WRL SERIES LIFE ACCOUNT, 485BPOS, 1998-04-22

WRL SERIES LIFE ACCOUNT
485BPOS, 1998-04-22

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As filed with the Securities and Exchange Commission on April 22, 1998
Registration File Nos. 33-69138/811-4420

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------------------------
POST-EFFECTIVE AMENDMENT NO. 11

FORM S-6

---------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2

---------------------------------
WRL SERIES LIFE ACCOUNT
-----------------------
(Exact Name of Trust)

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
------------------------------------------
(Name of Depositor)

201 Highland Avenue
Largo, Florida 33770
-------------------------------------------------------------
(Complete Address of Depositor's Principal Executive Offices)

Thomas E. Pierpan, Esq.
Vice President, Assistant Secretary and Associate General Counsel
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 33770
----------------------------------------------------------------
(Name and Complete Address of Agent for Service)

Copies to:

Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

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

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

[X] on May 1, 1998, pursuant to paragraph (b) of Rule 485

[ ] 60 days after filing pursuant to paragraph (a) of Rule 485

[ ] on DATE , pursuant to paragraph (a) of Rule 485

<PAGE>

CROSS REFERENCE TO ITEMS REQUIRED

BY FORM N-8B-2

N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- ---------------------

1 Cover Page; The Series Account

2 Cover Page; Western Reserve Life Assurance Co. of Ohio

3 Not Applicable

4 Distribution of the Policies

5 The Series Account

6 The Series Account

7 Not Applicable

8 Not Applicable

9 Legal Proceedings

10 Introduction; Policy Benefits; Payment and Allocation of
Premiums; Investments of the Series Account; Policy Rights

11 The Series Account; WRL Series Fund, Inc.

12 The Series Account; WRL Series Fund, Inc.

13 Charges and Deductions; The Series Account; Investments of the
Series Account

14 Introduction; Allocation of Premiums and Cash Value

15 Allocation of Premiums and Cash Value

16 The Series Account

17 Cash Value; The Series Account; Policy Rights

18 Payment and Allocation of Premiums; Cash Value

19 Voting Rights of the Series Account; Reports and Records

(i)

<PAGE>

N-8B-2 ITEM CAPTION IN PROSPECTUS

20 Not Applicable

21 Loan Privileges

22 Not Applicable

23 Safekeeping of the Series Account's Assets

24 Policy Rights

25 Western Reserve Life Assurance Co. of Ohio

26 Not Applicable

27 Western Reserve Life Assurance Co. of Ohio; The Series
Account; WRL Series Fund, Inc.

28 Western Reserve Life Assurance Co. of Ohio; Executive
Officers and Directors of Western Reserve Life Assurance Co.
of Ohio

29 Western Reserve Life Assurance Co. of Ohio

30 Not Applicable

31 Not Applicable

32 Not Applicable

33 Not Applicable

34 Not Applicable

35 Western Reserve Life Assurance Co. of Ohio

36 Not Applicable

37 Not Applicable

38 Distribution of the Policies

39 Distribution of the Policies

(ii)

<PAGE>

N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- ---------------------

40 Not Applicable

41 Distribution of the Policies; Western Reserve Life Assurance
Co. of Ohio

42 Not Applicable

43 Not Applicable

44 Cash Value

45 Not Applicable

46 Cash Value

47 Introduction; Allocation of Premiums and Cash Value

48 Not Applicable

49 Not Applicable

50 Not Applicable

51 Introduction; Western Reserve Life Assurance Co. of Ohio;
Policy Benefits; Charges and Deductions

52 The Series Account; WRL Series Fund, Inc.

53 Federal Tax Matters

54 Not Applicable

55 Not Applicable

56 Not Applicable

57 Not Applicable

58 Not Applicable

59 Not Applicable

(iii)

<PAGE>

WRL FREEDOM WEALTH PROTECTOR/registered trademark/
JOINT SURVIVORSHIP FLEXIBLE
PREMIUM VARIABLE LIFE
INSURANCE POLICY

Issued by
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
201 Highland Avenue
Largo, Florida 33770
1-800-851-9777
(813) 585-6565

The joint survivorship flexible premium variable life insurance policy
("Policy") issued by Western Reserve Life Assurance Co. of Ohio ("Western
Reserve") and described in this Prospectus is designed to provide lifetime
insurance protection and maximum flexibility in connection with premium
payments and death benefits. A Policyowner may, subject to certain
restrictions, vary the timing and amount of premium payments and increase or
decrease the level of life insurance benefits payable under the Policy. This
flexibility allows a Policyowner to provide for changing insurance needs under
a single life insurance policy. The minimum Specified Amount for a Policy at
issue is generally $100,000.

The Policy provides a death benefit payable upon the death of the
Surviving Insured, and a Net Surrender Value that can be obtained by completely
or partially surrendering the Policy. Net premiums are allocated according to
the Policyowner's directions among the Sub-Accounts of the WRL Series Life
Account ("Series Account"), or to a fixed interest account ("Fixed Account") or
a combination of both. With respect to amounts allocated to Sub-Accounts of the
Series Account, the amount of the death benefit may, and the Cash Value will,
vary to reflect both the investment experience of the Sub-Accounts and the
timing and amount of additional premium payments. However, as long as the
Policy remains In Force, Western Reserve guarantees that the death benefit will
never be less than the Specified Amount of the Policy. While additional premium
payments are not required under the Policy, additional premium payments may be
necessary to prevent Lapse if there is insufficient Net Surrender Value.

The Policy provides a free-look period. The Policyowner may cancel the
Policy within 10 days after the Policyowner receives it, or 10 days after
Western Reserve mails or delivers a written notice of withdrawal right to the
Policyowner, or within 45 days after signing the application, whichever is
latest. Certain states require a free-look period longer than 10 days, either
for all Policyowners or for certain classes of Policyowners.

The assets of each Sub-Account of the Series Account will be invested
solely in a corresponding Portfolio of the WRL Series Fund, Inc. (the "Fund").
The Prospectus for the Fund describes the investment objectives and the risks
of investing in the Portfolios of the Fund corresponding to the Sub-Accounts
currently available under the Policy. The Policyowner bears the entire
investment risk for all amounts allocated to the Series Account; there is no
guaranteed minimum Cash Value.

It may not be to your advantage to replace existing insurance or
supplement an existing flexible premium variable life insurance policy with a
policy described in this Prospectus.

Please read this Prospectus and the Prospectus for the Fund carefully and
retain for future reference.

THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK OR DEPOSITORY INSTITUTION, AND THE POLICY IS NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY, AND INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF
PRINCIPAL AMOUNT INVESTED.

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

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY THE CURRENT PROSPECTUS
FOR THE WRL SERIES FUND, INC. CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE IN ALL
STATES. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.

Prospectus Dated May 1, 1998

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
DEFINITIONS ........................................ 1
INTRODUCTION ....................................... 2
INVESTMENT EXPERIENCE INFORMATION .................. 6
Rates of Return ................................... 7
Death Benefit, Cash Value and Net Surrender
Value Illustrations ........................... 7
Other Performance Data ............................ 13
WESTERN RESERVE AND THE
SERIES ACCOUNT ..................................... 13
Western Reserve Life Assurance Co.
of Ohio ....................................... 13
The Series Account ................................ 14
POLICY BENEFITS .................................... 14
Death Benefit ..................................... 14
When Insurance Coverage Takes Effect .............. 16
Terminal Illness Accelerated Death
Benefit Rider ................................. 17
Cash Value ........................................ 17
INVESTMENTS OF THE SERIES ACCOUNT .................. 18
WRL Series Fund, Inc. ............................. 18
Addition, Deletion, or Substitution
of Investments ................................ 21
PAYMENT AND ALLOCATION OF PREMIUMS ................. 22
Issuance of a Policy .............................. 22
Premiums .......................................... 22
Allocation of Premiums and Cash Value ............. 23
Dollar Cost Averaging ............................. 24
Asset Rebalancing Program ......................... 25
Policy Lapse and Reinstatement .................... 25
CHARGES AND DEDUCTIONS ............................. 27
Premium Expense Charge ............................ 27
Contingent Surrender Charges ...................... 27
Cash Value Charges ................................ 28
Optional Cash Value Charges ....................... 29
Charges Against the Series Account ................ 30
Expenses of the Fund .............................. 30
Group or Sponsored Policies ....................... 30
Associate Policies ................................ 31
POLICY RIGHTS ...................................... 31
Loan Privileges ................................... 31
Surrender Privileges .............................. 32
Examination of Policy Privilege ("Free-Look") ..... 33
Conversion Rights ................................. 33
Policy Split Option ............................... 33
Benefits at Maturity .............................. 33
Payment of Policy Benefits ........................ 34
</TABLE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
GENERAL PROVISIONS ................................. 34
Postponement of Payments .......................... 34
The Contract ...................................... 34
Suicide ........................................... 34
Incontestability .................................. 34
Change of Owner or Beneficiary .................... 35
Assignment ........................................ 35
Misstatement of Age or Sex ........................ 35
Reports and Records ............................... 35
Optional Insurance Benefits ....................... 35
THE FIXED ACCOUNT .................................. 36
Fixed Account Value ............................... 36
Minimum Guaranteed and Current
Interest Rates ................................ 36
Allocations, Transfers and Withdrawals ............ 36
DISTRIBUTION OF THE POLICIES ....................... 37
FEDERAL TAX MATTERS ................................ 37
Introduction ...................................... 37
Tax Charges ....................................... 37
Tax Status of the Policy .......................... 37
Tax Treatment of Policy Benefits .................. 38
Possible Tax Law Changes .......................... 40
Employment-Related Benefit Plans .................. 40
SAFEKEEPING OF THE SERIES
ACCOUNT'S ASSETS ................................... 40
VOTING RIGHTS OF THE SERIES ACCOUNT ................ 40
STATE REGULATION OF WESTERN
RESERVE ............................................ 41
REINSURANCE ........................................ 41
EXECUTIVE OFFICERS AND DIRECTORS
OF WESTERN RESERVE ................................. 41
LEGAL MATTERS ...................................... 42
LEGAL PROCEEDINGS .................................. 42
EXPERTS ............................................ 42
YEAR 2000 MATTERS .................................. 43
ADDITIONAL INFORMATION ............................. 43
INFORMATION ABOUT
WESTERN RESERVE'S
FINANCIAL STATEMENTS ............................... 43
APPENDIX A - ILLUSTRATION
OF BENEFITS ........................................ 44
APPENDIX B - WEALTH INDICES OF
INVESTMENTS IN THE U.S. CAPITAL
MARKETS ............................................ 47
INDEX TO FINANCIAL
STATEMENTS ......................................... 49
</TABLE>

The Policy is not available in all States.

i
<PAGE>

DEFINITIONS

ACCOUNTS -- Allocation options including the Fixed Account and
Sub-Accounts of the Series Account.

ATTAINED AGE -- For each Joint Insured, the Issue Age plus the number of
completed Policy years.

ANNIVERSARY -- The same day and month as the Policy Date for each
succeeding year the Policy remains In Force.

BENEFICIARY -- The person or persons specified by the Owner as entitled
to receive the death benefit proceeds under the Policy.

CASH VALUE -- The sum of the values in each Sub-Account plus the Policy's value
in the Fixed Account.

FIXED ACCOUNT -- An allocation option other than the Series Account. Part
of Western Reserve's General Account.

FUND -- WRL Series Fund, Inc., a registered management investment company
in which the assets of the Series Account are invested.

GENERAL ACCOUNT -- The assets of Western Reserve other than those
allocated to the Series Account or any other separate account.

GUIDELINE PREMIUM -- The level annual premium payment necessary to
provide the benefits selected by the Policyowner under the Policy through its
Maturity Date, based on the particular facts relating to the Insureds and
certain assumptions allowed by law. The dollar amount of the Guideline Premium
is shown on the Policy's Schedule Page.

IN FORCE -- Condition under which the coverage is active and both
Insureds' lives remain insured.

INITIAL PREMIUM -- The amount which must be paid before coverage begins.

ISSUE AGE -- For each Joint Insured, issue age refers to the age on the
Insured's birthday nearest the Policy Date.

JOINT INSUREDS -- The persons whose lives are insured under the Policy.

LAPSE -- Termination of the Policy at the end of the grace period.

LOAN RESERVE -- A part of the Fixed Account to which amounts are
transferred as collateral for Policy loans.

MATURITY DATE -- The date when coverage under the Policy will terminate
if either of the Insureds is living and the Policy is In Force.

MONTHLY ANNIVERSARY OR MONTHIVERSARY -- The same date in each succeeding
month as the Policy Date. For purposes of the Series Account, whenever the
Monthly Anniversary falls on a date other than a Valuation Date, the Monthly
Anniversary will be deemed to be the next Valuation Date.

NET SURRENDER VALUE -- The amount payable upon surrender of the Policy
equal to the Cash Value as of the date of surrender less any surrender charge
and less any outstanding Policy loan, plus unearned loan interest.

NET PREMIUM -- The portion of the premium available for allocation to
either the Fixed Account or the Sub-Accounts of the Series Account equal to the
premium paid by the Policyowner less the applicable premium expense charges.

NO LAPSE DATE -- Either, (1) the later of attained target premium age 65
or five Policy years, or (2) the later of attained target premium age 75 or ten
Policy years, as selected by the Policyowner at time of application for the
Policy.

NO LAPSE PERIOD -- The period of time between the Policy Date and the No
Lapse Date, during which the Policy will not Lapse if certain conditions are
met, even though Net Surrender Value is insufficient to meet the monthly
deduction.

OFFICE -- The administrative office of Western Reserve whose mailing
address is P. O. Box 5068, Clearwater, Florida 33758-5068.

PLANNED PERIODIC PREMIUM -- A scheduled premium of a level amount at a
fixed interval over a specified period of time.

POLICY -- The joint survivorship flexible premium variable life insurance
policy offered by Western Reserve and described in this Prospectus.

POLICY DATE -- The date set forth in the Policy when insurance coverage
is effective and monthly deductions commence under the Policy. The Policy Date
is used to determine Policy years and Policy Months. Policy Anniversaries are
measured from the Policy Date.

POLICY MONTH -- A month beginning on the Monthly Anniversary.

POLICYOWNER(S) ("OWNER(S)") -- The person(s) who owns the Policy, and who
may exercise all rights under the Policy while either or both Joint Insureds
are living. If two Owners are named, the Policy will be owned jointly and the
consent of each Owner will be required to exercise ownership rights.

PORTFOLIO -- A separate investment portfolio of the Fund.

RECORD DATE -- The date the Policy is recorded on the books of Western
Reserve as an In Force Policy.

SERIES ACCOUNT -- WRL Series Life Account, a separate investment account
established by Western Reserve to receive and invest Net Premiums allocated
under the Policy.

SPECIFIED AMOUNT -- The minimum death benefit payable under the Policy as
long as the Policy remains In Force. The death benefit proceeds will be reduced
by any outstanding indebtedness and any due and unpaid charges.

SUB-ACCOUNT -- A sub-division of the Series Account. Each Sub-Account
invests exclusively in the shares of a specified Portfolio of the Fund.

SURVIVING INSURED -- The Joint Insured who remains alive after the other
Joint Insured has died.

TERMINATION -- Condition when either of the Joint Insured's lives is no
longer insured under the coverage provided.

VALUATION DATE -- Each day on which the New York Stock Exchange is open
for business.
VALUATION PERIOD -- The period commencing at the end of one Valuation
Date and continuing to the end of the next succeeding Valuation Date.

1
<PAGE>

INTRODUCTION

1. WHAT IS THE DIFFERENCE BETWEEN THE POLICY AND A CONVENTIONAL FIXED-BENEFIT
POLICY PRIOR TO THE DEATH OF AN INSURED?

Like conventional fixed-benefit life insurance, as long as the Policy
remains In Force, the Policy can provide: (1) the accumulation of
Cash Value; and (2) surrender rights and Policy loan privileges.

The Policy differs from conventional fixed-benefit life insurance by
allowing Policyowners to allocate Net Premiums to one or more
Sub-Accounts of the Series Account, or to the Fixed Account, or to a
combination of both. Each Sub-Account invests in a designated
Portfolio of the Fund. The amount and/or duration of the life
insurance coverage and the Cash Value of the Policy are not
guaranteed and may increase or decrease depending upon the investment
experience of the Series Account. Accordingly, the Policyowner bears
the investment risk of any depreciation in value of the underlying
assets of the Series Account but reaps the benefits of any
appreciation in value. (See Allocation of Premiums and Cash Value -
Allocation of Net Premiums, p. 23.) Unlike conventional fixed-benefit
life insurance, a Policyowner also has the flexibility, subject to
certain restrictions (see Premiums - Premium Limitations, p. 22), to
vary the frequency and amount of premium payments and to decrease the
Specified Amount. Thus, unlike conventional fixed-benefit life
insurance, the Policy does not require a Policyowner to adhere to a
fixed premium schedule. Moreover, the failure to pay a scheduled
premium ("Planned Periodic Premium") will not itself cause the Policy
to lapse, although additional premium payments may be necessary to
prevent lapse if Net Surrender Value is insufficient to pay certain
monthly charges, and a grace period expires without a sufficient
payment. (See Policy Lapse and Reinstatement - Lapse, p. 25.)

2. WHAT IS THE DIFFERENCE BETWEEN THE POLICY AND A CONVENTIONAL FIXED-BENEFIT
POLICY UPON THE DEATH OF AN INSURED?

Under a conventional fixed-benefit life insurance Policy, only one person
is insured. Upon the insured's death, the Policy terminates and the
death benefit is paid to the beneficiary. Under a joint survivorship
Policy, two people are insured. When one of the two insureds dies
with the other insured still living, no death benefit is paid, and
the Policy continues without any change in the Policy provisions,
charges or cash value accumulation.
The Owner(s) may continue to pay premiums, as necessary or desired, and
exercise all rights as Owner(s) under the Policy.

3. WHAT DEATH BENEFIT OPTIONS ARE AVAILABLE UNDER THE POLICY?

The Policy provides the payment of benefits upon the death of the
Surviving Insured. The Policy contains two death benefit options.
Under Death Benefit Option A, the death benefit is the greater of the
Specified Amount of the Policy or a specified percentage times the
Cash Value of the Policy on the date of death of the Surviving
Insured. Under Death Benefit Option B, the death benefit is the
greater of the Specified Amount of the Policy plus the Cash Value of
the Policy on the date of death of the Surviving Insured or a
specified percentage times the Cash Value of the Policy on the date
of death of the Surviving Insured. As long as the Policy remains In
Force, the minimum death benefit payable under either option will be
the current Specified Amount. The amount of death benefit will be
reduced by any outstanding indebtedness and any due and unpaid
charges, and increased by any additional insurance benefits added by
rider and any unearned loan interest. Under Western Reserve's current
rules, the minimum Specified Amount for a Policy at issue is
generally $100,000. The minimum Specified Amount will be set forth in
the Policyowner's Policy. (See Policy Benefits - Death Benefit, p.
14.)

Optional insurance benefits offered under the Policy include a Joint
Insured Term Rider; an Individual Insured Rider; and a Wealth
Protector Rider. (See Optional Cash Value Charges - Optional
Insurance Benefits, p. 29.) The cost of these optional insurance
benefits will be deducted from Cash Value as part of the monthly
deduction. (See Charges and Deductions - Cash Value Charges, p. 28.)

A Terminal Illness Accelerated Death Benefit Rider is automatically
included with every Policy at no additional charge (this Rider may
not be available in all states). This rider makes a "Single Sum
Benefit" available prior to an Insured's death if the Insured has
incurred a condition resulting from illness which, as determined by a
Physician, has reduced the Insured's life expectancy as defined in
the rider. (See Policy Benefits - Terminal Illness Accelerated Death
Benefit Rider, p. 17.)

Benefits under the Policy may be paid in a lump sum or under one of the
settlement options set forth in the Policy. (See Payment of Policy
Benefits - Settlement Options, p. 34.)

2
<PAGE>

4. HOW MAY THE AMOUNT OF THE DEATH BENEFIT AND CASH VALUE VARY?

Under either death benefit option, as long as the Policy remains In Force,
the death benefit will not be less than the current Specified Amount
of the Policy. The amount of death benefit will be reduced by any
outstanding policy loan, plus any unearned loan interest, and any due
and unpaid charges. The death benefit may, however, exceed the
Specified Amount under certain circumstances. The amount by which the
death benefit exceeds the Specified Amount depends upon the option
chosen and the Cash Value of the Policy. (See Policy Benefits - Death
Benefit, p. 14.)

