and the related statutory basis statements of income and
changes in surplus, and cash flows for the years then ended, as well as the
Report of the Independent Accountants, are contained in the Statement of
Additional Information. The financial statements of the Company should be
considered only as bearing on our ability to meet our obligations under the
Contracts. They should not be considered as bearing on the investment
performance of the assets held in the Variable Account.

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

11. HOW CAN I MAKE INQUIRIES?

Inquiries regarding a Contract may be made by writing to us at our
Customer Service Center, by calling us at ____________ (Toll Free), or by
contacting one of our authorized agents.

ADDITIONAL INFORMATION ABOUT SAGE LIFE ASSURANCE OF AMERICA INC.

HISTORY AND BUSINESS

Ownership: Sage Life Assurance of America, Inc ("Company") is
incorporated under the laws of the state of Delaware. The Company is registered
to write general life assurance and fixed and

<PAGE> 49

variable annuity contracts in all states except New York, and also is registered
for variable life assurance business in 29 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"). The Company 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 Investments Inc.), a
Delaware corporation and a subsidiary of Sage Group Limited, which is the
Company's ultimate parent. The Company's name was changed to its present name in
September 1997.

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 the Assumption Reinsurance Agreement,
Fidelity Life's annuity business was irrevocably transferred to Security First
except to the extent that an annuity contract could not be assumption reinsured
as a result of contract holder rejection or failure to consent, where required,
to the assumption reinsurance. As of December 31,1997, the total value of the
contracts not yet assumed by Security Life was less than $300,000. Security
First is now a subsidiary of The Metropolitan Life Insurance Company.

Holding Company Structure and Background: The Company is a wholly
owned subsidiary of Sage Insurance Group which is a holding company for the
Company and affiliated entities connected with the conduct of life and annuity
insurance business in the United States of America. The Company is also an
indirect wholly owned subsidiary of Sage Group Limited, a South African
corporation quoted on the Johannesburg Stock Exchange. Sage Group Limited is a
holding company with a thirty-year history of extensive operating experience in
mutual funds, life assurance, investment management and real estate development.
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.

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 year 1997 due
to the substantial change in the business operations of the Company. The Company
effectively disposed of all in-force business existing as at December 31,1996
and, therefore, on January 1,1997, had no insurance liabilities under any policy
contracts of the Company other than contracts that were 100% reinsured to the
Company's former parent company. Effectively therefore, since January 1997, the
Company became comparable to a new company that had not yet commenced business
activities.

The information summarized below is extracted from the statutory
statements filed with the insurance regulatory authorities, and should be read
in conjunction with the financial statements and notes thereto included in this
prospectus.

<PAGE> 50

Selected Financial Information
For the Fiscal Year Ended December 31, 1997
(In Thousands)

CAPITAL AND SURPLUS

INCOME:

Investment Income

BENEFITS AND EXPENSES:

TAXES

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

INTRODUCTION

The following discussion highlights significant factors influencing
the results of operation of the Company. It should be read in conjunction with
the financial statements and the related notes.

HISTORY AND BUSINESS OVERVIEW

Beginning _______ 1998, the Company plans to commence marketing of
new variable annuity and variable life insurance products for the first time
since all new business production and marketing was ceased in October 1996. The
Company was acquired by Sage Insurance Group on January 16, 1997, and since that
date has been preparing for the recommencement of insurance underwriting and
marketing activities. There has been a total reengineering of the Company's
products, systems and administration since the change of ownership in January
1997 when the Company was acquired by Sage Insurance Group. All of the Company's
current senior management are experienced in the insurance industry and most
have been recruited since January 1997. The ongoing business strategy of the
Company is to confine its activities to the manufacturing and marketing of
variable life insurance and annuity products where the obligations of the
Company under policy contracts are determined by the value of investments held
in separate accounts that are held solely for the purpose of the policy
contracts to which they relate, and may not be used to pay any other obligations
or creditors of the Company.