The Policy's Cash Value in the Series Account will reflect the amount and
frequency of premium payments, the investment experience of the
chosen Sub-Accounts of the Series Account, any partial surrenders,
and any charges imposed in connection with the Policy. The entire
investment risk for amounts allocated to the Sub-Accounts of the Series
Account is borne by the Policyowner; Western Reserve does not guarantee
a minimum Cash Value. (See Policy Benefits - Cash Value, p. 17.)

5. WHAT FLEXIBILITY DOES A POLICYOWNER HAVE TO ADJUST THE AMOUNT OF THE DEATH
BENEFIT?

The Policyowner has the flexibility to adjust the death benefit payable by
changing the Death Benefit Option type, by decreasing the Specified
Amount of the Policy or by adding riders to increase the total death
benefit payable. No such change or decrease may be requested during
the first three Policy years. The Policyowner may either change the
death benefit option or decrease the Specified Amount, but not both,
only once each Policy year after the third Policy year. (See Death
Benefit - Change in Death Benefit Option, p. 15.)

6. WHAT FLEXIBILITY DOES A POLICYOWNER HAVE IN CONNECTION WITH PREMIUM
PAYMENTS?

A Policyowner has considerable flexibility concerning the amount and
frequency of premium payments. An Initial Premium at least equal to a
minimum monthly first year premium as set forth in the Policy must be
paid before insurance coverage is In Force. (See Policy Benefits -
When Insurance Coverage Takes Effect, p. 16.) Thereafter, a
Policyowner may, subject to certain restrictions, make premium
payments in any amount and at any frequency. (See Payment and
Allocation of Premiums - Premiums, p. 22.) Each Policyowner will also
determine a Planned Periodic Premium schedule. The schedule will
provide Planned Periodic Premium payments of a level amount at a
fixed interval over a specified period of time. The amount and
frequency of planned premium payments will be set forth in the
Policy. The amount and frequency of Planned Periodic Premium payments
may be changed upon written request. (See Premiums - Planned Periodic
Premiums, p. 22.)

7. HOW LONG WILL THE POLICY REMAIN IN FORCE?

The Policy will Lapse only when Net Surrender Value is insufficient to pay
the monthly deduction (see Charges and Deductions - Cash Value
Charges, p. 28), providing excess indebtedness does not exceed the
Policy's Cash Value, and a grace period expires without a sufficient
payment by the Policyowner. (See Loan Privileges - Indebtedness, p.
32.) However, until the No Lapse Date as provided in the Policy, the
Policy will remain In Force and no grace period will begin provided
the total premiums received (minus any withdrawals and minus any
outstanding loans) equal or exceed the minimum monthly guarantee
premium shown in the Policy times the number of months since the
Policy Date, including the current month. The Policy, therefore,
differs in two important respects from a conventional life insurance
policy. First, the failure to pay a Planned Periodic Premium will not
automatically cause the Policy to Lapse. Second, after the No Lapse
Date, the Policy can Lapse even if Planned Periodic Premiums or
premiums in other amounts have been paid, if Net Surrender Value is
insufficient to pay the monthly deduction, and a grace period expires
without a sufficient payment. Such a Lapse could happen if the
investment experience has been sufficiently unfavorable to have
resulted in a decrease in the Net Surrender Value, or the Net
Surrender Value has decreased because not enough premiums have been
paid to offset the monthly deduction. If either Insured is alive and
the Policy is In Force on the Maturity Date, which is the younger
Insured's 100th birthday, the Policy will then terminate and no
longer be In Force. Upon request, Western Reserve will extend the
Maturity Date as long as there appears to be no unfavorable tax
consequences. The Net Surrender Value as of the Maturity Date will be
paid to the Policyowner. (See Policy Rights - Benefits at Maturity,
p. 33.)

8. HOW ARE NET PREMIUMS ALLOCATED?

The portion of the premium available for allocation ("Net Premium") equals
the premium paid less the Premium Expense Charge. (See Charges and
Deductions - Premium Expense Charge, p. 27.) The Policyowner
initially determines the allocation of the Net Premium among the
Sub-Accounts of the Series Account, each of which invests in shares
of a designated Portfolio of the Fund, or to the Fixed Account, or a
combination. Each

3
<PAGE>

Portfolio has a different investment objective. (See Investments of the
Series Account - WRL Series Fund, Inc., p. 18.) The allocation of future
Net Premiums may be changed without charge at any time by providing
Western Reserve with written notification from the Policyowner, or by
calling Western Reserve's toll-free number, 1-800-851-9777.

9. IS THERE A "FREE-LOOK" PERIOD?

Yes, the Policy provides a Free-Look period. The Policyowner may cancel
the Policy within 10 days after the Policyowner receives it, or 10
days after Western Reserve mails or delivers a written notice of
withdrawal right to the Policyowner, or within 45 days after signing
the application, whichever is latest. Certain states require a
Free-Look period longer than 10 days, either for all Policyowners or
for certain classes of Policyowners. In most states, Western Reserve
will refund the value of the amounts allocated to the Accounts plus
any charges previously deducted. In certain states, the refund will
be the total of all premiums paid. (See Policy Rights - Examination
of Policy Privilege, p. 33.)

10. MAY THE POLICY BE SURRENDERED?

Yes, the Policyowner may totally surrender the Policy at any time and
receive the Net Surrender Value of the Policy. Subject to certain
limitations, the Policyowner may also make cash withdrawals from the
Policy at any time after the first Policy year and prior to the
Maturity Date. (See Policy Rights - Surrender Privileges, p. 32.) If
Death Benefit Option A is in effect, cash withdrawals will reduce the
Policy's Specified Amount by the amount of the cash withdrawal.

11. WHAT IS THE LOAN PRIVILEGE?

After the first Policy Anniversary, a Policyowner may obtain a Policy loan
in any amount which is not greater than 90% of the Cash Value, less
any surrender charge and any already outstanding loan. Western
Reserve reserves the right to permit a Policy loan prior to the first
Policy Anniversary for Policies issued pursuant to a transfer of cash
values from another life insurance policy, under Section 1035(a) of
the Internal Revenue Code of 1986, as amended. It should be noted,
however, that a loan taken from, or secured by, a Policy may be
treated as a taxable distribution, and also may be subject to a
Federal income tax penalty. (See Federal Tax Matters, p. 37.)

The interest rate on a loan is 5.2% payable annually in advance. The
requested loan amount, plus interest in advance, will be transferred
from the Accounts to the Loan Reserve and credited at the end of each
Policy year with guaranteed interest at a rate of 4% per year.
Western Reserve may from time to time, and in its sole discretion,
credit the Loan Reserve with additional interest at a rate higher
than 4% per year. The Loan Reserve is currently being credited with a
rate higher than 4% per year. The minimum loan amount is generally
$500. (See Policy Rights - Loan Privileges, p. 31.) Upon repayment of
a loan, amounts in the Loan Reserve in excess of the outstanding
value of the loan are currently transferred to the Accounts in the
same manner as Net Premium allocations; however, Western Reserve may
in the future require these amounts to be transferred to the Fixed
Account. (See The Fixed Account, p. 36.)

There are risks involved in taking a Policy loan, including the potential
for a Policy to lapse if anticipated earnings, taking into account
any outstanding loans, are not achieved, as well as adverse tax
consequences which occur if a Policy lapses with loans outstanding.
(See Federal Tax Matters - Tax Treatment of Policy Benefits, p. 38.)

12. WHAT CHARGES ARE ASSESSED IN CONNECTION WITH THE POLICY?

Certain charges are deducted from each premium. A Premium Expense Charge
equal to 6.0% of the premiums paid through the end of the tenth
Policy year is deducted to compensate Western Reserve for
distribution expenses incurred in connection with the Policy and for
state premium tax. After the tenth Policy year, the Premium Expense
Charge reduces to 2.5%. (See Charges and Deductions - Premium Expense
Charge, p. 27.)

A "surrender charge" (part of which is a contingent deferred sales charge)
is deducted if the Policy is surrendered during the first 15 Policy
years. The surrender charge consists of a deferred issue charge of
$5.00 per $1,000 of Specified Amount; the surrender charge also
consists of a deferred sales charge equal to 26.5% of one Guideline
Premium and not more than 4.2% of premiums above that amount. A
declining percentage of the surrender charge is assessed after the
tenth year. (See Charges and Deductions - Contingent Surrender
Charges, p. 27.)

A cost of insurance charge and a $5.00 monthly administration charge are
deducted monthly from the Cash Value of each Policy to compensate
Western Reserve for the cost of insurance and the cost of
administering the Policy. Cost of insurance charges will vary with
the Policy's Specified Amount, the death benefit option chosen and
the investment experiences of the Portfolios in which the Policy is
invested. (See Charges

4
<PAGE>

and Deductions - Cash Value Charges, p. 28.) A Death Benefit Guarantee
Charge is deducted up until the No Lapse Date selected by the
Policyowner on the application. The amount of this charge is set forth
on the Policy Schedule Page and will be $0.04 per $1,000 of Specified
Amount for all classes of Policies. On and after the No Lapse Date
selected, this charge will be zero. (See Charges and Deductions - Cash
Value Charges, p. 28.)

Optional Cash Value charges are deducted from the Policy as a result of
Policyowner changes or elections made to the Policy. Optional Cash
Value charges include charges for: optional insurance benefits,
certain Cash Value transfers and cash withdrawals. (See Charges and
Deductions - Optional Cash Value Charges, p. 29.)

Western Reserve charges the Sub-Accounts of the Series Account for the
mortality and expense risks Western Reserve assumes. The charge is
made daily at an effective annual rate of 0.90% of the average daily
net assets of each Sub-Account of the Series Account. (See Charges
and Deductions - Charges Against the Series Account, p. 30.)

Each Sub-Account invests in a corresponding Portfolio of the Fund. Each
Portfolio pays investment management fees based on a percentage of
the Portfolio's average daily net assets. The annual management fees
and other Fund expenses for the Portfolios are provided on p. 6,
under the heading Fund Annual Expenses. Effective January 1, 1997,
the Fund adopted a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended (the "1940 Act")
("Distribution Plan") and pursuant to the Plan, entered into a
Distribution Agreement with InterSecurities, Inc. ("ISI"), principal
underwriter for the Fund.

Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for
expenses incurred in connection with the distribution of a
Portfolio's shares, amounts equal to actual expenses associated with
distributing a Portfolio's shares, up to a maximum rate of 0.15%
(fifteen one-hundredths of one percent) on an annualized basis of the
average daily net assets. This fee is measured and accrued daily and
paid monthly. ISI has determined that it will not seek payment by the
Fund of distribution expenses incurred with respect to any Portfolio
during the fiscal year ending December 31, 1998. Prior to ISI seeking
reimbursement, Policyowners will be notified in advance. In addition,
the Portfolios incur certain operating expenses. (See Investments of
the Series Account - WRL Series Fund, Inc., p. 18.)

No charges are currently made from the Series Account for Federal or state
income taxes. Should Western Reserve determine that such taxes may be
imposed by Federal or state agencies, Western Reserve may make
deductions from the Series Account to pay these taxes. (See Federal
Tax Matters, p. 37.)

13. ARE TRANSFERS PERMITTED AMONG THE ACCOUNTS?

Yes. Twelve Cash Value transfers are permitted among the Sub-Accounts of
the Series Account or from the Sub-Accounts to the Fixed Account
without charge in a Policy year. Western Reserve will impose a $10
charge for each subsequent transfer. (See Payment and Allocation of
Premiums - Allocation of Premiums and Cash Value, p. 23.) Transfers
may also be made from the Fixed Account to the Sub-Accounts subject
to certain restrictions. (See The Fixed Account - Allocations,
Transfers and Withdrawals, p. 36.)

14. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING A POLICY?

Under current Federal tax law, life insurance policies receive tax-favored
treatment. The death benefit is generally excludable from the
beneficiary's gross income for Federal income tax purposes, according
to Section 101(a)(1) of the Internal Revenue Code. Owners of a life
insurance policy are not taxed on any increase in the cash value
while the policy remains In Force.

If a second-to-die life insurance policy is a modified endowment contract
under Federal tax law, certain distributions made during either
insured's lifetime, such as loans and partial withdrawals from, and
collateral assignments of, the policy are includable in gross income
on an income-first basis. A 10% Federal income tax penalty may also
be imposed on distributions made before the policyowner attains age
591/2. Life insurance policies that are not modified endowment
contracts under Federal tax law receive preferential tax treatment
with respect to certain distributions.

For a discussion of tax issues associated with this Policy, see "Federal
Tax Matters" on p. 37.

5
<PAGE>

FUND ANNUAL EXPENSES* (AS A % OF FUND AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
Aggressive Emerging
Growth Growth Growth Global
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Management Fees .............................. 0.80% 0.80% 0.80% 0.80%
Other Expenses (after reimbursement) ......... 0.16% 0.13% 0.07% 0.20%
Total Fund Annual Expenses ................... 0.96% 0.93% 0.87% 1.00%

<CAPTION>
C.A.S.E.
Balanced Value Equity Growth Bond
Portfolio Portfolio Portfolio Portfolio***
----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Management Fees .............................. 0.80% 0.80% 0.80% 0.45%
Other Expenses (after reimbursement) ......... 0.14% 0.09% 0.20% 0.14%
Total Fund Annual Expenses ................... 0.94% 0.89% 1.00% 0.59%
</TABLE>

<TABLE>
<CAPTION>
Strategic Growth & Money
Total Return Income Market
Portfolio Portfolio Portfolio
-------------- ----------- -----------
<S> <C> <C> <C>
Management Fees .............................. 0.80% 0.75% 0.40%
Other Expenses (after reimbursement) ......... 0.08% 0.21% 0.08%
Total Fund Annual Expenses ................... 0.88% 0.96% 0.48%

<CAPTION>
Tactical Third
Asset International Avenue
Allocation Equity U.S. Equity Value
Portfolio Portfolio Portfolio Portfolio**
------------ --------------- ------------- ------------
<S> <C> <C> <C> <C>
Management Fees .............................. 0.80% 1.00% 0.80% 0.80%
Other Expenses (after reimbursement) ......... 0.07% 0.50% 0.50% 0.20%
Total Fund Annual Expenses ................... 0.87% 1.50% 1.30% 1.00%
</TABLE>

* Effective January 1, 1997, the Fund adopted a Plan of Distribution pursuant
to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to the
Plan, entered into a Distribution Agreement with InterSecurities, Inc.
("ISI"), principal underwriter for the Fund. Under the Distribution Plan,
the Fund, on behalf of the Portfolios, is authorized to pay to various
service providers, as direct payment for expenses incurred in connection
with the distribution of a Portfolio's shares, amounts equal to actual
expenses associated with distributing a Portfolio's shares, up to a maximum
rate of 0.15% (fifteen one-hundredths of one percent) on an annualized
basis of the average daily net assets. This fee is measured and accrued
daily and paid monthly. ISI has determined that it will not seek payment by
the Fund of distribution expenses incurred with respect to any Portfolio
during the fiscal year ending December 31, 1998. Prior to ISI seeking
reimbursement, Policyowners will be notified in advance.
** Because the Third Avenue Value Portfolio commenced operations on January 2,
1998, the percentages set forth as "Other Expenses" and "Total Fund Annual
Expenses" reflect estimates of "Other Expenses" for the first year of
operations.
*** Effective January 1, 1998, the management fees for the Bond Portfolio were
reduced from 0.50% to 0.45% of the Portfolio's average daily net assets.
On December 16, 1997, Western Reserve received an Order from the
Securities and Exchange Commission ("Commission") approving the
substitution of shares of the Bond Portfolio for shares of the
Short-to-Intermediate Government Portfolio. On or about December 16, 1997,
the substitution was effected in accordance with the Commission's Order.
As a result of the substitution, investments in the former
Short-to-Intermediate Government Portfolio were automatically transferred
to the Bond Sub-Account and the Short-to-Intermediate Government
Sub-Account was liquidated.

The purpose of the preceding Table is to assist the Policyowner in
understanding the various costs and expenses that a Policyowner will bear
directly and indirectly. The Table reflects charges and expenses of the
Portfolios of the Fund for the fiscal year ended December 31, 1997, except that
the "Other Expenses" and "Total Fund Annual Expenses" for the Third Avenue
Value Portfolio are estimates. Expenses of the Fund may be higher or lower in
the future. Certain states and other governmental entities may impose a premium
tax, which the Table does not include. For more information on the charges
described in this Table, see "Charges And Deductions" on page 27 and the Fund
Prospectus which accompanies this Prospectus.

WRL Investment Management, Inc. ("WRL Management") has undertaken, until
at least April 30, 1999, to pay Fund expenses on behalf of the Portfolios to
the extent normal operating expenses of a Portfolio exceed a stated percentage
of each Portfolio's average daily net assets. The expense limitation for the
Aggressive Growth, Emerging Growth, Growth, Global, Balanced, Strategic Total
Return, Growth & Income, Tactical Asset Allocation, Value Equity, Third Avenue
Value, and C.A.S.E. Growth Portfolios is 1.00% of the average daily net assets;
0.70% of the average daily net assets for the Bond and Money Market Portfolios;
1.50% of the average net daily assets of the International Equity Portfolio;
and 1.30% of the average daily net assets of the U.S. Equity Portfolio. In
1997, WRL Management, the Fund's Investment Adviser, reimbursed the C.A.S.E.
Growth Portfolio in the amount of $50,000, the International Equity Portfolio
in the amount of $179,000 and the U.S. Equity Portfolio in the amount of
$29,000. Without such reimbursement, the total annual Fund expenses during 1997
for the C.A.S.E. Growth Portfolio, International Equity Portfolio and U.S.
Equity Portfolio would have been 1.13%, 3.12% and 1.49%, respectively. See the
Fund's Prospectus for a description of the expense limitation applicable to
each Portfolio.

INVESTMENT EXPERIENCE INFORMATION

The information provided in this section shows the historical investment
experience of the Fund and hypothetical illustrations of the Policy based on
the historical investment experience of the Fund. It does not represent or
project future investment performance.

The Policies became available for sale in January of 1994. The Series
Account and the Fund commenced operations on October 2, 1986. The rates of
return shown below depict the historic investment experience of each Portfolio
of the Fund for the periods shown and assumes that the rate of return for each
Portfolio in each calendar year was uniformly earned throughout the year. The
actual performance of the Portfolios, however, has and will vary throughout the
year, and will result in variable monthly deductions from Cash Value that could
affect performance. The illustrations of death benefits, Cash Values and Net
Surrender Values shown below depict these Policy features for a hypothetical
Policy as if it had been purchased on January 1, 1987 for Insureds in the age
and risk classes indicated, based on the historical investment experience of
the Portfolio indicated since January 1 of the year following a Portfolio's
inception. The actual rate of return for each Portfolio in each calendar year
was assumed

6
<PAGE>

to be uniformly earned throughout that year. The actual performance of the
Portfolios, however, has and will vary throughout the year.

RATES OF RETURN

The rates of return shown below are based on the investment performance,
as described above, after the deduction of investment management fees and
direct Fund expenses, of the Portfolios of the Fund. The rates are average
annual compounded rates of return for the periods ended on December 31, 1997.
(See Investments of the Series Account - WRL Series Fund, Inc., p. 18.)

These rates of return do not reflect the annual charge against the assets
of the Series Account of 0.90% for mortality and expense risks. These rates of
return also do not reflect the charges deducted from premiums, monthly
deductions from Cash Value, or surrender charges. (See Charges and Deductions -
Premium Expense Charge, p. 27 Contingent Surrender Charges, p. 27 and Cash
Value Charges, p. 28.) Accordingly, these rates of return do not illustrate how
actual investment performance will affect benefits under the Policies. (See,
however, Death Benefit, Cash Value and Net Surrender Value Illustrations,
below.) Moreover, these rates of return are not an estimate, projection or
guarantee of future performance.

Also shown are comparable figures for the unmanaged Standard & Poor's
Index of 500 Common Stocks, a widely used measure of stock market performance.
As an unmanaged index, the Standard & Poor's Index of 500 Common Stocks ("S&P
500") does not reflect any deductions for the expense of operating and managing
an investment portfolio.

AVERAGE ANNUAL COMPOUNDED RATES OF RETURN
FOR THE PERIODS ENDED ON DECEMBER 31, 1997

<TABLE>
<CAPTION>
10 5 3 1
Fund Portfolio Inception* Years Years Years Year
- ----------------------- ------------ -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Growth 17.65% 18.66% 14.23% 26,83% 17.54%
Global 20.41% N/A 20.38% 23.13% 18.75%
Bond 7.77% 8.98% 7.24% 10.37% 9.16%
Money Market 5.00% 5.06% 4.31% 5.22% 5.24%
Emerging Growth 20.33% N/A N/A 28.45% 21.45%
Strategic Total
Return 15.07% N/A N/A 20.43% 21.85%
Aggressive Growth 17.72% N/A N/A 23.73% 24.25%
Balanced 10.44% N/A N/A 15.81% 17.10%
Growth & Income 14.17% N/A N/A 20.35% 24.65%
Tactical Asset
Allocation 17.04% N/A N/A 17.01% 16.59%
C.A.S.E. Growth 20.09% N/A N/A N/A 15.03%
International Equity 7.50% N/A N/A N/A 7.50%
U.S. Equity 27.01% N/A N/A N/A 27.01%
Value Equity 23.14% N/A N/A N/A 25.04%
S&P 500 16.95% 18.06% 20.27% 31.15% 33.36%
</TABLE>

* The Growth, Bond and Money Market Portfolios of the Fund commenced operations
on October 2, 1986. The Global Portfolio commenced operations on December
3, 1992. The Emerging Growth and Strategic Total Return Portfolios
commenced operations on March 1, 1993. The Aggressive Growth, Balanced and
Growth & Income Portfolios commenced operations on March 1, 1994. The
Tactical Asset Allocation Portfolio commenced operations on January 3,
1995. The C.A.S.E. Growth Portfolio commenced operations on May 1, 1995.
The Value Equity Portfolio commenced operations on May 1, 1996. The
International Equity and U.S. Equity Portfolios commenced operations on
January 2, 1997. The S&P 500 returns are based on an inception date of
October 2, 1986.

Because the Third Avenue Value Portfolio had not yet commenced operations as of
December 31, 1997, the above chart does not reflect rates of return for this
Portfolio.

Additional information regarding the investment performance of the
Portfolios of the Fund appears in the attached Prospectus for the Portfolios of
the Fund.

DEATH BENEFIT, CASH VALUE AND NET SURRENDER VALUE
ILLUSTRATIONS

In order to demonstrate how the historic investment experience of the
Portfolios could have affected the Option A death benefits, the Policy Cash
Value and Net Surrender Value, the following hypothetical illustrations are
based on the historic investment experience of each Portfolio. These
hypothetical illustrations are designed to show the performance that could have
resulted if the Policy available for purchase today had been in existence
during the period of time illustrated. The historic rate of return in each
calendar year was assumed to be uniformly earned throughout that year. The
actual performance of the Portfolios, however, has and will vary throughout the
year, and will result in variable monthly deductions from Cash Values that
could affect performance. These illustrations do not represent what may happen
in the future.

For each Portfolio, the illustrations show Option A based on the payment
of annual premiums of $4,000 at the beginning of each Policy year, and a
Specified Amount of $250,000 for a male age 55 and a female age 55. The
illustrations also assume that the Joint Insureds are placed in Western
Reserve's Select underwriting rate class. (See Cash Value Charges - Cost of
Insurance, p. 28.) The illustrations also assume that the Policy's entire Cash
Value is allocated to the Sub-Account corresponding to the Portfolio shown. The
illustrated values would be different if the Policyowner had chosen Option B
death benefits.

The amounts shown for death benefits, Cash Values and Net Surrender
Values take into account all charges and deductions from the Policy, the Series
Account and the Fund (see Charges and Deductions - Premium Expense Charge, p.
27, Charges Against the Series Account, p. 29, and Investments of the Series
Account - WRL Series Fund, Inc., p. 18).

For each Portfolio of the Fund, one illustration is based on the
guaranteed cost of insurance rates, while the other illustration is based on
the current cost of insurance rates. These examples of Policy performance are
for the specific ages, sexes, rate class, premium payment pattern and Policy

7
<PAGE>

set forth above. The amount and timing of premium payments would affect
individual Policy benefits as would any withdrawals or loans.

This Prospectus also contains illustrations based on hypothetical rates
of return. See Appendix A, pp. 44-46.

The following example shows how the hypothetical net return of the Growth
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1987. This example assumes that the Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

GROWTH PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------- ------------------------
Policy Anniversary on January 1 of
- ------------------------------------ Current Guaranteed Current Guaranteed
<S> <C> <C> <C> <C>
1988 ............................... $ 3,969 $ 3,969 $ 1,659 $ 1,659
1989* .............................. 8,691 8,691 6,041 6,041
1990* .............................. 18,142 18,142 15,324 15,324
1991* .............................. 20,978 20,978 17,992 17,992
1992* .............................. 39,021 39,021 35,867 35,867
1993* .............................. 43,011 43,007 39,688 39,684
1994* .............................. 47,465 47,447 43,975 43,957
1995* .............................. 46,064 46,024 42,406 42,366
1996* .............................. 72,599 72,494 68,773 68,667
1997* .............................. 88,116 87,936 84,122 83,942
1998* .............................. 108,275 107,963 104,945 104,633
</TABLE>

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Bond
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1987. This example assumes that Net Premiums and related Cash Values were in
the Sub-Account for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.

BOND PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------ -----------------------
Policy Anniversary on January 1 of
- ------------------------------------ Current Guaranteed Current Guaranteed
<S> <C> <C> <C> <C>
1988 ............................... $ 3,384 $ 3,384 $ 1,074 $ 1,074
1989* .............................. 7,344 7,344 4,694 4,694
1990* .............................. 12,458 12,458 9,640 9,640
1991* .............................. 16,903 16,903 13,917 13,917
1992* .............................. 23,617 23,617 20,462 20,462
1993* .............................. 28,960 28,956 25,638 25,634
1994* .............................. 35,880 35,859 32,390 32,369
1995* .............................. 36,274 36,230 32,616 32,572
1996* .............................. 48,262 48,162 44,435 44,336
1997* .............................. 50,684 50,525 46,690 46,531
1998* .............................. 59,113 58,817 55,783 55,487
</TABLE>

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

8
<PAGE>

The following example shows how the hypothetical net return of the Money
Market Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1987. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

MONEY MARKET PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------ -----------------------
Policy Anniversary on January 1 of
- ------------------------------------ Current Guaranteed Current Guaranteed
<S> <C> <C> <C> <C>
1988 ............................... $ 3,759 $ 3,759 $ 1,449 $ 1,449
1989* .............................. 7,693 7,693 5,043 5,043
1990* .............................. 12,012 12,012 9,194 9,194
1991* .............................. 16,491 16,491 13,505 13,505
1992* .............................. 20,787 20,787 17,633 17,633
1993* .............................. 24,714 24,710 21,392 21,387
1994* .............................. 28,472 28,452 24,982 24,962
1995* .............................. 32,576 32,529 28,918 28,871
1996* .............................. 37,389 37,296 33,563 33,470
1997* .............................. 42,186 42,023 38,192 38,029
1998* .............................. 47,481 47,186 44,151 43,856
</TABLE>

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Global
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1993. This example assumes that Net Premiums and related Cash Values were in
the Sub-Account for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.

GLOBAL PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

9
<PAGE>

The following example shows how the hypothetical net return of the
Emerging Growth Portfolio of the Fund would have affected benefits for a Policy
dated January 1, 1994, if the Emerging Growth Portfolio had been offered by the
Policy as of January 1, 1994. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

EMERGING GROWTH PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Strategic Total Return Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1994, if the Strategic Total Return Portfolio had been
offered by the Policy as of January 1, 1994. This example assumes that Net
Premiums and related Cash Values were in the Sub-Account for the entire period
and that the values were determined on the first Valuation Date following
January 1st of each year.

STRATEGIC TOTAL RETURN PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Aggressive Growth Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1995. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

AGGRESSIVE GROWTH PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

10
<PAGE>

The following example shows how the hypothetical net return of the
Balanced Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1995. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

BALANCED PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Growth
& Income Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1995. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

GROWTH & INCOME PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Tactical Asset Allocation Portfolio of the Fund would have affected benefits
for a Policy dated January 1, 1995. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

TACTICAL ASSET ALLOCATION PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For the years shown, benefits and values reflect only premiums paid during
previous Policy years.

11
<PAGE>

The following example shows how the hypothetical net return of the
C.A.S.E. Growth Portfolio of the Fund would have affected benefits for a Policy
dated January 1, 1996. This example assumes that Net Premiums and related Cash
Values were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

C.A.S.E. GROWTH PORTFOLIO

Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium

($250,000 Specified Amount, Non-Smoker Select Risk)
Death Benefit Option A

Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Value
Equity Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1997. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

VALUE EQUITY PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

The following example shows how the hypothetical net return of the U.S.
Equity Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1997. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

U.S. EQUITY PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

The following example shows how the hypothetical net return of the
International Equity Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1997. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

INTERNATIONAL EQUITY PORTFOLIO
Male, Issue Age 55, Female, Issue Age 55, $4,000 Annual Premium
($250,000 Specified Amount, Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

12
<PAGE>

Because the Third Avenue Value Portfolio had not commenced operations as
of December 31, 1997, there are no hypothetical illustrations for this
Portfolio.

OTHER PERFORMANCE DATA

Western Reserve may compare the performance of each Sub-Account in
advertising and sales literature to the performance of other variable life
issuers in general, or to the performance of particular types of variable life
insurance policies investing in mutual funds, or investment series of mutual
funds, with investment objectives similar to each of the Sub-Accounts whose
performance is reported by Lipper Analytical Services, Inc. ("Lipper") and
Morningstar, Inc. ("Morningstar") or reported by other services, companies,
individuals or other industry or financial publications of general interest,
such as FORBES, MONEY, THE WALL STREET JOURNAL, BUSINESS WEEK, BARRON'S,
KIPLINGER'S PERSONAL FINANCE and FORTUNE. Lipper and Morningstar are widely
used independent research services which monitor and rank the performance of
variable life insurance policies in each of the major categories of investment
objectives on an industry-wide basis.

Lipper's and Morningstar's rankings include variable annuity contracts as
well as variable life insurance policies. The performance analyses prepared by
Lipper and Morningstar rank such policies and contracts on the basis of total
return, assuming reinvestment of distributions, but do not take sales charges,
redemption fees or certain expense deductions at the separate account level
into consideration.

Western Reserve may also compare the performance of each Sub-Account in
advertising and sales literature to the Standard & Poor's Index of 500 Common
Stocks, a widely used measure of stock market performance, or other widely
recognized indices. Unmanaged indices may assume the reinvestment of dividends,
but usually do not reflect any "deduction" for the expense of operating or
managing an investment portfolio.

Western Reserve is a member of the Insurance Marketplace Standards
Association ("IMSA"), and as such may include the IMSA logo and information
about IMSA membership in its advertisements. Companies that belong to IMSA
subscribe to a set of ethical standards covering the various aspects of sales
and service for individually sold life insurance and annuities.

In addition, Western Reserve may, as appropriate, compare each
Sub-Account's performance to that of other types of investments such as
certificates of deposit, savings accounts and U.S. Treasuries, or to certain
interest rate and inflation indices, such as the Consumer Price Index, which is
published by the U.S. Department of Labor and measures the average change in
prices over time of a fixed "market basket" of certain specified goods and
services. Similar comparisons of Sub-Account performance may also be made with
appropriate indices measuring the performance of a defined group of securities
widely recognized by investors as representing a particular segment of the
securities markets. For example, Sub-Account performance may be compared with
Donoghue Money Market Institutional Average (money market rates), Lehman
Brothers Corporate Bond Index (corporate bond interest rates) or Lehman
Brothers Government Bond Index (long-term U.S. Government obligation interest
rates).

WESTERN RESERVE AND THE SERIES ACCOUNT

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

Western Reserve was originally incorporated under the laws of Ohio on
October 1, 1957. Western Reserve is engaged in the business of writing life
insurance policies and annuity contracts. Western Reserve is admitted to do
business in 49 states and the District of Columbia. The Office of Western
Reserve is located in Largo, Florida; however, the mailing address is P.O. Box
5068, Clearwater, FL 33758-5068. Western Reserve is a wholly-owned subsidiary
of First AUSA Life Insurance Company ("First AUSA"), a stock life insurance
company which is wholly-owned by AEGON USA, Inc. ("AEGON USA"). AEGON USA is a
financial services holding company whose primary emphasis is on life and health
insurance and annuity and investment products. AEGON USA is a wholly-owned
indirect subsidiary of AEGON nv, a Netherlands corporation, which is a publicly
traded international insurance group.

PUBLISHED RATINGS OF WESTERN RESERVE. Western Reserve may from time to
time publish in advertisements, sales literature and reports to Policyowners,
the ratings and other information assigned to it by one or more independent
rating organizations such as A.M. Best Company ("A.M. Best"), Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Insurance Rating Services
("Standard & Poor's"), and Duff & Phelps Credit Rating Co. ("Duff & Phelps").
A.M. Best's and Moody's ratings reflect their current opinion of the relative
financial strength and operating performance of an insurance company in
comparison to the norms of the life/health insurance industry. Standard &
Poor's and Duff & Phelps provide ratings which measure the claims-paying
ability of insurance companies. These ratings are opinions of an operating
insurance company's financial capacity to meet the obligations of its insurance
policies in accordance with their terms. Claims-paying ability ratings do not
refer to an insurer's ability to meet non-policy obligations (I.E., debt/

commercial paper). These ratings do not apply to the Series Fund, its
Sub-Accounts, the Fund, its Portfolios or to their performance.

13
<PAGE>

THE SERIES ACCOUNT

WRL Series Life Account ("Series Account") was established by Western
Reserve as a separate account on July 16, 1985. The Series Account meets the
definition of a "separate account" under the Federal securities laws. The
Series Account will receive and invest the Net Premiums paid under this Policy
and other flexible premium variable life insurance policies issued by Western
Reserve.

Although the assets of the Series Account are the property of Western
Reserve, the Code of Ohio, under which the Series Account was established,
provides that the assets in the Series Account attributable to the Policies are
not chargeable with liabilities arising out of any other business which Western
Reserve may conduct. The assets of the Series Account shall, however, be
available to cover the liabilities of the General Account of Western Reserve to
the extent that the Series Account's assets exceed its liabilities arising
under the Policies supported by it.

The Series Account is currently divided into fifteen Sub-Accounts. Each
Sub-Account invests exclusively in shares of a single Portfolio of the Fund.
Income and both realized and unrealized gains or losses from the assets of each
Sub-Account of the Series Account are credited to or charged against that
Sub-Account without regard to income, gains or losses from any other
Sub-Account of the Series Account or arising out of any other business Western
Reserve may conduct.

POLICY BENEFITS

DEATH BENEFIT

Policyowners designate in the initial application one of two death
benefit options offered under the Policy: Death Benefit Option A ("Option A")
or Death Benefit Option B ("Option B"). As long as the Policy remains In Force,
(see Policy Lapse and Reinstatement - Lapse, p. 25), Western Reserve will, upon
receiving due proof of the Surviving Insured's death, pay the death benefit
proceeds of a Policy to the named Beneficiary in accordance with the designated
death benefit option. The amount of the death benefit proceeds payable will be
determined at the end of the Valuation Period during which the Surviving
Insured dies. The proceeds may be paid in a lump sum or under one or more of
the settlement options set forth in the Policy. (See Payment of Policy Benefits
- - Settlement Options, p. 34.) Western Reserve guarantees that as long as the
Policy remains In Force (see Policy Lapse and Reinstatement - Lapse, p. 25),
the death benefit proceeds under either option will never be less than the
Specified Amount of the Policy, but the proceeds will be reduced by any
outstanding indebtedness and any due and unpaid charges. These proceeds will be
increased by any additional insurance In Force provided by rider and any
unearned loan interest.

OPTION A. The death benefit is the greater of (i) the Specified Amount
of the Policy or (ii) a specified percentage (the "limitation percentage")
times the Cash Value of the Policy on the date of death of the Surviving
Insured. The limitation percentage is a percentage based on the Attained Age of
the younger Joint Insured and is 250% for a younger Joint Insured age 40 or
below on the Policy Anniversary prior to the date of death. For a younger Joint
Insured with an Attained Age over 40 on a Policy Anniversary, the percentage
declines as shown in the following Limitation Percentage Table. Accordingly,
under Option A the death benefit will remain level unless the limitation
percentage times the Cash Value exceeds the Specified Amount, in which case the
amount of the death benefit will vary as the Cash Value varies.

ILLUSTRATION OF OPTION A. For purposes of this illustration, assume
that the younger Joint Insured's Attained Age is under 40 and that there is no
outstanding indebtedness. Under Option A, a Policy with a $250,000 Specified
Amount will generally pay $250,000 in death benefits. However, because the
death benefit must be equal to or be greater than 250% of Cash Value, any time
the Cash Value of the Policy exceeds $100,000, the death benefit will exceed
the $250,000 Specified Amount. Each additional dollar added to Cash Value above
$100,000 will increase the death benefit by $2.50.

Similarly, so long as Cash Value exceeds $100,000, each dollar taken out
of Cash Value will reduce the death benefit by $2.50. If at any time, however,
the Cash Value multiplied by the limitation percentage is less than the
Specified Amount, the death benefit will equal the Specified Amount of the
Policy.

LIMITATION PERCENTAGE TABLE

<TABLE>
<CAPTION>
ATTAINED AGE
OF YOUNGER PER YEAR
JOINT INSURED LESS OVER AGE
- ---------------------- ------ ---------
<S> <C> <C> <C>
40 and under ......... 250%
41 - 45 .............. 250% 7% 40
46 - 50 .............. 215% 6% 45
51 - 55 .............. 185% 7% 50
56 - 60 .............. 150% 4% 55
61 - 65 .............. 130% 2% 60
66 - 70 .............. 120% 1% 65
71 - 75 .............. 115% 2% 70
76 - 90 .............. 105% 0% 75
91 - 95 .............. 105% 1% 90
96 and older ......... 100% 0% 95
</TABLE>

OPTION B. The death benefit is equal to (i) the greater of the
Specified Amount plus the Cash Value of the Policy on

14
<PAGE>

the date of death of the Surviving Insured or (ii) the limitation percentage
times the Cash Value of the Policy on or prior to the date of death of the
Surviving Insured. The applicable percentage is 250% for the younger Joint
Insured age 40 or below on the Policy Anniversary prior to the date of death of
the Surviving Insured. For the younger Joint Insured with an Attained Age over
40 on a Policy Anniversary, the percentage declines as shown in the Limitation
Percentage Table above. Accordingly, under Option B the amount of the death
benefit will always vary as the Cash Value varies.

ILLUSTRATION OF OPTION B. For purposes of this illustration, assume
that the younger Joint Insured is under the age of 40 and that there is no
outstanding indebtedness. Under Option B, a Policy with a Specified Amount of
$250,000 will generally pay a death benefit of $250,000 plus Cash Value. Thus,
for example, a Policy with a Cash Value of $50,000 will have a death benefit of
$300,000 ($250,000 + $50,000). The death benefit, however, must be at least
250% of Cash Value. As a result, if the Cash Value of the Policy exceeds
$166,666, the death benefit will be greater than the Specified Amount plus Cash
Value. Each additional dollar of Cash Value above $166,666 will increase the
death benefit by $2.50.

Similarly, any time Cash Value exceeds $166,666, each dollar taken out of
Cash Value will reduce the death benefit by $2.50. If at any time, however,
Cash Value multiplied by the limitation percentage is less than the Specified
Amount plus the Cash Value, then the death benefit will be the Specified Amount
plus the Cash Value of the Policy.