<PAGE> 51

RESULTS OF OPERATIONS

Owing to the total reorganization of the company's operations
following the cessation of all marketing and other activities in October 1996,
none of the comparable figures for prior years are meaningful in relation to the
Company's ongoing operations and prospects.

Realized net earnings of $___ million for the year ending December
31, 1997.

LIQUIDITY AND CAPITAL RESOURCES

Total Capital and Surplus of the Company at end of 1997 was $
compared to $ 9,500,000 on January 16, 1997. Sage Insurance Group, the new
parent company, increased the available capital and surplus to $25,000,000
during 1997.

SEGMENT INFORMATION

The Company plans to conduct business under the following main
product segments:

- Marketing of variable and fixed deferred annuities sold
on a single premium and flexible premium basis.

- Marketing of variable and fixed immediate annuities

- Marketing of variable life insurance products sold on a
single premium or flexible premium basis.

During 1997 the Company did not conduct any active marketing. Its
main activity during this period was to revise products and re-engineer the
Company's systems and procedures in preparation for the commencement of
marketing during 1998.

REINSURANCE

The Company has entered into a reinsurance agreement on a modified
coinsurance basis with Security First involving insurance in-force on the
purchase date of the Company. The Company also reinsures its mortality risk
associated with the Contract's guaranteed death benefit with one or more
appropriately licensed insurance companies.

RESERVES

In accordance with the life 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 our
contract obligations at their maturities, or the event of the insured's death.
In the financial statements included in this Prospectus all reserves are
determined in accordance with generally accepted accounting and actuarial
principles.

<PAGE> 52

INVESTMENTS

At December 31, 1997, invested assets totaling $_____ million
consisted of $_____ short-term securities and $_____ million of bonds and other
long-term investments. 100% of the portfolio was held in investment grade
securities. It is the stated policy of the Company to refrain from investing in
securities having speculative characteristics.

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 products comparable to those being offered by
the Company. There are approximately 2,350 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 solely of separate account variable annuity and variable life
insurance products.

TRANSACTIONS WITH SAGE INSURANCE GROUP

On November 19, 1997, the Company entered into a Cost Sharing
Agreement (the "Agreement") with Sage Insurance Group. Under this Agreement, the
Company agrees to be charged by Sage Insurance Group for the use of certain
office space and certain office equipment. In addition, the parties agree to
share the cost of certain management, clerical, administrative, technical, or
other services performed for the benefit of the other party.

Pursuant to the foregoing, the Company recorded expenses in 1997 of
_____.

Inter Group indebtedness arising in the normal course of business are
settled quarterly.

Sage Insurance Group has also incurred expenditure in connection with
the costs of establishing new systems, new products and premises for the
Company. Sage Group regards these expenditures as being of a development nature
and does not intend to recover these expenditures from the Company.

EMPLOYEES

Due to the company's business strategy of outsourcing its primary
administrative functions and investment functions to specialist organizations
with expertise in these areas, the number of full-time personnel employed by the
Company will be limited.

As of [February 1, 1998], the Company had [12] employees.

<PAGE> 53

PROPERTIES

The executive office is located at 300 Atlantic Street, in Stamford,
Connecticut, where the Company's primary records are maintained. This office
space is leased by Sage Insurance Group. The Company reimburses Sage Insurance
Group for the office space under the Cost Sharing Agreement that is described
above.

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
includes periodic examination to determine contract liabilities and reserves
that the Insurance Department may certify that these items are correct. The
Company's books and accounts are subject to review by the Insurance Department
at all times. A full examination of the Company's operations is conducted
periodically by the Insurance Department and 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.

<PAGE> 54

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 generally does not directly regulate
the business of insurance, federal initiatives often have an impact on the
business in a variety of ways. Certain 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.