CHOOSING DEATH BENEFIT OPTION A OR OPTION B. Assuming the death benefit
is not determined by reference to the limitation percentage, Option A will
provide a Specified Amount of death benefit which does not vary with changes in
Cash Value. Thus, under Option A, as Cash Value increases, Western Reserve's
net amount at risk and therefore the pure insurance protection under the Policy
will decline. In contrast, Option B involves a constant net amount at risk,
assuming that the death benefit is not determined by reference to the
limitation percentage. Assuming positive investment experience, the deduction
for cost of insurance under a Policy with an Option A death benefit will be
less than under a corresponding Policy with an Option B death benefit. Because
of this, if investment performance is positive, Cash Value under Option A will
increase faster than under Option B but the total death benefit under Option B
will generally be greater. Thus, Option A could be considered more suitable for
Policyowners whose goal is increasing Cash Value based upon positive investment
experience while Option B could be considered more suitable for Policyowners
whose goal is increasing total death benefit.

CHANGE IN DEATH BENEFIT OPTION. Generally, the death benefit option in
effect may be changed by the Policyowner once each Policy year after the third
Policy year, provided that no decrease in Specified Amount is made that year. A
change in death benefit option may be made by sending Western Reserve a written
request for a change. A change in death benefit option may have Federal income
tax consequences. (See Federal Tax Matters, p. 37.) The Policyowner may either
change the death benefit option or decrease the Specified Amount, but not both,
only once each Policy year after the third Policy year.

Under Western Reserve's current rules, no change may be made if it would
result in a Specified Amount less than the minimum Specified Amount set forth
in the Policy. The effective date of any change will be the Monthly Anniversary
on or following receipt of the request. No charges will be imposed for making a
change in death benefit option.

If the death benefit option is changed from Option B to Option A, the
Specified Amount will be increased by an amount equal to the Policy's Cash
Value on the effective date of change. If the death benefit option is changed
from Option A to Option B, the Specified Amount will be decreased by an amount
equal to the Cash Value on the effective date of the change.

CORRIDOR PERCENTAGE. If pursuant to requirements of the Internal
Revenue Code of 1986, as amended, the death benefit under a Policy is
determined by reference to the limitation percentages discussed above, the
Policy is described as "in the corridor," and an increase in the Cash Value of
the Policy will increase the net amount at risk assumed by Western Reserve and
consequently increase the cost of insurance deducted from the Cash Value of the
Policy. (See Cash Value Charges - Cost of Insurance, p. 28.)

INSURANCE PROTECTION. A Policyowner may increase or decrease the pure
insurance protection provided by a Policy (I.E., the difference between the
death benefit and the Cash Value) in one of several ways as insurance needs
change. These ways include decreasing the Specified Amount of insurance,
changing the level of premium payments, and, to a lesser extent, making a cash
withdrawal from the Policy. Although the consequences of each of these methods
will depend upon the individual circumstances, they may be generally summarized
as follows:

(a) A decrease in the Specified Amount will, subject to the limitation
percentage (see Policy Benefits - Death Benefit, p. 14), in general
decrease the insurance protection and the charges under the Policy
without reducing the Cash Value.

(b) If Option A is elected, an increased level of premium payments will
reduce the pure insurance protection,

15
<PAGE>

until the limitation percentage times the Cash Value exceeds the
Specified Amount. Increased premiums should increase the amount of
Net Surrender Value available to keep the Policy In Force.

(c) A cash withdrawal will reduce the death benefit. (See Surrender
Privileges - Cash Withdrawals, p. 32.) It has no effect on the
amount of pure insurance protection and charges under the Policy,
unless the death benefit payable is governed by the limitation
percentages. It results in a reduced amount of Net Surrender Value
available to pay the monthly deduction, thereby increasing the
possibility that the Policy will lapse.

(d) A reduced level of premium payments generally increases the amount of
pure insurance protection if Option A is elected, or maintains the
same amount of pure insurance protection if Option B is elected,
again depending on the limitation percentage. It results in a
reduced amount of Cash Value and increases the possibility that the
Policy will lapse.

HOW DEATH BENEFITS MAY VARY IN AMOUNT. As long as the Policy remains In
Force, Western Reserve guarantees that the death benefit will never be less
than the Specified Amount of the Policy. These proceeds will be reduced by any
outstanding indebtedness and any due and unpaid charges. The death benefit may,
however, vary with the Policy's Cash Value. Under Option A, the death benefit
will only vary when the Cash Value multiplied by the limitation percentage
exceeds the Specified Amount of the Policy. The death benefit under Option B
will always vary with the Cash Value because the death benefit equals either
the Specified Amount plus the Cash Value or the limitation percentage times the
Cash Value.

DECREASE IN SPECIFIED AMOUNT. Subject to certain limitations, a
Policyowner may decrease the Specified Amount of a Policy. A decrease in
Specified Amount may affect the net amount at risk, which may affect a
Policyowner's cost of insurance charge. (See Cash Value Charges - Cost of
Insurance, p. 28.) A decrease in Specified Amount could also have Federal
income tax consequences. (See Federal Tax Matters, p. 37.) The Policyowner may
either change the death benefit option or decrease the Specified Amount, but
not both, only once each Policy year after the third Policy year.

No requested decrease in the Specified Amount will be permitted during
the first three Policy years. Thereafter, any decrease in the Specified Amount
will become effective on the Monthly Anniversary date on or following receipt
of a written request from the Policyowner by Western Reserve. No requested
decrease in the Specified Amount will be permitted during the first three
Policy years. The Specified Amount remaining In Force after any requested
decrease may not be less than the minimum Specified Amount set forth in the
Policy. Western Reserve reserves the right to limit any decrease to no more
than 20% of the Specified Amount immediately prior to the decrease. If,
following the decrease in Specified Amount, the Policy would not comply with
the maximum premium limitations required by Federal tax law (see Premiums -
Premium Limitations, p. 22), the decrease may be limited to the extent
necessary to meet these requirements.

WHEN INSURANCE COVERAGE TAKES EFFECT

No life insurance coverage shall take effect unless the proposed Joint
Insureds are alive and in the same condition of health as described in the
application when the Policy is delivered to the Policyowner and the full
Initial Premium is paid. However, if the full Initial Premium is paid as set
forth in the conditional receipt attached to the application, and the
conditional receipt is delivered to the Policyowner, the terms of the
conditional receipt shall apply.

CONDITIONAL INSURANCE COVERAGE. The proposed Joint Insureds must be
insurable and acceptable to Western Reserve under its underwriting rules for
the amount, Policy and risk classification applied for on the later of: (a) the
date of application, or (b) the date of completion of all medical tests and
examinations required by Western Reserve. Any check given for payment must be
honored on first presentation. The conditional receipt and all coverages
applied for on the application are void if a check or draft received for
payment of the Initial Premium is not honored when first presented for payment.

AMOUNT OF CONDITIONAL LIFE INSURANCE COVERAGE. If conditional insurance
coverage becomes effective under the terms of the conditional receipt, then the
amount of conditional life insurance coverage on any person proposed for
insurance is the lesser of: (a) the amount of life insurance applied for on
such person, or (b) $300,000 reduced by the amounts payable under all other
life insurance or accidental death benefits then in force or pending with
Western Reserve.

WHEN CONDITIONAL LIFE INSURANCE COVERAGE BEGINS. If the conditions listed
above are fulfilled, then the amount of conditional insurance coverage
specified above shall take effect on the later of: (a) the date of the
application, or (b) the date of the completion of all medical tests and
examinations required by Western Reserve. All conditional coverages for the
proposed Joint Insureds will be deemed void if the application contains
material misrepresentation or is fraudulently completed. Benefits under the
conditional receipt coverage will be denied if any proposed Joint Insured
commits suicide.

WHEN CONDITIONAL LIFE INSURANCE COVERAGE ENDS. Conditional life insurance
coverage shall terminate automatically, without notice, on the earliest of the
following dates:

16
<PAGE>

(a) the date Western Reserve approves the Policy as applied for, or (b) 10 days
following any counteroffer by Western Reserve to offer insurance to any person
proposed for insurance under a different policy or at an increased premium or
on a different rate class or (c) at the end of the fraction of a year which the
payment bears to the premium required to provide one month of insurance
coverage in the amount as described above, or (d) at the beginning of the 60th
day following the date of the conditional receipt.

TERMINAL ILLNESS ACCELERATED DEATH BENEFIT RIDER

In states where this rider has been approved by that state's department
of insurance, upon receipt of proof satisfactory to Western Reserve that the
Surviving Insured has incurred a condition resulting from illness which, as
determined by a Physician, has reduced life expectancy to not more than 12
months from the date of the Physician's Statement (a "Terminal Condition"),
Western Reserve will pay to the Policyowner a "Single Sum Benefit," equal to:

(a) the Death Benefit in effect on the date the Single Sum Benefit is
paid; multiplied by

(b) the Election Percentage; divided by

(c) 1 + i, where i equals the greater of (A) and (B) on the date the
Single Sum Benefit is paid. (A) equals the interest rate determined
under Internal Revenue Code section 846(c)(2), as it may be amended
from time to time; and (B) equals the Policy Loan Interest Rate;
minus

(d) indebtedness, if any, at the time the Single Sum Benefit is paid,
multiplied by the Election Percentage.

"Death Benefit" under the Rider means the amount payable at death of the
Surviving Insured under the Policy, plus the benefit payable under any In Force
Joint Insured Term Rider or Wealth Protector Rider. (See Optional Insurance
Benefits, p. 35.) "Election Percentage" means a percentage, selected by the
Policyowner, not to exceed 100% of the Policy's Death Benefit, as defined under
the Rider; however, in no event will the Election Percentage result in a Single
Sum Benefit greater than $500,000. A "Physician" may be a Doctor of Medicine or
a Doctor of Osteopathy, licensed to practice medicine and treat injury or
illness in the state in which treatment is received and who is acting within
the scope of that license, and must be someone other than the Surviving
Insured, the Policyowner, a person who lives with the Surviving Insured or
Policyowner, or a person who is part of the Surviving Insured's or
Policyowner's "Immediate Family" (spouse, child, brother, sister, parent,
grandparent or grandchild of the Surviving Insured). The "Physician's
Statement" must be a written statement signed by a Physician which provides the
Physician's diagnosis of the Surviving Insured's non-correctable medical
condition. It must state with reasonable medical certainty that the
non-correctable medical condition will result in the death of the Surviving
Insured within 12 months of the Physician's Statement, taking into
consideration the ordinary and reasonable medical care, advice and treatment
available in the same or similar communities.

The Rider will not pay benefits for a Terminal Condition resulting from
self-inflicted bodily injuries occurring within the same period specified in
the Policy's suicide provision. The Rider terminates at the earliest of (a) the
date the Policy terminates, (b) the effective date of a settlement option
elected under the Policy, (c) the date the Single Sum Benefit is paid, or (d)
the date the Policyowner elects to terminate the Rider.

Pursuant to the recently enacted Health Insurance Portability and
Accountability Act of 1996, Western Reserve believes that for Federal income
tax purposes a Single Sum Benefit payment made under the Terminal Illness
Accelerated Death Benefit Rider should be fully excludable from the gross
income of the Beneficiary, as long as the Beneficiary is the Insured under the
Policy. However, a Policyowner should consult a qualified tax advisor about the
consequences of adding this Rider to a Policy or requesting a Single Sum
Benefit payment under this Rider. There is no additional charge for this
benefit. As stated above, this Rider may not be available in all states, or, if
available, the terms of the Rider may vary in accordance with each state's
insurance laws.

CASH VALUE

At the end of any Valuation Period, the Cash Value of the Policy is equal
to the sum of the Policy's value in each Sub-Account of the Series Account plus
the Fixed Account Value. There is no guaranteed minimum Cash Value.

NET SURRENDER VALUE. A Policyowner may at any time surrender the Policy
and receive the Policy's Net Surrender Value. (See Policy Rights - Surrender
Privileges, p. 32.) The Net Surrender Value as of any date is equal to:

(1) the Cash Value as of such date; minus
(2) any surrender charge as of such date (as described on p. 32); minus

(3) any outstanding Policy loan; plus
(4) any unearned loan interest.

DETERMINATION OF VALUES IN THE SERIES ACCOUNT. On the Record Date, the
Policy's value in a Sub-Account of the Series Account will equal the portion of
any Net Premium allocated to the Sub-Account, reduced by the portion of the
first monthly deduction allocated to that Sub-Account. (See Payment and
Allocation of Premiums - Allocation of Premiums and Cash Value, p. 23.)
Thereafter, on each Valuation

17
<PAGE>

Date, the Policy's value in a Sub-Account of the Series Account will equal the
number of units in the Sub-Account, multiplied by the unit value of that
Sub-Account.

The number of units that the Policy has in each Sub-Account is equal to:

(1) The initial units purchased on the Policy Date; plus

(2) Units purchased at the time additional Net Premiums are allocated to
the Sub-Account; plus

(3) Units purchased through transfers from another Sub-Account or
the Fixed Account; minus

(4) Units that are redeemed to pay for monthly deductions as they are
due; minus

(5) Units that are redeemed to pay for any cash withdrawals; minus

(6) Units that are redeemed as part of any transfer to another
Sub-Account or the Fixed Account.

The Policy's total value in the Series Account equals the sum of the
Policy's value in each Sub-Account. (For a description of how the values of the
Fixed Account are calculated, see The Fixed Account - Fixed Account Value, p.
36.) Because the Cash Value is dependent upon a number of variables, including
the investment experience of the chosen Sub-Accounts of the Series Account, the
frequency and amount of premium payments, transfers and surrenders, and charges
assessed in connection with the Policy, a Policy's Cash Value cannot be
predetermined.

UNIT VALUE. The unit value of each Sub-Account was originally
established at $10 per unit. The unit value may increase or decrease from one
Valuation Period to the next. Unit values also will vary between Sub-Accounts.
The unit value of any Sub-Account at the end of a Valuation Period is the
result of:

(1) The total value of the assets held in the Sub-Account,
determined by multiplying the number of shares of the designated
Portfolio owned by the Sub-Account times the Portfolio's net asset
value per share; minus

(2) A deduction for the charge for mortality and expense risks. This
charge is used to compensate Western Reserve for its assumption of
certain mortality and expense risks. The daily amount of this
charge is equal to the net assets of the Sub-Account times the
daily pro rata portion of the annual Mortality and Expense Risk
Charge rate. This annual rate is equal to ninety one-hundredths of
one percent (0.90%); and is multiplied times the net assets of the
Sub-Account; minus

(3) The accrued amount of reserve for any taxes or other economic burden
resulting from the application of tax laws that are determined by
Western Reserve to be properly attributable to the Sub-Account; and
the result divided by

(4) The number of outstanding units in the Sub-Account.

VALUATION DATE AND VALUATION PERIOD. The net asset value per share of
shares of the Fund is determined, once daily, as of the close of the regular
session of business on the New York Stock Exchange ("Exchange") (usually 4:00
p.m., Eastern time), on each day the Exchange is open.

INVESTMENTS OF THE SERIES ACCOUNT

WRL SERIES FUND, INC.

The Series Account invests in shares of the Fund, a series mutual fund
which is registered with the Commission as an open-end management investment
company. Such registration does not involve supervision of the management or
investment practices or policies of the Fund by the Commission.

Currently, the Portfolios of the Fund corresponding to the Sub-Accounts
of the Series Account are: Aggressive Growth Portfolio, Emerging Growth
Portfolio, Growth Portfolio, Global Portfolio, Balanced Portfolio, Strategic
Total Return Portfolio, Bond Portfolio, Growth & Income Portfolio, Money Market
Portfolio, Tactical Asset Allocation Portfolio, C.A.S.E. Growth Portfolio,
Value Equity Portfolio, U.S. Equity Portfolio, International Equity Portfolio,
and Third Avenue Value Portfolio. The assets of each Portfolio are held
separate from the assets of the other Portfolios, and each Portfolio has an
investment objective and policies which are different from those of the other
Portfolios. Thus, each Portfolio operates as a separate investment fund, and
the income or losses of one Portfolio generally have no effect on the
investment performance of any other Portfolio. Pending any prior approval by a
state insurance regulatory authority, certain Sub-Accounts and corresponding
Portfolios may not be available to residents of some states.

The investment objective and policies of each Portfolio are summarized
below. THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ACHIEVE ITS STATED
OBJECTIVE. More detailed information, including a description of risks, can be
found in the Prospectus for the Fund which should be read carefully.

AGGRESSIVE GROWTH PORTFOLIO: This Portfolio seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of
equity securities.

EMERGING GROWTH PORTFOLIO: This Portfolio seeks capital appreciation by
investing primarily in common stocks of small and medium sized companies.

18
<PAGE>

GROWTH PORTFOLIO: This Portfolio seeks growth of capital, by investing
primarily in common stocks listed on a national securities exchange or traded
on NASDAQ.

GLOBAL PORTFOLIO: This Portfolio seeks long-term growth of capital in a
manner consistent with preservation of capital, primarily through investments
in common stocks of foreign and domestic issuers.

BALANCED PORTFOLIO: This Portfolio seeks preservation of capital,
reduced volatility, and superior long-term risk adjusted returns by investing
primarily in common stock, convertible securities and fixed-income securities.

STRATEGIC TOTAL RETURN PORTFOLIO: This Portfolio seeks to provide
current income, long-term growth of income and capital appreciation by
investing primarily in a blend of equity and fixed-income securities, including
common stocks, income producing securities convertible into common stock, and
fixed-income securities.

BOND PORTFOLIO: This Portfolio seeks the highest possible current
income within the confines of the primary goal of insuring the protection of
capital by investing at least 65%, and usually a higher percentage, of its
assets in debt securities issued by the U.S. Government and its agencies and
instrumentalities and in other medium to high-quality debt securities.

GROWTH & INCOME PORTFOLIO: This Portfolio's objective is to seek total
return by investing in securities that have defensive characteristics. The
Portfolio will invest primarily in a diversified portfolio of equity and debt
securities with an emphasis on sector investing.

MONEY MARKET PORTFOLIO: This Portfolio seeks to obtain maximum current
income consistent with preservation of principal and maintenance of liquidity.
The Portfolio maintains a dollar-weighted average portfolio maturity of not
more than 90 days by investing in U.S. dollar-denominated securities which have
effective maturities of not more than 13 months and present minimal credit
risks.

TACTICAL ASSET ALLOCATION PORTFOLIO: This Portfolio seeks preservation
of capital and competitive investment returns by investing primarily in stocks,
United States Treasury bonds, notes and bills, and money market funds.

C.A.S.E. GROWTH PORTFOLIO: This Portfolio seeks annual growth of
capital through investment in companies whose management, financial resources
and fundamentals appear attractive on a scale measured against each company's
present value.

VALUE EQUITY PORTFOLIO: This Portfolio seeks to achieve maximum,
consistent total return with minimum risk to principal by investing primarily
in common stocks with above-average statistical value which, in the
Sub-Adviser's opinion, are in fundamentally attractive industries and are
undervalued at the time of purchase.

INTERNATIONAL EQUITY PORTFOLIO: This Portfolio seeks long-term growth
of capital by investing primarily in the common stock of foreign issuers traded
on overseas exchanges and in foreign over-the-counter markets.

U.S. EQUITY PORTFOLIO: This Portfolio seeks long-term growth of capital
by investing primarily in equity securities of U.S. companies.

THIRD AVENUE VALUE PORTFOLIO: This Portfolio seeks long-term capital
appreciation by investing primarily in a portfolio of equity securities of
well-financed companies believed to be priced below their private market values
and debt securities providing strong protective covenants and high, effective
rates.

On or about December 16, 1997, after receiving an Order from the SEC,
Western Reserve redeemed shares of the Short-to-Intermediate Government
Portfolio held by the Short-to-Intermediate Government Sub-Account and
purchased shares of the Bond Portfolio with the proceeds. Immediately following
the substitution of shares, the assets of the Short-to-Intermediate Government
Sub-Account were transferred to the Bond Sub-Account, thereby consolidating the
Short-to-Intermediate Government Sub-Account into the Bond Sub-Account. The
Portfolio substitution and Sub-Account consolidation took place at net asset
value with no change in the amount of any Owner's benefits or Cash Value.
Western Reserve and its affiliates did not receive any compensation or
renumeration as a result of this transaction.

WRL Investment Management, Inc. ("WRL Management"), located at 201
Highland Avenue, Largo, FL 33770, a wholly-owned subsidiary of Western Reserve,
serves as investment adviser to the Fund and manages the Fund in accordance
with policies and guidelines established by the Board of Directors of the Fund.

Each Sub-Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended.

Janus Capital Corporation ("Janus") is sub-adviser to the Growth and
Global Portfolios of the Fund. WRL Management and Janus will divide equally
monthly compensation at the current annual rate of 0.80% of the aggregate
average daily net assets each of the Growth Portfolio and the Global Portfolio.

AEGON USA Investment Management, Inc. ("AIMI") is sub-adviser to the Bond
and Balanced Portfolios of the

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<PAGE>

Fund. AIMI is a wholly-owned subsidiary of AEGON USA and thus is an affiliate
of Western Reserve. WRL Management and AIMI will divide equally monthly
compensation at the current annual rate of 0.80% of the aggregate average daily
net assets of the Balanced Portfolio. WRL Management will receive monthly
compensation at the current annual rate of 0.45% and AIMI will receive 0.20% of
the aggregate average daily net assets of the Bond Portfolio. AIMI's
compensation will be reduced by 50% of the amount paid by WRL Management on
behalf of the Bond Portfolio and the Balanced Portfolio pursuant to any expense
limitation or other reimbursement.

Van Kampen American Capital Asset Management, Inc. ("Van Kampen American
Capital") is sub-adviser to the Emerging Growth Portfolio of the Fund. Van
Kampen American Capital is an indirect wholly-owned subsidiary of VK/AC
Holding, Inc., ("VK/AC Holding"). VK/AC Holding is a wholly-owned subsidiary of
MSAM Holdings II, Inc., which, in turn, is a wholly-owned subsidiary of Morgan
Stanley Group, Inc. WRL Management and Van Kampen American Capital will divide
equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the Emerging Growth Portfolio. Van Kampen
American Capital's compensation will be reduced by 50% of the amount paid by
WRL Management on behalf of the Emerging Growth Portfolio pursuant to any
expense limitation or other reimbursement.

Luther King Capital Management Corporation ("Luther King") is sub-adviser
to the Strategic Total Return Portfolio of the Fund. Ultimate control of Luther
King is exercised by J. Luther King, Jr. WRL Management and Luther King will
divide equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the Strategic Total Return Portfolio.

Federated Investment Counseling ("Federated") is sub-adviser to the Growth &
Income Portfolio of the Fund. Federated is a wholly-owned subsidiary of
Federated Investors. WRL Management will receive monthly compensation at the
current annual rate of 0.75% of the aggregate average daily net assets of the
Growth & Income Portfolio. From this amount, as compensation of its services,
Federated will receive payments of fees equal to 0.50% of the first $30 million
of average daily net assets, 0.35% of the next $20 million of average daily net
assets, and 0.25% of average daily net assets in excess of $50 million of the
Growth & Income Portfolio.

Fred Alger Management, Inc. ("Fred Alger") is sub-adviser to the Aggressive
Growth Portfolio of the Fund. Fred Alger is a wholly-owned subsidiary of Fred
Alger & Company, Incorporated, which in turn is a wholly-owned subsidiary of
Alger Associates, Inc., a financial services holding company controlled by Fred
M. Alger. WRL Management and Fred Alger will divide equally monthly
compensation at the current annual rate of 0.80% of the aggregate average daily
net assets of the Aggressive Growth Portfolio.

Dean Investment Associates, a Division of C.H. Dean and Associates, Inc.
("Dean") is sub-adviser to the Tactical Asset Allocation Portfolio of the Fund.
Dean is wholly-owned by C.H. Dean and Associates, Inc. WRL Management and Dean
will divide equally monthly compensation at the current annual rate of 0.80% of
the aggregate average daily net assets of the Tactical Asset Allocation
Portfolio. Dean's compensation will be reduced by 50% of the amount paid by WRL
Management on behalf of the Tactical Asset Allocation Portfolio pursuant to any
expense limitation or other reimbursement.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") is sub-adviser to
the Money Market Portfolio of the Fund. J.P. Morgan is a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated. WRL Management will receive
monthly compensation at the current annual rate of 0.40% of the aggregate
average daily net assets of the Money Market Portfolio. From this amount, as
compensation for its services, J.P. Morgan will receive 0.15% of the average
daily net assets of the Money Market Portfolio.

C.A.S.E. Management, Inc. ("C.A.S.E.") is sub-adviser to the C.A.S.E.
Growth Portfolio of the Fund. C.A.S.E. is a wholly-owned subsidiary of C.A.S.E.
Inc. C.A.S.E. Inc. is indirectly controlled by William Edward Lange, president
and chief executive officer of C.A.S.E. WRL Management and C.A.S.E. will divide
equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the C.A.S.E. Growth Portfolio.

NWQ Investment Management Company, Inc. ("NWQ Investment") is sub-adviser
to the Value Equity Portfolio of the Fund. NWQ Investment was founded in 1982
and is a wholly-owned subsidiary of United Asset Management Corporation. WRL
Management and NWQ Investment will divide equally monthly compensation at the
current annual rate of 0.80% of the aggregate average daily net assets of the
Value Equity Portfolio. NWQ Investment's compensation will be reduced by 50% of
the amount paid by Western Reserve on behalf of the Value Equity Portfolio
pursuant to any expense limitation or other reimbursement.

Scottish Equitable Investment Management Limited ("Scottish Equitable")
is a co-sub-adviser to the International Equity Portfolio. Scottish Equitable
is a wholly-owned subsidiary of Scottish Equitable plc, successor to Scottish
Equitable Life Assurance Society, which was founded in Edinburgh in 1831.
Scottish Equitable is also an indirect wholly-owned subsidiary of AEGON nv. WRL
Management

20
<PAGE>

receives monthly compensation at the annual rate of 1.00% of the aggregate
average daily net assets of the International Equity Portfolio. From this
amount, Scottish Equitable receives 0.50% of average daily net assets of the
Portfolio managed by Scottish Equitable.

GE Investment Management Incorporated ("GEIM") also is co-sub-adviser to
the International Equity Portfolio and is sub-adviser to the U.S. Equity
Portfolio. GEIM is a wholly-owned subsidiary of General Electric Company
("GE"). GEIM's principal officers and directors serve in similar capacities
with respect to General Electric Investment Corporation ("GEIC," and, together
with GEIM and their predecessors, collectively referred to as "GE
Investments"), which like GEIM is a wholly-owned subsidiary of GE. WRL
Management receives monthly compensation at the annual rate of 1.00% of the
aggregate average daily net assets of the International Equity Portfolio. From
this amount, GEIM, receives 0.50% of average daily net assets of the Portfolio
managed by GEIM.

With respect to the U.S. Equity Portfolio, WRL Management and GEIM will
divide equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the U.S. Equity Portfolio.

EQSF Advisers, Inc., ("EQSF") is sub-adviser to the Third Avenue Value
Portfolio. EQSF is a New York corporation organized in 1988 and is controlled
by Martin J. Whitman. WRL Management and EQSF will divide equally monthly
compensation at the current annual rate of 0.80% of the aggregate average daily
net assets of the Third Avenue Value Portfolio, EQSF's compensation will be
reduced by 50% of the amount paid by WRL Management on behalf of the Third
Avenue Value Portfolio, pursuant to any expense limitation or other
reimbursement.

In addition to the Series Account, shares of the Fund are also sold to
the WRL Series Annuity Account, a separate account established by Western
Reserve for its variable annuity contracts, the PFL Endeavor Variable Annuity
Account, PFL Endeavor Platinum Variable Annuity Account and PFL Variable
Annuity Account A, separate accounts of PFL Life Insurance Company, the AUSA
Endeavor Variable Annuity Account, a separate account of AUSA Life Insurance
Company, Inc., and to the AUSA Series Life Account, a separate account of AUSA
Life Insurance Company, Inc., all affiliates of Western Reserve. Shares of the
Fund may in the future be sold to other separate accounts, including separate
accounts established for variable life insurance policies or variable annuity
contracts issued by Western Reserve or its affiliates. It is conceivable that,
in the future, it may become disadvantageous for variable life insurance
separate accounts and variable annuity separate accounts to invest in the Fund
simultaneously. Although neither Western Reserve nor the Fund currently
foresees any such disadvantages, either to variable life insurance policyowners
or to variable annuity contract owners, the Fund's Board of Directors intends
to monitor events in order to identify any material conflicts between the
interests of such variable life insurance policyowners and variable annuity
contract owners and to determine what action, if any, it should take. Such
action could include the sale of Fund shares by one or more of the separate
accounts, which could have adverse consequences. Material conflicts could
result from, for example, (1) changes in state insurance laws, (2) changes in
Federal income tax laws, or (3) differences in voting instructions between
those given by variable life insurance policyowners and those given by variable
annuity contract owners. If the Board of Directors were to conclude that
separate funds should be established for variable life and variable annuity
separate accounts, Western Reserve will bear the attendant expenses, but
variable life insurance policyowners and variable annuity contract owners would
no longer have the economies of scale resulting from a larger combined fund.

ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS

Western Reserve reserves the right to transfer assets of the Series
Account to another separate account which Western Reserve determines to be
associated with the class of contracts to which the Policy belongs. Western
Reserve also reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, or substitutions for the investments that
are held by any Sub-Account or that any Sub-Account may purchase. Any such
addition, deletion or substitution by Western Reserve of shares of another
Portfolio of the Fund or of another open-end, registered investment company,
will only be taken if the shares of a Portfolio are no longer available for
investment, or if in Western Reserve's judgement further investment in any
Portfolio should become inappropriate in view of the purposes of the Series
Account. Western Reserve will not add, delete or substitute any shares
attributable to a Policyowner's interest in a Sub-Account of the Series Account
without notice to and prior approval of the Commission, to the extent required
by the Investment Company Act of 1940, as amended (the "1940 Act") or other
applicable law. Nothing contained herein shall prevent the Series Account from
purchasing other securities for other Portfolios or classes of policies, or
from permitting a conversion between Portfolios or classes of policies on the
basis of requests made by Policyowners.

Western Reserve also reserves the right to establish additional
Sub-Accounts of the Series Account, each of which would invest in a new
Portfolio of the Fund, or in shares of another investment company, with a
specified investment objective. New Sub-Accounts may be established when, in
the sole discretion of Western Reserve, marketing, tax or investment conditions
warrant, and any new Sub-Accounts

21
<PAGE>

will be made available to existing Policyowners on a basis to be determined by
Western Reserve. Western Reserve may also eliminate one or more Sub-Accounts
if, in its sole discretion, marketing, tax, or investment conditions warrant.

In the event of any such substitution or change, Western Reserve may by
appropriate endorsement make such changes in this and other policies as may be
necessary or appropriate to reflect such substitution or change. If deemed by
Western Reserve to be in the best interests of persons having voting rights
under the Policies, and when permitted by law, the Series Account may be (1)
operated as a management company under the 1940 Act, (2) deregistered under
the 1940 Act in the event such registration is no longer required, (3) managed
under the direction of a committee, or (4) combined with one or more other
separate accounts, or sub-accounts.

PAYMENT AND ALLOCATION OF PREMIUMS

ISSUANCE OF A POLICY

Effective January 1, 1998, individuals wishing to purchase a Policy must
send a completed application to Western Reserve, P.O. Box 628069, Orlando,
Florida 32862-8069 for Policies submitted by World Marketing Alliance
distribution systems; and to Western Reserve, P.O. Box 628078, Orlando, Florida
32862-8078 for Policies submitted by all other distribution systems, including
ISI. Under Western Reserve's current rules, the minimum Specified Amount of a
Policy is generally $100,000. Policies will generally be issued only to Joint
Insureds ages 1 to 85 who supply satisfactory evidence of insurability
sufficient to Western Reserve. (Because a few state insurance regulatory
authorities have not yet approved Policies for issue to Joint Insureds ages
1-19, Western Reserve will only issue Policies for Joint Insureds ages 1-19 of
these states upon approval by their regulatory authorities.)

The younger Joint Insured must be no older than age 80. Further, the sum
of the ages of the Joint Insureds cannot exceed the total of 160 years (see
Policy Lapse and Reinstatement - Lapse, p. 25). Western Reserve may, however,
at its sole discretion, issue a Policy with a younger Joint Insured above the
age of 80. Acceptance is subject to Western Reserve's underwriting rules and
Western Reserve reserves the right to reject an application for any reason
permitted by law.

PREMIUMS

Subject to certain limitations, a Policyowner has flexibility in
determining the frequency and amount of premiums.

PREMIUM FLEXIBILITY. Unlike conventional insurance policies, this
Policy frees the Policyowner from the requirement that premiums be paid in
accordance with a rigid and inflexible premium schedule. Western Reserve may
require the Policyowner to pay an Initial Premium at least equal to a minimum
monthly guarantee premium set forth in the Policy before issuing the Policy.
(See Charges and Deductions - Premium Expense Charge, p. 27.) Thereafter,
subject to the minimum and maximum premium limitations described below, a
Policyowner may make unscheduled premium payments at any time in any amount.

PLANNED PERIODIC PREMIUMS. Each Policyowner will determine a Planned
Periodic Premium schedule that provides for the payment of a level premium at a
fixed interval over a specified period of time. The Policyowner is not required
to pay premiums in accordance with this schedule. Furthermore, the Policyowner
has considerable flexibility to alter the amount, frequency, and the time
period over which Planned Periodic Premiums are paid.

The payment of a Planned Periodic Premium will not guarantee that the
Policy remains In Force. Instead, the duration of the Policy depends upon the
Policy's Net Surrender Value. Thus, even if Planned Periodic Premiums are paid
by the Policyowner, the Policy will nonetheless lapse any time Net Surrender
Value is insufficient to pay certain monthly charges, and a grace period
expires without a sufficient payment. However, until the No Lapse Date as
provided in the Policy, the Policy will remain In Force and no grace period
will begin provided there has been no addition of any riders and the total of
the premiums received (minus any withdrawals and any outstanding loans) is
equal to or exceeds the minimum monthly guarantee premium set forth in the
Policy times the number of months since the Policy Date, including the current
month. (See Policy Lapse and Reinstatement - Lapse, p. 25.)

PREMIUM LIMITATIONS. In no event may the total of all premiums paid,
both scheduled and unscheduled, exceed the current maximum premium limitations
which qualify the Policy as life insurance according to Federal tax laws. If at
any time a premium is paid which would result in total premiums exceeding the
current maximum premium limitation, Western Reserve will only accept that
portion of the premium which will make total premiums equal the maximum. Any
part of the premium in excess of that amount will be returned and no further
premiums will be accepted until allowed by the current maximum premium
limitations set forth in the Policy. Every premium payment, whether scheduled
or unscheduled, must be at least the minimum payment amount required. Under
Western Reserve's current rules, the minimum payment amount is $100. Premium
payments less than this minimum amount may be returned to the Policyowner.

PAYMENT OF PREMIUMS. Payments made by the Policyowner will be treated
as a premium payment unless clearly marked as loan repayments. Certain charges
will be

22
<PAGE>

deducted from each premium payment. (See Charges and Deductions - Premium
Expense Charge, p. 27.)

As an accommodation to Policyowners, Western Reserve will accept
transmittal of Initial and subsequent Premiums of at least $1,000 by wire
transfer. For an Initial Premium, the wire transfer must be accompanied by a
simultaneous telephone facsimile transmission ("FAX") of a completed
application. An Initial Premium of $2,000 or more accepted via wire transfer
with FAX will be allocated in accordance with current procedures explained in
the next section entitled "Allocation of Premiums and Cash Value - Allocations
of Net Premiums," below. An Initial Premium made by wire transfer not
accompanied by a simultaneous FAX, or accompanied by a FAX of an incomplete
application, will be retained for a period up to five business days while
Western Reserve attempts to obtain the FAX or complete the essential
information required to establish the Policy and allocate the Initial Premium
at the unit value next determined after receipt of the FAX or information
necessary to complete the application. If Western Reserve cannot obtain the FAX
or essential information within five business days, Western Reserve will return
the Initial Premium to the applicant, unless the applicant consents to allow
Western Reserve to retain the Initial Premium until the required FAX or
essential information is received.

In the event the application with original signature is received and the
allocation instructions in that application, for any reason, are inconsistent
with those previously designated on the FAX, the Initial Premium will be
reallocated on the first Valuation Date on or following the Record Date in
accordance with the allocation instructions in the application with original
signature.

Policyowners wishing to make payments via bank wire should instruct their
banks to wire Federal Funds as follows:

Barnett Bank of Pinellas County
ABA # 063000047
For credit to: Western Reserve Life
Account #: 2452641830
Policyowner's Name:
Policy Number:
Attention: General Accounting
Fax Number: (813) 588-1600

ALLOCATION OF PREMIUMS AND CASH VALUE

NET PREMIUMS. The Net Premium equals the premium paid less the premium
expense charges. (See Charges and Deductions - Premium Expense Charge, p. 27.)
When an Initial Premium accompanies the application, monthly deductions from
the Cash Value of the Policy commence on the Policy Date.

ALLOCATION OF NET PREMIUMS. In the application for a Policy, the
Policyowner will allocate Net Premiums to one or more of the Sub-Accounts of
the Series Account, to the Fixed Account, or to a combination of both.
Notwithstanding the allocation in the application, the Initial Premium, less
charges, will first be allocated, on the first Valuation Date on or following
the Policy Date, to the Sub-Account of the Series Account that invests
exclusively in shares of the Money Market Portfolio, and will be reallocated in
accordance with the Policyowner's directions in the application on the first
Valuation Date on or following the Record Date. The Record Date of the Policy
will be the date on which the Policy is recorded on Western Reserve's books as
an In Force Policy. (See Payment and Allocation of Premiums beginning on p. 22,
and Policy Benefits - When Conditional Life Insurance Coverage Begins p. 16.)

Net Premiums paid after the Record Date will be allocated in accordance
with the Policyowner's instructions in the application. Western Reserve does
not currently require that allocation of Net Premiums to an Account meet a
minimum percentage. Western Reserve does reserve the right to limit allocation
of Net Premiums to any Account to no less than 10% of each Net Premium payment.
No fractional percentages are permitted. The allocation of future Net Premiums
may be changed without charge at any time by providing Western Reserve with
written notification from the Policyowner, or by telephone by calling Western
Reserve's toll-free number, 1-800-851-9777. Western Reserve will employ the
same procedures to confirm that such telephone instructions are genuine as it
employs regarding transfers among Sub-Accounts and the Fixed Account by
telephone. Upon instructions from the Policyowner, the registered
representative/agent of record may also change the allocation of future Net
Premiums. Western Reserve reserves the right to limit the number of changes of
the allocation of Net Premiums to one per year. Investment returns from the
amounts allocated to Sub-Accounts of the Series Account will vary with the
investment experience of these Sub-Accounts and the Policyowner bears the
entire investment risk.

TRANSFERS. Cash Value may be transferred among the Sub-Accounts of the
Series Account or from the Sub-Accounts to the Fixed Account. Transfers may
also be made from the Fixed Account to the Sub-Accounts, subject to certain
restrictions. (See The Fixed Account - Allocations, Transfers and Withdrawals,
p. 36.) The amount of Cash Value available for transfer from any Sub-Account,
or the Fixed Account, is determined at the end of the Valuation Period during
which the transfer request is received at Western Reserve's Office. The net
asset value for each share of the corresponding Portfolio of any Sub-Account is
determined, once daily, as of the close of the regular business session of the
New York Stock Exchange ("Exchange") (usually 4:00

23
<PAGE>

p.m., Eastern time), which coincides with the end of each Valuation Period.
(See Policy Benefits - Cash Value - Valuation Date and Valuation Period, p.
18.) Therefore, any transfer request received after the close of the regular
business session of the Exchange, on any day the Exchange is open, will be
processed on the next day the Exchange is open for business, utilizing the net
asset value for each share of the applicable Portfolio determined as of the
close of the regular business session of the Exchange. Cash Value available for
transfer from the Fixed Account will be determined in the same manner.