<PAGE> 55

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/ 2/ Director, President, Director, Finplan of America, Inc.
Age 59 Chief Executive 9/97 to present; President, Director
Officer, 1/97 to Sage Insurance Group, Inc. 7/97 to
present present; President, Chief Executive
Officer, Director Sage Management
Services (USA), Inc. 6/96 to present;
President, Chief Executive Officer
Sage Holdings (USA), Inc. 12/95 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/ 2/ Director, 1/97 to Investments Director, Sage Life
Age 32 present Holdings, Ltd. 11/94 to present;
Executive-Strategic Developments
Sage Group Ltd. 11/94 to present;
Partner, Deloitte & Touche 1/89-10/94

H. Louis Shill 3/ 2/ Chairman,
Age 67 1/97 to present Founder, Chairman, Sage Group
Limited 1965 to present.

Paul C. Meyer 4/ Director, Partner, Rogers & Wells
Age 44 1/97 to present

Richard D. Starr 5/ Director, Chairman & Chief Executive Officer,
Age 53 1/97 to present Financial Institutions Group, Inc.
10/78 to present; President, First
Interstate Securities 1/95-12/95

Mitchell R. Katcher 1/ Director, 12/97 to Chief Financial Officer, Finplan of
Age 44 present, Senior America, Inc. 9/97 to present;
Executive Vice Treasurer, Sage Insurance Group, Inc.
President, Chief 7/97 to present; Executive Vice
Financial Officer, President, Golden American Life
Chief Actuary Insurance Company 7/93-2/97;
5/97 to present Consultant, Tillinghast Towers &
Perrin 6/91-7/93.

</TABLE>

<PAGE> 56

1/ The principal business address of these persons is 300 Atlantic Street,
Stamford, CT 06901.

2/ As of February 1, 1998, Mr. Marsden will become the President and Chief
Executive Officer of the Company and Mr. Scowby will become the company's
Chairman. Messrs. Shill, Marsden, and Scowby will remain as directors of the
Company.

3/ Mr. Shill's principal business address is P.O. Box 2255, Johannesburg,
South Africa 2000.

4/ Mr. Meyer's principal business address is 200 Park Avenue, New York,
N.Y. 10166.

5/ 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. Allocations have been made as to each 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 Messrs. Shill, Scowby,
and Marsden.

The following table includes compensation paid by the _______________________
and its subsidiaries for services rendered in all capacities for the years
indicated for the Chief Executive Officer and the next four most highly
compensated Executive Officers as of December 31, 1997.

Annual Compensation

<TABLE>
<CAPTION>
All Other
Name and Principal Position Year Salary Bonus Compensation
<S> <C> <C> <C> <C>

</TABLE>

EMPLOYMENT CONTRACTS

The following persons have employment agreements with the Company or with Sage
Insurance Group Inc.: Ronald S. Scowby (Chairman); Robin I. Marsden (President
and CEO)5; Mitchell R. Katcher (Senior Executive Vice President)

- ----------

5/ As of February 1, 1998, Mr. Scowby will become Chairman and Mr. Marsden
will become President and CEO of the Company.

<PAGE> 57

RETIREMENT PLANS

Sage Life will introduce benefit plans to provide funded, tax
qualified, non-contributory retirement plans for all salaried employees,
including executive officers (the "Retirement Plans") and an unfunded,
non-qualified, non-contributory benefits equalization plan (the "Supplemental
Retirement Plan") which provides for the accrual and payment of benefits which
are not available under tax qualified plans such as the Retirement Plans.

The Retirement Plans provide for retirement benefits based upon the
accumulated value of defined contributions (expressed as a % of Compensation)
paid by the company into the Retirement Plan. The current contribution rate is %
of compensation and all contributions are accumulated in an individual account
maintained for each employee. Compensation under the Retirement Plans consists
of salary paid by ________ and its subsidiaries included under "Salary" and
"Bonus" in the Summary. The amount available at the retirement date to purchase
any form of single or joint life annuity will depend upon the number of years
for which contributions have been made, the rate of growth achieved by the
underlying investments of the individual account of each employee. There is no
guarantee that a minimum amount will be available at the retirement date.