Policyowners may make transfer requests in writing, or by telephone.
Written requests must be in a form acceptable to Western Reserve. The
registered representative/agent of record for the Policy may, upon instruction
from the Policyowner for each transfer, make telephone transfers upon request
without the necessity for the Policyowner to have previously authorized
telephone transfers in writing. If, for any reason, a Policyowner does not want
the ability to make transfers by telephone, the Policyowner should provide
written notice to Western Reserve at its Office. All telephone transfers should
be made by calling Western Reserve at the toll-free number: 1-800-851-9777.
Western Reserve will not be liable for complying with telephone instructions it
reasonably believes to be authentic, nor for any loss, damage, cost or expense
in acting on such telephone instructions, and Policyowners will bear the risk
of any such loss. Western Reserve will employ reasonable procedures to confirm
that telephone instructions are genuine. If Western Reserve does not employ
such procedures, it may be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others, requiring forms of
personal identification prior to acting upon such telephone instructions,
providing written confirmation of such transactions to Policyowners and/or tape
recording of telephone transfer request instructions received from
Policyowners. Western Reserve may, at any time, revoke or modify the transfer
privilege. Under Western Reserve's current procedures, it will effect transfers
and determine all values in connection with transfers at the end of the
Valuation Period during which the transfer request is received at Western
Reserve's Office.

Twelve Cash Value transfers are permitted without charge during any one
Policy year. Western Reserve will impose a charge of $10 for each subsequent
transfer. The transfer charge will not be increased. (See Optional Cash Value
Charges - Cash Value Transfers, p. 29.) All transfers made in any one day will
be considered a single transfer and any transfer charges will be deducted in an
equal amount from each Sub-Account from which a transfer was made. Transfers
resulting from policy loans, the exercise of conversion rights, and the
reallocation of Cash Value immediately after the Record Date, will not be
treated as a transfer for the purpose of this charge. No transfer charge will
apply to transfers from the Fixed Account to a Sub-Account or to the exercise
of the conversion rights. (See Policy Rights - Conversion Rights, p. 33.)

Western Reserve or an affiliate may provide administrative or other
support services to independent third parties authorized by Policyowners to
conduct transfers on a Policyowner's behalf, or who provide recommendations as
to how Sub-Account values should be allocated. This includes, but is not
limited to, transferring Sub-Account values among Sub-Accounts in accordance
with various investment allocation strategies such third party may employ. Such
independent third parties may or may not be appointed Western Reserve agents
for the sale of Policies. However, WESTERN RESERVE DOES NOT ENGAGE ANY THIRD
PARTIES TO OFFER INVESTMENT ALLOCATION SERVICES OF ANY TYPE, SO THAT PERSONS OR
FIRMS OFFERING SUCH SERVICES DO SO INDEPENDENT FROM ANY AGENCY RELATIONSHIP
THEY MAY HAVE WITH WESTERN RESERVE FOR THE SALE OF POLICIES. WESTERN RESERVE
THEREFORE TAKES NO RESPONSIBILITY FOR THE INVESTMENT ALLOCATIONS AND TRANSFERS
TRANSACTED ON A POLICYOWNER'S BEHALF BY SUCH THIRD PARTIES OR ANY INVESTMENT
ALLOCATION RECOMMENDATIONS MADE BY SUCH PARTIES. Western Reserve does not
currently charge a Policyowner any additional fees for providing these support
services.

DOLLAR COST AVERAGING

The Policyowner may direct Western Reserve to automatically transfer
specified amounts from the Money Market Sub-Account, the Bond Sub-Account, the
Fixed Account or any combination of these Accounts on a monthly basis to a
Sub-Account. This service is intended to allow the Owner to utilize "Dollar
Cost Averaging," a long-term investment strategy which provides for regular,
level investments over time. Western Reserve makes no guarantees that Dollar
Cost Averaging will result in a profit or protect against loss. To qualify for
Dollar Cost Averaging a minimum of $10,000 must be in each Account from which
transfers will be made and at least $1,000, in the aggregate, must be
transferred each month, unless Western Reserve consents to a smaller amount.

To further qualify for Dollar Cost Averaging from the Fixed Account, no
more than one-tenth (1/10) of the amount in the Fixed Account at the
commencement of Dollar Cost Averaging can be transferred each month. Other
types of transfers from the Fixed Account may also be subject to certain other
restrictions. (See The Fixed Account -- Allocations, Transfers and Withdrawals
on p. 36.)

A written election of this service, on a form provided by Western
Reserve, must be completed by the Policyowner in order to begin transfers. The
first transfer will occur during the month which follows receipt of the form,
providing the

24
<PAGE>

form is received by the 25th day of the month. Once elected, transfers from the
Money Market or Bond Sub-Accounts or the Fixed Account will be processed
monthly until the entire value of each Account from which transfers are made is
completely depleted or the Policyowner instructs Western Reserve in writing to
cancel the monthly transfers. For example, if $15,000 was allocated to the
Money Market Sub-Account and $10,000 was allocated to the Bond Sub-Account and
transfers of $500 are made each month from each of these Sub-Accounts to the
Growth Sub-Account, transfers of $500 per month would continue to be made from
the Money Market Sub-Account even though transfers from the Bond Sub-Account
had ceased as a result of depletion of value.

There is no charge for Dollar Cost Averaging. However, each transfer
which occurs under the Dollar Cost Averaging service will be counted towards
the twelve free transfers allowed during each Policy year. (See Allocation of
Premiums and Cash Value - Transfers on p. 23.) Western Reserve may discontinue,
modify, or suspend Dollar Cost Averaging at any time, following prior written
notice to Policyowners. Dollar Cost Averaging is not available if the Owner has
elected the Asset Rebalancing Program, or has elected an asset allocation
service provided by a third party.

ASSET REBALANCING PROGRAM

Western Reserve will offer a program under which the Policyowner may
authorize Western Reserve to transfer automatically Cash Value periodically to
maintain a particular percentage allocation among the Sub-Accounts. The Cash
Value allocated to each Sub-Account will grow or decline in value at different
rates. The Asset Rebalancing Program automatically reallocates the Cash Value
in the Sub-Accounts at the end of each period to match the Contract's currently
effective Net Premium allocation schedule. The Asset Rebalancing Program is
intended to transfer Cash Value from those Sub-Accounts that have increased in
value to those Sub-Accounts that have declined in value. Over time, this method
of investing may help an Owner buy low and sell high. This investment method
does not guarantee gains, nor does it assure that any Sub-Account will not have
losses.

To qualify for Asset Rebalancing, a minimum Cash Value of $10,000 for an
existing Policy, or a minimum Initial Premium of $10,000 for a new Policy, is
required. To participate in the Asset Rebalancing Program, a properly completed
Asset Rebalancing Request Form must be received by Western Reserve at its
Administrative Office. An Asset Rebalancing Form is available upon request.

Owners may elect rebalancing to occur on each quarterly, semi-annual or
annual anniversary of the Policy Date. Following receipt of the Asset
Rebalancing Request Form, Western Reserve will effect the initial rebalancing
of Cash Value on the next such anniversary, in accordance with the Policy's
current Net Premium allocation schedule. The amounts transferred will be
credited at the unit value next determined on the dates the transfers are made.
If a day on which rebalancing would ordinarily occur falls on a day on which
the New York Stock Exchange is closed, rebalancing will occur on the next day
the New York Stock Exchange is open. The Asset Rebalancing Program is available
only before the Maturity Date, and is not available if the Policyowner has
elected Dollar Cost Averaging, or has elected an asset allocation service
provided by a third party. There is no charge for the Asset Rebalancing
Program. However, each reallocation which occurs under the Asset Rebalancing
Program will be counted towards the twelve free transfers allowed during each
Policy year. (See Allocation of Premiums and Cash Value - Transfers on p. 23.)

The Policyowner may terminate participation at any time in the Asset
Rebalancing Program by oral or written request to Western Reserve.
Participation in the Asset Rebalancing Program will terminate automatically if
any transfer is made to, or from, any Sub-Account, other than on account of a
scheduled rebalancing. If the Policyowner wishes to resume the Asset
Rebalancing Program after it has been canceled, a new Asset Rebalancing Request
Form must be completed and sent to Western Reserve. The Policyowner may start
and stop participation in the Asset Rebalancing Program at any time; however,
Western Reserve reserves the right to restrict entry into the Asset Rebalancing
Program to once per Policy year. Cash Value allocated to the Fixed Account may
not be included in the Asset Rebalancing Program.

Western Reserve may discontinue, modify, or suspend, the Asset
Rebalancing Program at any time following prior written notice to Policyowners.

POLICY LAPSE AND REINSTATEMENT

LAPSE. Unlike conventional life insurance policies, the failure to make
a Planned Periodic Premium payment will not itself cause the Policy to lapse.
Conversely, paying all Planned Periodic Premium payments will not necessarily
guarantee that the Policy will not lapse. For instance, if the conditions
explained below are not met, the Policy may lapse prior to the No Lapse Date.
Lapse will only occur where Net Surrender Value is insufficient on any Monthly
Anniversary to cover the monthly deductions, and a grace period expires without
a sufficient payment by the Policyowner. If the Net Surrender Value on any
Monthly Anniversary is not sufficient to cover the monthly deductions on such
day, Western Reserve will mail a notice to the last known address of the
Policyowner(s) and any assignee of record. A grace period of 61 days after the
mailing date of the notice will be allowed for the payment of premiums. The
notice will specify the minimum payment and the final date on which such
payment

25
<PAGE>

must be received by Western Reserve to keep the Policy In Force. (See Charges
and Deductions, p. 27.)

However, until the No Lapse Date as provided in the Policy, the Policy
will not lapse and no grace period will begin, provided: (1) no riders have
been added since the Policy Date, and (2) the total of the premiums received
(minus any withdrawals and any outstanding loans) equal or exceed the minimum
monthly guarantee premium shown in the Policy times the number of months since
the Policy Date, including the current month and, (3) the excess indebtedness
(total of all Policy loans less any unearned loan interest on Policy loans)
does not exceed the Cash Value (see Policy Rights - Loan Privileges, p. 30).
Should the Policyowner(s) request the addition of any rider after the Policy
Date but prior to the No Lapse Date, the Policyowner(s) will be notified as to
the effect on grace period processing prior to the date the rider is effective.

Essentially, the Policy will not lapse during the period from the Policy
Date until the No Lapse Date (the "No Lapse Period"), as long as the conditions
in (1), (2) and (3) immediately above have been met, and even though Net
Surrender Value at any point during the No Lapse Period is insufficient to
cover a monthly deduction and the grace period has expired without a payment
sufficient to cover the monthly deduction. Such a Lapse could happen if the
investment experience has been sufficiently unfavorable to have resulted in a
decrease in the Net Surrender Value, or the Net Surrender Value has decreased
because not enough premiums have been paid to offset the monthly charges.

When the conditions in (1), (2) and (3) above have not been met, or they
have been met, but the Policy is beyond the No Lapse Date, and Net Surrender
Value is insufficient to cover the monthly deduction, Western Reserve will
notify the Policyowner and any assignee of record of the minimum payment needed
to keep the Policy In Force. The Policyowner will then have a grace period of
61 days, measured from the date notice is mailed to the Policyowner, for
Western Reserve to receive sufficient payments. If Western Reserve does not
receive a sufficient payment within the grace period, Lapse of the Policy will
result. If a sufficient payment is received during the grace period, any
resulting Net Premium will be allocated among the Accounts, and any monthly
deductions due will be charged to such Accounts, in accordance with the
Policyowner's then current instructions. (See Allocation of Premiums and Cash
Value - Allocation of Net Premiums, p. 23, and Charges and Deductions - Cash
Value Charges, p. 28.) If the Surviving Insured dies during the grace period,
the death benefit proceeds will equal the amount of the death benefit proceeds
immediately prior to the commencement of the grace period, reduced by any due
and unpaid charges.

The duration of the period of time between the Policy Date and the No
Lapse Date is selected by the Policyowner at time of application for the
Policy, and may be either, (1) the later of attained target premium age 65 or
five Policy years, or (2) the later of attained target premium age 75 or ten
Policy years. The amount of the minimum monthly guarantee premium will vary
according to whether (1) or (2) is chosen. Neither (1) nor (2) may exceed
target premium age 85. The target premium age equals the average of the ages of
the Joint Insureds at time of Policy issue, rounded down to the closer age, not
to exceed the younger Joint Insured's age, plus ten years. For example, if the
ages of the Joint Insureds at time of Policy issue are 46 and 48, the target
premium age is 47. If the ages at time of Policy issue are 45 and 48, the
target premium age is 46. If the ages at time of Policy issue are 50 and 80,
the target premium age is 60. The target premium attained age equals the target
premium age plus the number of completed Policy years.

REINSTATEMENT. A lapsed Policy may be reinstated any time within five
years after the date of lapse and before the Maturity Date by submitting the
following items to Western Reserve:

1. A written application for reinstatement from the Policyowner;

2. Evidence of insurability from each Joint Insured satisfactory to
Western Reserve; and

3. A premium that, after the deduction of premium expense charges, is
large enough to cover:

(a) one monthly deduction at the time of termination;

(b) the next two monthly deductions which will become due after the
time of reinstatement; and

Western Reserve reserves the right to decline a reinstatement request.
Any indebtedness on the date of Lapse will not be reinstated. The Cash Value of
the Loan Reserve on the date of reinstatement will be zero. The amount of Net
Surrender Value on the date of reinstatement will be equal to the Net Premiums
paid at reinstatement, less the amounts paid in accordance with 3(a) and (c)
above.

Upon approval of the application for reinstatement, the effective date of
reinstatement will be the first Monthly Anniversary on or next following the
date Western Reserve approves the application for reinstatement.

26
<PAGE>

CHARGES AND DEDUCTIONS

Charges will be deducted in connection with the Policy to compensate
Western Reserve for: (1) providing the insurance benefits set forth in the
Policy and any optional insurance benefits added by rider; (2) administering
the Policy; (3) assuming certain risks in connection with the Policy; and (4)
incurring expenses in distributing the Policy. The nature and amount of these
charges are described more fully below.

PREMIUM EXPENSE CHARGE

Prior to allocation of Net Premiums among the Accounts, premiums paid
through the end of the tenth Policy year will be reduced by a Premium Expense
Charge equal to 6.00% of premiums to compensate Western Reserve for
distribution expenses and premium taxes incurred in connection with the Policy.
After the tenth Policy year, the Premium Expense Charge reduces to 2.5%.

CONTINGENT SURRENDER CHARGES

If the Policy is totally surrendered (or the Net Surrender Value is
applied under a settlement option) prior to the end of the fifteenth (15th)
Policy year, a surrender charge for the initial Specified Amount will be
deducted from the Policy's Cash Value. The surrender charge consists of the sum
of:

(a) an administrative component (DEFERRED ISSUE CHARGE), and

(b) a sales component (DEFERRED SALES CHARGE).

The sum of (a) and (b) are multiplied by (c), the applicable SURRENDER
CHARGE PERCENTAGE.

(a) DEFERRED ISSUE CHARGE. The deferred issue charge is a level charge
of $5.00 per thousand of initial Specified Amount. This charge is to assist
Western Reserve in recovering the underwriting, processing and start-up
expenses incurred in connection with the Policy and the Series Account. These
expenses include the cost of processing applications, conducting medical
examinations, determining insurability and the Joint Insured's rate class, and
establishing Policy records.

(b) DEFERRED SALES CHARGE. The deferred sales charge is (1) 26.5% of
the sum of all premiums paid up to the Guideline Premium shown in the Policy
and, (2) for the sum of all premiums paid in excess of the first Guideline
Premium ("excess premium charge"), a percentage which varies by the Issue Age
and sex of the younger Joint Insured as follows:

<TABLE>
<CAPTION>
Excess Premium Issue Age Range
Charge (Younger Joint Insured)
- ---------------- ------------------------
<S> <C>
4.2% 1-55
3.7% 56-63
3.1% 64-68
2.5% 69-73
2.0% 74-76
1.6% 77-78
1.2% 79-80
</TABLE>

The deferred sales charge is designed to assist Western Reserve in
recovering distribution expenses incurred in connection with the Policy,
including agent sales commissions, the cost of printing prospectuses and sales
literature, and any advertising costs. The proceeds of the charge may not be
sufficient to cover these expenses. To the extent they are not, Western Reserve
will cover the shortfall from its General Account assets, which may include
profits from the mortality and expense risk charge under the Policy.

(c) SURRENDER CHARGE PERCENTAGE. As stated above, the percentage is
applied to the sum of the deferred issue charge and deferred sales charge due
upon any surrender of a Policy during the first fifteen Policy years. In Policy
years 1-10 this percentage is 100% for Joint Insureds when the age of the
younger of the Joint Insureds is between Ages 0-74, and then declines at the
rate of 20% per year until reaching zero at the end of the fifteenth (15th)
Policy year as shown below. For Joint Insureds when the age of the younger of
the Joint Insureds is between Issue Ages 75-80, this percentage is 100% until
the end of the sixth (6th) Policy year, and declines to 0% at the end of the
fifteenth (15th) Policy year. Therefore, application of the percentage to the
deferred issue charge and deferred sales charge in the event of any surrender
during the eleventh through fifteenth Policy year will result in reduced
surrender charges. If a surrender occurs after the fifteenth

27
<PAGE>

(15th) Policy year, there are no deferred issue or deferred sales charges due.
See Example (2) below.

SURRENDER CHARGE PERCENTAGES

<TABLE>
<CAPTION>
Younger Age
------------------
Less 75 or
End of Policy Year* Than 75 Above
- -------------------- --------- ------
<S> <C> <C>
At Issue 100% 100%
1-6 100% 100%
7 100% 97%
8 100% 88%
9 100% 80%
10 100% 73%
11 80% 66%
12 60% 60%
13 40% 40%
14 20% 20%
15+ 0% 0%
</TABLE>

* THE CHARGE ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE INTERPOLATED BETWEEN
THE TWO END OF YEAR CHARGES.

(d) EXAMPLE (1) Assume a male non-tobacco user age 35 and a female
non-tobacco user age 35 purchase a Policy for $100,000 of Specified Amount,
paying the Guideline Premium of $806.11, and an additional premium amount of
$193.89 in excess of the Guideline Premium, for a total premium of $1,000 per
year for four years ($4,000 total for four years), and then surrenders the
Policy. The surrender charge would be calculated as follows:

<TABLE>
<S> <C> <C> <C>
(a) Deferred Issue Charge - [100 x $5.00]
($5.00/$1,000 of Initial Specified Amount) = $500.00
(b) Deferred Sales Charge:
(1) 26.5% of Guideline
Premium paid
[26.5% x $806.11], and = $213.62
(2) 4.2% of premiums paid in excess
of Guideline Premium
[4.2% x ( (4 x 1,000) - $806.11)] = $134.14
(c) Applicable Surrender Charge = 100%
[(a)$500.00 + (b)($213.62 + $134.14)]
x 100%
SURRENDER CHARGE = 847.76 x 100% = $847.76
=======
</TABLE>

EXAMPLE (2) - Assume the same facts as in Example (1), EXCEPT the Owner
surrenders the Policy on the 14th Policy Anniversary:

<TABLE>
<S> <C> <C> <C>
(a) Deferred Issue Charge - [100 x $5.00] = $500.00
(b) Deferred Sales Charge:

</TABLE>
<TABLE>
<S> <C> <C> <C>
(1) [26.5% x $806.11], and = $213.62
(2) [4.2% x ( (14 x 1,000) - $806.11)] = $554.14
(c) Applicable Surrender Charge = 20%
[(a)$500.00 + (b)($213.62 + $554.14)]
x 20%
SURRENDER CHARGE = $1,267.76 x 20% = $253.55
=======
</TABLE>

If the Owner waits until the 15th Policy Anniversary or after, there will
be no surrender charge.

For Policies issued in the state of Pennsylvania, the following surrender
charge percentage table applies.

SURRENDER CHARGE PERCENTAGES

<TABLE>
<CAPTION>
Issue Issue Issued
Policy Year Ages 20-69 Ages 70-74 Ages 75-80
- ------------- ------------ ------------ -----------
<S> <C> <C> <C>
1 100% 100% 100%
2 100% 100% 96%
3 100% 100% 89%
4 100% 100% 83%
5 100% 95% 77%
6 100% 90% 73%
7 100% 85% 68%
8 100% 80% 65%
9 95% 76% 61%
10 90% 72% 58%
11 80% 68% 55%
12 60% 60% 51%
13 40% 40% 40%
14 20% 20% 20%
15 0% 0% 0%
</TABLE>

CASH VALUE CHARGES

Charges will be deducted monthly from the Cash Value of each Policy
("monthly deduction") to compensate Western Reserve for certain administrative
costs, the cost of insurance, the monthly death benefit guarantee charge, and
optional benefits added by rider. The monthly deduction will be deducted on
each Monthly Anniversary, and will be allocated among the Accounts on the same
basis as Net Premiums are allocated. If the value of any Account is
insufficient to pay its part of the monthly deduction, the monthly deduction
will be taken on a pro rata basis from all Accounts. Because portions of the
monthly deduction, such as the cost of insurance, can vary from month-to-month,
the monthly deduction itself will vary in amount from month-to-month.

COST OF INSURANCE. Western Reserve will determine the monthly cost of
insurance charge by multiplying the applicable cost of insurance rates by the
net amount at risk for each Policy Month. The net amount at risk for a Policy
Month is (a) the death benefit at the beginning of the Policy

28
<PAGE>

Month divided by 1.0032737 (which reduces the net amount at risk, solely for
purposes of computing the cost of insurance, by taking into account assumed
monthly earnings at an annual rate of 4%), less (b) the Cash Value at the
beginning of the Policy Month.

Cost of insurance rates will be based on the sex, Attained Age and rate
class of the Joint Insureds, and the length of time a Policy has been In Force.
The actual monthly cost of insurance rates will be based on Western Reserve's
expectations as to future experience. They will not, however, be greater than
the guaranteed cost of insurance rates set forth in the Policy. These
guaranteed rates are based on the 1980 Commissioners Standard Ordinary ("1980
C.S.O."), age nearest birthday, Mortality Tables and the sex, Attained Age and
rate class of each Joint Insured. The rate class of each Joint Insured is
either Select (non-tobacco user), or Standard (tobacco user) or a class which
reflects some substandard classification. There is no rate discount for a
preferred class. For standard rate classes, I.E., either tobacco user or non-
tobacco user classes not rated, these rates will not exceed rates contained in
the 1980 C.S.O. Tables. Western Reserve also may guarantee that actual cost of
insurance rates will not be changed for a specified period of time (E.G., one
year). Any change in the cost of insurance rates will apply to all Joint
Insureds of the same age, sex, and rate class whose Policies have been In Force
for the same length of time.

The Policies offered by this Prospectus are based on mortality tables
that distinguish between men and women. As a result, the Policy pays different
benefits to Joint Insureds who are either both men or women of the same age.
The State of Montana prohibits the use of actuarial tables that distinguish
between men and women in determining premiums and policy benefits for policies
issued on the lives of its residents. The State of Massachusetts formerly had a
similar prohibition and has introduced legislation which may reinstate such
prohibition. Policies offered by this Prospectus to insure residents of Montana
will have premiums and benefits which are based on actuarial tables that do not
differentiate on the basis of sex.

The rate class of each Joint Insured will affect the cost of insurance
rate. For this Policy, Western Reserve currently places Joint Insureds into the
following three nonsub-standard rate classes: combination of two non-tobacco
users, combination of two tobacco users and the combination of a tobacco user
and a non-tobacco user; as well as various other sub-standard rate classes
involving a higher mortality risk. In an otherwise identical Policy, the cost
of insurance rate is generally higher for tobacco use than for non-tobacco use.

Western Reserve may also issue certain Policies on a "simplified" or
expedited basis to certain categories of individuals (for example, Policies
issued at a predetermined Specified Amount or underwritten on a group basis).
Policies issued on this basis will have guaranteed cost of insurance rates no
higher than the guaranteed rates for Select or Standard categories (as
appropriate); however, due to the special underwriting criteria established for
these issues, actual rates may be higher or lower than the current cost of
insurance rates charged under otherwise identical Policies that are
underwritten using standard underwriting criteria.

MONTHLY DEATH BENEFIT GUARANTEE CHARGE. Western Reserve will deduct a
monthly death benefit guarantee charge from each Policy to compensate Western
Reserve for the risk of guaranteeing the death benefit for the period chosen by
the Owner on the application provided a minimum level of premiums are received.
The amount of this charge is set forth on the Policy Schedule Page and will be
$0.04 per $1,000 of initial Specified Amount for all classes of Policies. This
charge will only be levied during the period between the Policy Date and the No
Lapse Date. (See Policy Lapse and Reinstatement - Lapse, p. 25.)

MONTHLY POLICY CHARGE. Western Reserve has primary responsibility for
the administration of the Policy and the Series Account. Annual administrative
expenses include recordkeeping, processing death benefit claims, Policy
changes, reporting and overhead costs. As reimbursement for administrative
expenses related to the maintenance of each Policy and the Series Account,
Western Reserve assesses a monthly administration charge from each Policy. This
charge is currently $5.00 per Policy Month. Western Reserve reserves the right
to increase this charge, but it is guaranteed not to exceed $10.00 per Policy
Month. Western Reserve reserves the right to waive the Monthly Policy Charge on
additional policies issued to existing Policyowners at the time the second
policy is issued.

OPTIONAL CASH VALUE CHARGES

The following optional Cash Value charges will be deducted from the
Policy as the result of changes or elections made to the Policy and initiated
by the Policyowner.

OPTIONAL INSURANCE BENEFITS. The monthly deduction will include charges
for any optional insurance benefits added to the Policy by rider.

CASH VALUE TRANSFERS. After twelve (12) free transfers per year,
Western Reserve will impose and deduct from each amount transferred a transfer
charge of $10 to compensate Western Reserve for the costs in effectuating the
transfer. The transfer charge will not be increased in the future.

CASH WITHDRAWALS. A processing fee equal to the lesser of $25 or 2% of
the amount withdrawn will be deducted from amounts withdrawn from the Policy
and the balance will then be paid to the Policyowner. This fee will not be
increased.

29
<PAGE>

CHARGES AGAINST THE SERIES ACCOUNT

Certain expenses will be deducted as a percentage of the value of the net
assets of the Series Account to compensate Western Reserve for certain risks
assumed in connection with the Policy.

MORTALITY AND EXPENSE RISK CHARGE. Western Reserve will deduct a daily
charge from the Series Account at an annual rate of 0.90% of the average daily
net assets of the Series Account. Under Western Reserve's current procedures,
these amounts are paid to the General Account monthly.

The mortality risk assumed by Western Reserve is that the Surviving
Insured may live for a shorter time than projected. The expense risk assumed is
that expenses incurred in issuing and administering the Policies will exceed
the limits on administrative charges set in the Policies. Western Reserve also
assumes risks with respect to other contingencies including the incidence of
Policy loans, which may cause Western Reserve to incur greater costs than
anticipated when designing the Policies.

TAXES. Currently no charge is made to the Series Account for Federal
income taxes that may be attributable to the Series Account. Western Reserve
may, however, make such a charge in the future. Charges for other taxes, if
any, attributable to the Series Account may also be made. (See Federal Tax
Matters, p. 37.)

EXPENSES OF THE FUND

Because the Series Account purchases shares of the Portfolios of the
Fund, the net assets of the Series Account will reflect the investment
management fee and other expenses incurred by the Fund. (See p. 6 for a table
of the Fund Annual Expenses and pp. 19-21 for a discussion of the investment
management fees of each Portfolio.)

Effective January 1, 1997, the Fund adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to
the Plan, entered into a Distribution Agreement with ISI, principal underwriter
for the Fund.

Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for expenses
incurred in connection with the distribution of a Portfolio's shares, amounts
equal to actual expenses associated with distributing a Portfolio's shares, up
to a maximum rate of 0.15% (fifteen one-hundredths of one percent) on an
annualized basis of the average daily net assets. This fee is measured and
accrued daily and paid monthly. ISI has determined that it will not seek
payment by the Fund of distribution expenses incurred with respect to any
Portfolio during the fiscal year ending December 31, 1998. Prior to ISI seeking
reimbursement, Policyowners will be notified in advance.

GROUP OR SPONSORED POLICIES

A different form of the Policy may be purchased under group or sponsored
arrangements ("Group/Sponsored Policies"). Under Group/Sponsored Policies, a
trustee, employer or similar entity purchases individual policies covering a
group of individuals on a group basis. Examples of such arrangements are
employer-sponsored benefit plans which are qualified under Section 401 of the
Internal Revenue Code and deferred compensation plans. A "sponsored
arrangement" includes a program under which an employer permits group
solicitation of its employees or an association permits group solicitation of
its members for the purchase of Policies on an individual basis.

For Group/Sponsored Policies the premium expense charges, contingent
surrender charges, minimum premium and minimum Specified Amount described in
"Charges and Deductions" and "Payment and Allocation of Premiums",
respectively, may be reduced. Western Reserve will issue Group/Sponsored
Policies in accordance with its rules in effect as of the date an application
for a Policy is approved. To qualify for Group/Sponsored Policies, a group or
sponsored arrangement must satisfy certain criteria as to, for example, size
and number of years in existence. Generally, the sales contacts and effort,
administrative costs and mortality cost for Group/Sponsored Policies take into
account such factors as the size of the group or sponsored arrangement, its
stability as indicated by its term of existence, the purposes for which
Group/Sponsored Policies are purchased and certain characteristics of its
members. The Group/Sponsored Policy's amount of reduction and the criteria for
qualification will reflect the reduced sales effort resulting from sales to
qualifying groups and sponsored arrangements. Group/Sponsored Policies may not
be available in certain states.

Western Reserve may modify from time to time on a uniform basis the
criteria for qualification for Group/ Sponsored Policies. In no event,
however, will group or sponsored arrangements established for the sole purpose
of purchasing Group/Sponsored Policies, or which have been in existence for
less than six months, qualify for such Policies. Group/Sponsored Policies will
not be unfairly discriminatory against any person, including the affected
Policyowners and all other Policyowners of other forms of Policies funded by
the Series Account.

In 1983 the United States Supreme Court held that certain insurance
policies, the benefits under which vary based on sex, may not be used to fund
certain employer-sponsored benefit plans and fringe benefit programs. Western
Reserve recommends that any employer proposing to offer the Group/ Sponsored
Policies to employees under a group or sponsored

30
<PAGE>

arrangement consult his or her attorney before doing so. (See Federal Tax
Matters - Employment-Related Benefit Plans, p. 40.)

ASSOCIATE POLICIES

Certain employees, field associates, directors and their relatives may
purchase a different form of the Policy ("Associate Policy") under which
Western Reserve, in addition to waiving or reducing the premium expense
charges, contingent surrender charges, minimum premium and minimum Specified
Amount, may waive or reduce the Monthly Policy Charge and the Surrender Charge.
The Associate Policy is available to (a) current and retired directors,
officers, full-time employees and agents of Western Reserve and its affiliates;
(b) current and retired directors, officers, full-time employees and registered
representatives of ISI and any broker-dealer which has a sales agreement with
ISI; (c) any Trust, pension, profit-sharing or other employee benefit plan of
any of the foregoing persons or entities; (d) current and retired directors,
officers and full-time employees of WRL Series Fund, Inc. and the IDEX Series
Fund, and any investment adviser or investment sub-adviser thereto; and (e) any
member of a family of any of the foregoing (E.G., spouse, child, sibling,
parent-in-law). Western Reserve reserves the right to modify or terminate this
arrangement at any time. The Associate Policy may not be available in certain
states.

POLICY RIGHTS

LOAN PRIVILEGES

POLICY LOAN. After the first Policy year and so long as the Policy
remains In Force, the Policyowner may borrow money from Western Reserve using
the Policy as the only security for the loan. Western Reserve reserves the
right to permit a Policy loan prior to the first Policy Anniversary for
Policies issued pursuant to a transfer of cash values from another life
insurance policy under Section 1035(a) of the Internal Revenue Code of 186, as
amended. The maximum amount that may be borrowed is 90% of the Cash Value, less
any surrender charge and any already outstanding Policy loan. Western Reserve
reserves the right to limit the amount of any Policy loan to no less than $500.
Outstanding loans have priority over the claims of any assignee or other
person. The loan may be repaid totally or in part before the Maturity Date of
the Policy and while the Policy is In Force. A loan which is taken from, or
secured by, a Policy may have Federal income tax consequences. (See Federal Tax
Matters, p. 37.)

An amount equal to the loan plus interest in advance until the next
Policy Anniversary will be withdrawn from the Account or Accounts specified and
transferred to the Loan Reserve until the loan is repaid. The Loan Reserve is a
portion of the Fixed Account used as Collateral for a Policy loan. The
Sub-Accounts of the Series Account may be specified. If no Account is
specified, the loan amount will be withdrawn from each Account in the same
manner as the current allocation instructions.

The amount of the loan will normally be paid within seven days after
receipt of a proper request in a manner permitted by Western Reserve.
Postponement of loans may take place under certain conditions. (See General
Provisions - Postponement of Payments, p. 34.) Under Western Reserve's current
procedures, at each Anniversary, Western Reserve will compare the amount of the
outstanding loan (including loan interest in advance until the next Policy
Anniversary, if not paid) to the amount in the Loan Reserve (including interest
credited to the Loan Reserve during the previous Policy year). Western Reserve
will also make this comparison any time the Policyowner repays all or part of
the loan or makes a request to borrow an additional amount. At each such time,
if the amount of the outstanding loan exceeds the amount in the Loan Reserve,
Western Reserve will withdraw the difference from the Accounts and transfer it
to the Loan Reserve in the same manner as when a loan is made. If the amount in
the Loan Reserve exceeds the amount of the outstanding loan, Western Reserve
will withdraw the difference from the Loan Reserve and transfer it to the
Accounts in accordance with the Policyowner's current allocation instructions.
Western Reserve reserves the right to require the transfer of such amounts to
the Fixed Account, if such loans were originally transferred from the Fixed
Account. (See The Fixed Account, p. 36.) No charge will be imposed for these
transfers.

INTEREST RATE CHARGED. The interest rate charged on Policy loans will
be at the rate of 5.2% payable annually in advance. If unpaid when due,
interest will be added to the amount of the loan and will become part of the
loan and bear interest at the same rate. Interest paid on a Policy loan is
generally not tax deductible.

LOAN RESERVE INTEREST RATE CREDITED. The amount transferred to the Loan
Reserve will accrue interest at a minimum effective annual rate not less than
4%. Western Reserve may credit a higher rate, but is not obligated to do so.
Currently, Western Reserve is crediting an effective annual interest rate of
4.75% on all amounts borrowed during the first ten Policy years. On amounts
borrowed, after the tenth Policy year, that are part of the Cash Value in
excess of the cost basis (premiums less withdrawals) of the Policy the interest
rate credited is currently equal to the interest rate being charged on the
total loan while the remaining portion, if any, of the loan is credited the
current rate of 4.75%.

EFFECT OF POLICY LOANS. A Policy loan affects the Policy because the
death benefit and Net Surrender Value under the Policy are reduced by the
amount of the loan. Repayment of the loan causes the death benefit and Net
Surrender Value to increase by the amount of the repayment.

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As long as a loan is outstanding, an amount equal to the loan plus
interest in advance until the next Policy Anniversary is held in the Loan
Reserve. This amount will not be affected by the Series Account's investment
performance. Amounts transferred from the Series Account to the Loan Reserve
will affect the Series Account value because such amounts will be credited with
an interest rate declared by Western Reserve rather than a rate of return
reflecting the investment performance of the Series Account. (See The Fixed
Account - Minimum Guaranteed and Current Interest Rates, p. 36.)

There are risks involved in taking a Policy loan, a few of which include
the potential for a Policy to lapse if projected earnings, taking into account
outstanding loans, are not achieved, as well as adverse tax consequences which
occur if a Policy lapses with loans outstanding. (See Federal Tax Matters - Tax
Treatment of Policy Benefits, p. 38.)

INDEBTEDNESS. Indebtedness equals the total of all Policy loans less
any unearned loan interest on the loans. If indebtedness exceeds the Cash Value
less the then applicable surrender charge, Western Reserve will notify the
Policyowner and any assignee of record. If a sufficient payment equal to excess
indebtedness is not received by Western Reserve within 61 days from the date
notice is sent, the Policy will lapse and terminate without value. The Policy,
however, may later be reinstated. (See Policy Lapse and Reinstatement, p. 25.)

REPAYMENT OF INDEBTEDNESS. Indebtedness may be repaid any time before
the Maturity Date of the Policy and while the Policy is In Force. Payments made
by the Policyowner while there is indebtedness will be treated as premium
payments unless the Policyowner indicates that the payment should be treated as
a loan repayment. (See Policy Rights - Benefits at Maturity, p. 33.) If not
repaid, Western Reserve may deduct indebtedness from any amount payable under
the Policy. As indebtedness is repaid, the Policy's value in the Loan Reserve
securing the indebtedness repaid will be transferred from the Loan Reserve to
the Accounts in the same manner as Net Premiums are allocated. However, Western
Reserve reserves the right to require the transfer to the Fixed Account.
Western Reserve will allocate the repayment of indebtedness at the end of the
Valuation Period during which the repayment is received.

SURRENDER PRIVILEGES

At any time before the earlier of the death of the Surviving Insured or
the Maturity Date, the Policyowner may totally surrender or, after the first
Policy year, make a cash withdrawal from the Policy by sending a written
request to Western Reserve. The amount available for surrender is the Net
Surrender Value at the end of the Valuation Period during which the surrender
request is received at Western Reserve's Office. The Net Surrender Value is
equal to the Cash Value as of the date of Surrender, less any surrender charge,
and less any outstanding Policy loan, plus any unearned loan interest. A
Surrender Charge may apply. (See Charges and Deductions - Contingent Surrender
Charges, p. 27.) Surrenders from the Series Account will generally be paid
within seven days of receipt of the written request. Postponement of payments
may, however, occur in certain circumstances. (See General Provisions -
Postponement of Payments, p. 34.) Additional restrictions may be applied to
surrenders from the Fixed Account. (See The Fixed Account - Allocations,
Transfers and Withdrawals, p. 36.) For the protection of Policyowners, all
requests for cash withdrawals or total surrenders of more than $100,000, or
where the withdrawal or surrender proceeds are to be sent to an address other
than the address of record will require a signature guarantee. All required
guarantees of signatures must be made by a national or state bank, a member
firm of a national stock exchange or any other institution which is an eligible
guarantor institution as defined by rules and regulations of the Commission. If
the Policyowner is a corporation, partnership, trust or fiduciary, evidence of
the authority of the person seeking redemption is required before the request
for withdrawal is accepted, including withdrawals under $100,000. For
additional information, Policyowners may call Western Reserve at
1-800-851-9777. A cash withdrawal or total surrender may have Federal income
tax consequences. (See Federal Tax Matters, p. 37.)

TOTAL SURRENDERS. When the Policy is being totally surrendered, the
Policy itself must be returned to Western Reserve along with the request. A
Policyowner may elect to have the amount paid in a lump sum or under a
settlement option. (See Payment of Policy Benefits - Settlement Options, p.
34.)

CASH WITHDRAWALS. For a cash withdrawal, the amount available may be
limited to no less than $500 and to no more than 10% of the Net Surrender
Value. The amount paid plus a processing fee equal to the lesser of $25 or 2%
of the amount withdrawn will be deducted from the Policy's Cash Value at the
end of the Valuation Period during which the request is received. The amount
will be deducted from the Accounts in the same manner as the current allocation
instructions unless the Policyowner directs otherwise. Cash withdrawals are
allowed only once each Policy year.

Cash withdrawals will affect both the Policy's Cash Value and the death
benefit payable under the Policy. The Policy's Cash Value will be reduced by
the amount of the cash withdrawal. Moreover, the death benefit proceeds payable
under a Policy will generally be reduced by at least the amount of the cash
withdrawal.

In addition, when death benefit Option A is in effect, the Specified
Amount will be reduced by the cash withdrawal. No cash withdrawal will be
permitted which would result in a Specified Amount lower than the minimum
Specified Amount

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set forth in the Policy or would deny the Policy status as life insurance under
the Internal Revenue Code and applicable regulations. (See Cash Value Charges -
Cost of Insurance, p. 28; Death Benefit - Insurance Protection, p. 15; and
Federal Tax Matters - Tax Treatment of Policy Benefits, p. 38.)

EXAMINATION OF POLICY PRIVILEGE ("FREE-LOOK")

The Policyowner may cancel the Policy within 10 days after the
Policyowner receives it, or 10 days after Western Reserve mails or delivers a
written notice of withdrawal right to the Policyowner or within 45 days after
signing the application, whichever is latest. Certain states require a
free-look period longer than 10 days, either for all Policyowners or for
certain classes of Policyowners. In such states, Western Reserve will comply
with the specific requirements of those states. The Policyowner should mail or
deliver the Policy to either Western Reserve or the agent who sold it. If the
Policy is cancelled in a timely fashion, a refund will be made to the
Policyowner. The refund will equal the sum of: (i) the difference between the
premiums paid and the amounts allocated to any Accounts under the Policy; (ii)
the total amount of monthly deductions made and any other charges imposed on
amounts allocated to the Accounts; and (iii) the value of amounts allocated to
the Accounts on the date Western Reserve or its agent receives the returned
Policy. If state law prohibits the calculation above, the refund will equal the
total of all premiums paid for the Policy.