The "Supplemental Retirement Plan", which is not qualified under
ERISA, provides for similar contributions as the Retirement Plan for that
portion of Compensation which is in excess of the maximum permitted from time to
time for ERISA qualified plans.

<PAGE> 58

INDEPENDENT AUDITORS REPORT

<PAGE> 59

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 ________________(Toll
Free). The following is the Table of Contents for the Statement of Additional
Information.

<PAGE> 60

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
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.........................................................................................
</TABLE>

<PAGE> 61

APPENDIX A

Market Value Adjustment

A Market Value Adjustment will be applied to withdrawals, transfers
or amounts applied to an income plan when taken from a Fixed Sub-Account prior
to its Expiry Date. A Market Value Adjustment is applied separately to each
Fixed Sub-Account.

A Market Value Adjustment is determined by multiplying the amount
withdrawn, transferred or applied to an income plan by the following factor.

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;

- 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; and

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

MVA EXAMPLES

Example #1: Full Surrender -- Example of a Negative Market Value Adjustment
Assume $100,000 is invested 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
7.00% based on the U.S. Treasury Constant Maturity Series. A full surrender is
requested three years into the Guarantee Period and the Index Rate based on the
U.S. Treasury Constant Maturity Series for a seven-year Guarantee Period ("J")
is 8.0% and that no prior transfers or partial withdrawal 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
3
surrender is $124,300 ($100,000 x 1.075 )
2. N = 2,555 (365 x 7)
3. Market Value Adjustment = $124,300 x
2555/365
{[(1.07)/(1.0825)] -1} = - $9,700
Therefore, the amount paid on full surrender is $114,530 ($124,230 -
$9,700)

<PAGE> 62

Example #2: Full Surrender -- Example of a Positive Market Value Adjustment
Assume $100,000 is invested 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
7.00% based on the U.S., Treasury Constant Maturity Series. A full surrender is
requested three years into the Guarantee Period and the Index Rate based on the
U.S. Treasury Constant Maturity Series for a seven-year Guarantee Period ("J")
is 6.0% and that no prior transfers or partial withdrawal 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
3
surrender is $124,300 ($100,000 x 1.075 )

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

3. Market Value Adjustment = $124,300 x
2555/365
{[(1.07)/(1.0625)] -1} = + $6,270
Therefore, the amount paid on full surrender is $130,500 ($124,230 +
$6,270)

Example #3: Partial Withdrawal -- Example of a Negative Market Value
Assume $200,000 is invested 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
7.00% based on the U.S. Treasury Constant Maturity Series. A partial withdrawal
of $114,530 is requested three years into the Guarantee Period and the Index
Rate based on the U.S. Treasury Constant Maturity Series for a seven-year
Guarantee Period ("J") is 8.0% and that no prior transfers or partial withdrawal
affecting this Fixed Sub-Account have been made.

First calculate the amount that must be withdrawn from the Fixed Sub-Account to
provide the amount requested.

1. The Account Value of the Fixed Sub-Account on the date of
3
surrender is $248,459 ($200,000 x 1.075 )
2. N = 2,555 (365 x 7)

3. Amount that must be withdrawn = $114,530 /
2555/365
[(1.07)/(1.0825)] = $124,230 Then calculate the Market Value
Adjustment on that amount
2555/365
4. Market Value Adjustment = $124,230 x {[(1.07)/(1.0825)] -1}
= - $9,700 Therefore, the amount of the partial withdrawal paid is $114,530, as
requested. The Fixed Sub- Account will be reduced by the amount of the partial
withdrawal, $114,530, and also reduced by the Market Value Adjustment of $9,700,
for a total reduction in the Fixed Sub-Account of $124,230.

<PAGE> 63

Example #4: Partial Withdrawal -- Example of a Positive Market Value Adjustment
Assume $200,000 is invested 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 7.00% based on the U.S. Treasury Constant Maturity Series. A partial
withdrawal of $130,500 is requested three years into the Guarantee Period and
the Index Rate based on the U.S. Treasury Constant Maturity Series for a
seven-year Guarantee Period ("J") is 6.0% and that no prior transfers or partial
withdrawal affecting this Fixed Sub-Account have been made.

First calculate the amount that must be withdrawn from the Fixed Sub-Account to
provide the amount requested.

1. The Account Value of the Fixed Sub-Account on the date of
3
surrender is $248,459 ($200,000 x 1.075 )
2. N = 2,555 (365 x 7)

3. Amount that must be withdrawn = $130,500 /
2555/365
[(1.07)/(1.0625)] = $124,230 Then calculate the Market Value
Adjustment on that amount
2555/365
4. Market Value Adjustment = $124,230 x {[(1.07)/(1.0625)]
- -1} = + $6,270 Therefore, the amount of the partial withdrawal paid is $130,500,
as requested. The Fixed Sub- Account will be reduced by the amount of the
partial withdrawal, $130,500, but increased by the Market Value Adjustment of
$6,270, for a total reduction in the Fixed Sub-Account of $124,230.

<PAGE> 64
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Securities and Exchange Commission
Registration Fees (Approximate) $
Printing and engraving $
Accounting fees and expenses $
Legal fees and expenses $
Miscellaneous $
Total Expenses (Approximate) $

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

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,

<PAGE> 65

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.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Not applicable.

ITEM 16. EXHIBITS

1. Form of Distribution Agreement with Finplan of America, Inc.*****

3. (i) Articles of Incorporation of the Company.***

(ii) By-Laws of the Company.***

4. (a) Form of Individual Contract.*

(b) Form of Individual Contract with Interest Account.*

(d) Form of Group Certificate.**

(e) Form of Individual IRA Rider.**

(f) Form of Group IRA Rider.**

(g) Form of Individual SIMPLE IRA Rider.**

<PAGE> 66

(h) Form of Group SIMPLE IRA Rider.**

(i) Form of Individual Roth IRA Rider.**

(j) Form of Group Roth IRA Rider.**

(k) Form of Individual Contract Application.*****

(l) Form of Group Certificate Application.****

5. Opinion and consent of James F. Bronsdon.*****

10. (a) Form of Participation Agreement with The Alger American
Fund.*****

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

23. (a) Consent of Sutherland, Asbill & Brennan LLP.*****

(b) Consent of Ernst & Young LLP.*****

27. Financial Data Schedule.*****

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

* Incorporated herein by reference to Exhibit No. 4 to the Registration
Statement on Form N-4 (File No. __________) filed on January 22,
1998.

** 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.

*** Incorporated herein by reference to Exhibit No. 6 to the Registration
Statement on Form N-4 (File No. 333-43329) filed on December 24,
1997.

**** Incorporated herein by reference to Exhibit No. 5 to the Registration
Statement on Form N-4 (File No. ________) filed on January 22,
1998.

***** To be filed by pre-effective amendment.

<PAGE> 67

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement; and

(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;

(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

<PAGE> 68

As required by the Securities Act of 1933, the registrant has caused
this registration statement to be signed on its behalf, in the City of Stamford,
and the State of Connecticut, on this 13th day of January, 1998.

By: Sage Life Assurance of America, Inc.
(Registrant)

Attest: By: /s/ Ronald S. Scowby
-------------------
Ronald S. Scowby
/s/ James F. Bronsdon President, Chief Executive Officer
- --------------------
James F. Bronsdon

<PAGE> 69

As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----

<S> <C> <C>
/s/ Robin I. Marsden Director January 14, 1998
- --------------------
Robin I. Marsden

/s/ H. Louis Shill Chairman January 15, 1998
- ------------------
H. Louis Shill

/s/ Paul C. Meyer Director January 16, 1998
- -----------------
Paul C. Meyer

/s/ Richard D. Starr Director January 15, 1998
- --------------------
Richard D. Starr

/s/ Mitchell R. Katcher Director, Senior Executive January 13, 1998
- ----------------------- Vice President, Chief Financial
Mitchell R. Katcher Officer,
Chief Actuary

</TABLE>