CONVERSION RIGHTS

At any time upon written request within 24 months of the Policy Date, the
Policyowner may elect to transfer all Sub-Account values to the Fixed Account.
No transfer charge will be assessed.

POLICY SPLIT OPTION

Subject to Western Reserve's evidence of insurability requirements, the
Policyowner may request to split the Policy, not including any riders, and
purchase two permanent individual Fixed Account life insurance policies offered
at the time of the request; one on the life of each Joint Insured. The Owner
may request this Split Option by notifying Western Reserve at its Office in
writing within 90 days following either:

1. The later of the enactment or the effective date of a change in the Federal
estate tax laws that would reduce or eliminate the unlimited marital
deduction; or

2. The date of entry of a final decree of divorce with respect to the Joint
Insureds; or

3. Written confirmation of a dissolution of a business partnership of which the
partners are the Joint Insureds.

The conditions listed above do not apply to Policies issued in the state of
Pennsylvania.

If more than one person owns this Policy, each Owner must agree to the
split. The initial specified amount for each new policy cannot be greater than
50% of the Policy's Specified Amount, not including the face amount of any
riders. The new policies will be subject to Western Reserve's minimum and
maximum specified amounts and issue ages for the plan of insurance selected. If
one of the Joint Insureds is older than the new policy's maximum issue age at
the time the Policy Split Option is requested, Western Reserve's approval must
be obtained to exercise the Policy Split Option.

Cash Value and indebtedness under the Policy will be allocated equally to
each of the new policies. If one Joint Insured does not meet Western Reserve's
insurability requirements, Western Reserve will pay the Policyowner one half of
the Policy's Net Surrender Value and issue only the policy covering that Joint
Insured who meets Western Reserve's insurability requirements; or the
Policyowner may elect to keep the Policy In Force on both Joint Insureds and no
new policies will be issued.

The premiums for the new policies will be based on each Joint Insured's
Attained Age and premium rate class as determined by current evidence of
insurability. Premiums will be payable as of the policy dates for each new
policy. The policy date for each new policy will be the Monthiversary following
notification to Western Reserve to execute the Policy Split Option. The owner
and beneficiary for the new policies will be those named in this Policy, unless
otherwise specified. Premium expense charges, if any, under the new policies
will not be deducted from the Cash Value allocated to the new policies. Any new
premium paid to the new policies will be subject to the normal charges, if any,
of the new policies at the time the premium is paid.

BENEFITS AT MATURITY

If either Joint Insured is living and the Policy is In Force, Western
Reserve will pay the Net Surrender Value of the Policy on the Maturity Date.
(See Cash Value - Net Surrender Value, p. 17.) The Policy will mature on the
Anniversary nearest the younger Joint Insured's 100th birthday, if either Joint
Insured is living and the Policy is In Force. Western Reserve is willing to
extend the Maturity Date provided the Policy is still In Force on the Maturity
Date and there are no unfavorable tax consequences. A tax advisor should be
consulted about the tax consequences associated with any Maturity Date
extension. Extension of the Maturity Date will be made upon mutual agreement
between Western Reserve and the Policyowner provided the Policyowner submits a
written request to Western Reserve between 90 and 180 days prior to the
Maturity Date, and provided the Policy may be extended with no unfavorable tax
consequences to the Policyowner.

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PAYMENT OF POLICY BENEFITS

Death benefits under the Policy will ordinarily be paid within seven days
after Western Reserve receives due proof of death of the Surviving Insured, and
Western Reserve receives proof that both Joint Insureds died while the Policy
was In Force, and verifies the validity of the claim. Other benefits will
ordinarily be paid within seven days of receipt of proper written request
(including an election as to tax withholding). Payments may be postponed in
certain circumstances. (See General Provisions - Postponement of Payments, p.
34 and The Fixed Account - Allocations, Transfers and Withdrawals, p. 36.) The
Policyowner may decide the form in which the benefits will be paid. During the
lifetime of either Joint Insured, the Policyowner may arrange for the death
benefits to be paid in a lump sum or under one or more of the settlement
options described below. These choices are also available if the Policy is
surrendered or matures. If no election is made, Western Reserve will pay the
benefits in a lump sum.

When death benefits are payable in a lump sum, the Beneficiary may select
one or more of the settlement options. If death benefits become payable under a
settlement option and the Beneficiary has the right to withdraw the entire
amount, the Beneficiary may name and change contingent Beneficiaries.

SETTLEMENT OPTIONS. Policyowners and Beneficiaries, subject to a prior
election of the Policyowner, may elect to have benefits paid in a lump sum or
in accordance with a variety of settlement options offered under the Policy.
Once a settlement option is in effect, there will no longer be value in the
Series Account or the Fixed Account. Western Reserve may make other settlement
options available on the Fixed Account in the future. The effective date of a
settlement provision will be either the date of surrender or the date of death
of the Surviving Insured. For additional information concerning these options,
see the Policy itself.

OPTION A - PAYMENTS FOR A FIXED PERIOD. The proceeds plus interest will
be paid in equal monthly installments for the period chosen until paid in full.
The period chosen may not exceed 20 years.

OPTION B - LIFE INCOME. The proceeds will be paid in equal installments
for the guaranteed payment period elected and continue for the life of the
person on whose life the option is based. Such installments will be payable:
(a) during the lifetime of the payee or (b) during a fixed period certain and
for the remaining lifetime of the payee or (c) until the sum of installments
paid equals the proceeds applied and for the remaining life of the payee.
Guaranteed payment periods may be elected for 10 years, or the period in which
the total payments will equal the amount retained.

OPTION C - JOINT AND SURVIVOR LIFE INCOME. The proceeds will be paid
during the joint lifetime of two persons and continue upon the death of the
first payee for the remaining lifetime of the survivor.

GENERAL PROVISIONS

POSTPONEMENT OF PAYMENTS

GENERAL. Payment of any amount from the Series Account upon complete
surrender, cash withdrawal, Policy loan, or benefits payable at death or
maturity may be postponed whenever: (i) the New York Stock Exchange is closed
other than customary weekend and holiday closing, or trading on the New York
Stock Exchange is restricted as determined by the Commission; (ii) the
Commission by order permits postponement for the protection of Policyowners; or
(iii) an emergency exists, as determined by the Commission, as a result of
which disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Series Account's net
assets. Transfers may also be postponed under these circumstances. For
restrictions applicable to payments from the Fixed Account, see The Fixed
Account - Allocations, Transfers and Withdrawals, p. 36.

PAYMENT BY CHECK. Payments under the Policy of any amounts derived from
premiums paid by check or bank draft may be delayed until such time as the
check or bank draft has cleared the Policyowner's bank.

THE CONTRACT

The Policy and attached copy of the application and any supplemental
applications are the entire contract. Only statements in the application and
any supplemental applications can be used to void the Policy or defend a claim.
The statements are considered representations and not warranties. No Policy
provision can be waived or changed except by endorsement. Only the President or
Secretary of Western Reserve can agree to change or waive any provisions of the
Policy.

SUICIDE

If either Joint Insured, while sane or insane, commits suicide within two
years from the Policy Date or two years from the effective date of any
reinstatement of a Policy, the Policy will terminate, and Western Reserve's
total liability, including all riders attached to the Policy, will be limited
to the total premiums paid within such two year period, less any loan and any
prior withdrawals during such period. In that event, such proceeds will be
payable to the Policyowner, if surviving, otherwise to the Policyowner's
estate. No other death benefit will be payable.

INCONTESTABILITY

Western Reserve cannot contest the Policy as to the initial Specified
Amount after it has been In Force while both

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Joint Insureds are still alive, for two years from the Policy Date. At the end
of the second Policy year, Western Reserve will send the Policyowner a notice
requesting to know whether either Joint Insured has died. Failure to notify
Western Reserve that a Joint Insured has died will not avoid a contest, if
Western Reserve has a basis to contest, even if the Policy is still In Force.
If a lapsed Policy is reinstated, a new two year contestability period (apart
from any remaining contestability period) will apply from the date of the
application for reinstatement and will apply only to statements made in the
application for reinstatement.

CHANGE OF OWNER OR BENEFICIARY

The Beneficiary, as named in the Policy application or subsequently
changed, will receive the Policy benefits at the Surviving Insured's death. If
the named Beneficiary dies before the Surviving Insured, the contingent
Beneficiary, if named, becomes the Beneficiary. If no Beneficiary survives the
Surviving Insured, the benefits payable at the Surviving Insured's death will
be paid to the Policyowner or the Policyowner's estate. As long as the Policy
is In Force, the Policyowner or Beneficiary may be changed by written request
from the Policyowner in a form acceptable to Western Reserve. The Policy need
not be returned unless requested by Western Reserve. The change will take
effect as of the date the request is signed, regardless of whether either or
both Joint Insureds are living when the request is received by Western Reserve.
Western Reserve will not, however, be liable for any payment made or action
taken before receipt of the request.

ASSIGNMENT

The Policy may be assigned by the Policyowner. Western Reserve will not
be bound by the assignment until a written copy has been received at its Office
and will not be liable with respect to any payment made prior to receipt.
Western Reserve assumes no responsibility for determining whether an assignment
is valid or the extent of the assignee's interest.

MISSTATEMENT OF AGE OR SEX

If the age or sex of either Joint Insured has been misstated, the death
benefit will be adjusted based on what the cost of insurance charge for the
most recent monthly deduction would have purchased based on the correct age and
sex.

REPORTS AND RECORDS

Western Reserve will maintain all records relating to the Series Account
and the Fixed Account. Western Reserve will mail to each Policyowner, at the
last known address of record, reports required by applicable laws and or
regulations.

Western Reserve will send Policyowners written confirmation within seven
days of the following transactions: unplanned and certain planned premium
payments, Cash Value transfers, change in death benefit option or Specified
Amount, total surrender or cash withdrawals, and Policy loans or repayments.
Western Reserve will also send each Policyowner an annual statement at the end
of the Policy year showing for the year, among other things, the month and
amount of each: premium payment made, monthly deduction, transfer, cash
withdrawal and Policy loan or repayment. The annual statement will also show
Policy year-end Net Surrender Value, death benefit and Policy loan value, as
well as other Policy activity during the year.

OPTIONAL INSURANCE BENEFITS

Subject to certain requirements, one or more of the following optional
insurance benefits may be added to a Policy by rider. The cost of any optional
insurance benefits, including any applicable charge to provide a death benefit
guarantee, if any, for the optional insurance benefit until the No Lapse Date,
will be deducted as part of the monthly deduction. (See Charges and Deductions
- - Optional Cash Value Charges, p. 29.)

JOINT INSURED TERM RIDER: Provides the payment of the face amount of
the rider to the Beneficiary for the rider upon receipt of due proof that both
Joint Insureds died while the rider was In Force. The cost of insurance rates
for this rider increase each year. This rider terminates at the younger Joint
Insured's age 95.

INDIVIDUAL INSURED RIDER: Provides additional life insurance on the
life of either Joint Insured, and for the payment of the face amount of the
rider to the Beneficiary for the rider upon receipt by Western Reserve of
written notice that the Insured's death occurred while the rider was In Force.
On any Monthiversary while the rider is In Force, the Policyowner may exchange
the rider without evidence of insurability for a new policy on the Insured's
life. Such new policy will be issued upon written request subject to the
following: (a) the rider has not reached the Anniversary nearest the Insured's
70th birthday; (b) the new policy is on any permanent plan of insurance then
offered by Western Reserve; (c) the amount of insurance upon conversion will
equal the face amount then In Force under the rider; and (d) the payment of the
premium based on the Insured's rate class under the rider. This rider
terminates at the Insured's age 95.

WEALTH PROTECTOR RIDER: Provides the payment of the face amount of the
rider to the Beneficiary for the rider upon receipt of due proof that both
Joint Insureds died while the rider was In Force. The rider has no conversion
or exchange privilege. The rider terminates at the earlier of (a) the date the
Policy terminates, (b) the fourth Anniversary of the Policy, or (c) the
Monthiversary on which the rider is terminated by written notice from the
Policyowner to Western Reserve. The cost of insurance rates for this rider do
not increase while the rider is In Force.

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THE FIXED ACCOUNT

A Policyowner may allocate Net Premiums and transfer Cash Value to the
Fixed Account, which is part of Western Reserve's General Account. Because of
exemptive and exclusionary provisions, interests in the Fixed Account have not
been registered under the Securities Act of 1933, and neither the Fixed Account
nor the General Account has been registered as an investment company under the
1940 Act. Accordingly, neither the Fixed Account, the General Account nor any
interests therein are generally subject to the provisions of these acts and
Western Reserve has been advised that the staff of the Commission has not
reviewed the disclosures in this Prospectus relating to the Fixed Account.
Disclosures regarding the Fixed Account may, however, be subject to certain
generally applicable provisions of the Federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.

The portion of the Cash Value allocated to the Fixed Account (the "Fixed
Account Value") will be credited with rates of interest, as described below.
Because the Fixed Account Value becomes part of Western Reserve's General
Account, Western Reserve assumes the risk of investment gain or loss on this
amount. All assets in the General Account are subject to Western Reserve's
general liabilities from business operations.

FIXED ACCOUNT VALUE

At the end of any Valuation Period, the Fixed Account Value is equal to:

1. The sum of all Net Premium payments allocated to the Fixed Account;
plus
2. Any amounts transferred from a Sub-Account to the Fixed Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as they are due;
minus
5. Any cash withdrawals or surrenders from the Fixed Account; minus
6. Any amounts transferred to a Sub-Account from the Fixed Account.

MINIMUM GUARANTEED AND CURRENT INTEREST RATES

The Fixed Account Value, including the Loan Reserve, is guaranteed to
accumulate at a minimum effective annual interest rate of 4%. Western Reserve
presently credits the Fixed Account Value with current rates in excess of the
minimum guarantee but it is not obligated to do so. Western Reserve has no
specific formula for determining current interest rates. Some of the factors
that Western Reserve may consider, in its sole discretion, in determining
whether to credit interest in excess of the 4% guarantee rate are: general
economic trends, rates of return currently available and anticipated on the
company's investments, regulatory and tax requirements, and competitive
factors. The Fixed Account Value will not share in the investment performance
of the company's general account or any portion thereof. Because Western
Reserve, at its sole discretion, anticipates changing the current interest rate
from time to time, different allocations to and from the Fixed Account Value
will be credited different current interest rates.

Western Reserve further guarantees that when a higher current interest
rate is declared on an allocation to the Fixed Account, that interest rate will
be guaranteed on such allocation for at least a one year period (the "Guarantee
Period"), unless the Cash Value associated with an allocation has been
transferred to the Loan Reserve. Western Reserve reserves the right to apply a
different current interest rate to that part of the Cash Value equal to the
Loan Reserve. At the end of the Guarantee Period, Western Reserve reserves the
right to declare a new current interest rate on such allocation and accrued
interest thereon (which may be a different current interest rate than the
current interest rate on new allocations to the Fixed Account on that date).
The rate declared on such allocation and accrued interest thereon at the end of
each Guarantee Period will be guaranteed again for another Guarantee Period. At
the end of any Guarantee Period, any interest credited on the Policy's Cash
Value in the Fixed Account in excess of the minimum guaranteed rate of 4% per
year will be determined in the sole discretion of Western Reserve. The
Policyowner assumes the risk that interest credited may not exceed the
guaranteed minimum rate.

Allocations from the Fixed Account Value to provide: a) cash withdrawal
amounts, b) transfers to the Series Account, or c) monthly deduction charges
are currently, for the purpose of crediting interest, accounted for on a last
in, first out ("LIFO") method.

Western Reserve reserves the right to change the method of crediting
interest from time to time, provided that such changes will not have the effect
of reducing the guaranteed rate of interest below 4% per annum or shorten the
Guarantee Period to less than one year.

ALLOCATIONS, TRANSFERS AND WITHDRAWALS

Net Premium payments and transfers to the Fixed Account will be allocated
to the Fixed Account on the first Valuation Date on or following the date
Western Reserve receives the payment or transfer request at its Office, except
that any allocation of Net Premium received prior to the Policy Date will take
place on the Policy Date (or the Record Date, if later).

For transfers from the Fixed Account to a Sub-Account, Western Reserve
reserves the right to require that transfer requests be in writing and received
at Western Reserve's Office within 30 days of a Policy Anniversary. Under the

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<PAGE>

Policy, the maximum amount that may be transferred is limited to the greater of
(a) 25% of the amount in the Fixed Account, or (b) the amount transferred in
the prior Policy year from the Fixed Account, unless Western Reserve consents
otherwise. Currently, Western Reserve allows 100% of the amount in the Fixed
Account to be transferred within 30 days after each Anniversary. The transfer
will take place on the day Western Reserve receives the request. No transfer
charge will apply to transfers from the Fixed Account to a Sub-Account. Amounts
may be withdrawn from the Fixed Account for Cash Withdrawals and Surrenders
only upon written request of the Policyowner and are subject to any applicable
requirement for a signature guarantee. (See Policy Rights - Surrender
Privileges, p. 32.) Western Reserve further reserves the right to defer payment
of transfers, Cash Withdrawals, or Surrenders from the Fixed Account for up to
six months. In addition, Policy provisions relating to transfers, Cash
Withdrawals or Surrenders from the Series Account will also apply to Fixed
Account transactions.

DISTRIBUTION OF THE POLICIES

The Policy will be sold by individuals who, in addition to being licensed
as life insurance agents for Western Reserve, are also registered
representatives of ISI, an affiliate of Western Reserve and the principal
underwriter of the Policies, or of broker-dealers who have entered into written
sales agreements with the principal underwriter for promotion and sale of the
Policies. ISI is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. No amounts have been retained by ISI for acting as
principal underwriter for the Policies. The compensation payable to registered
representatives who are appointed agents of Western Reserve for sales of the
Policies may vary with the Sales Agreement, but is not expected to exceed 65%
of all premiums paid during the first Policy year, and 2.20% of all premium
payments in years 2 through 10. An additional sales commission of up to 0.10%
(ten one-hundredths of one percent) of the Policy's Cash Value is payable on
the fifth Policy Anniversary, and on each Anniversary thereafter, provided the
Policy's Cash Value at such times, minus any amounts attributable to Policy
loans, is at least $10,000. In addition, certain production, persistency and
managerial bonuses may also be paid.

FEDERAL TAX MATTERS

INTRODUCTION

The ultimate effect of Federal income taxes on the Cash Value of a Policy
and on the economic benefit to the Policyowner or Beneficiary depends on
Western Reserve's tax status and upon the tax status of the individual
concerned. The discussion contained herein is general in nature and is not
intended as tax advice. For complete information on Federal and state tax
considerations, a qualified tax adviser should be consulted. No attempt is made
to consider any applicable state or other tax laws. Because the discussion
herein is based upon Western Reserve's understanding of Federal income tax laws
as they are currently interpreted, Western Reserve cannot guarantee the tax
status of any Policy. Western Reserve makes no representations regarding the
likelihood of continuation of the current Federal income tax laws, Treasury
Regulations, or of the current interpretations by the Internal Revenue Service
("IRS"). Western Reserve reserves the right to make changes to the Policy in
order to assure that it will continue to qualify as life insurance for tax
purposes.

TAX CHARGES

At the present time, Western Reserve makes no charge for any Federal,
state or local taxes (other than premium taxes) that the Company incurs that
may be attributable to such Account or to the Policies. Western Reserve,
however, reserves the right in the future to make a charge for any such tax or
other economic burden resulting from the application of the tax laws that it
determines to be properly attributable to the Series Account or to the
Policies.

TAX STATUS OF THE POLICY

In order to qualify as a life insurance contract for Federal tax
purposes, a Policy must meet the definition of a life insurance contract which
is set forth in Section 7702 of the Internal Revenue Code of 1986, as amended
(the "Code"). The manner in which Section 7702 should be applied to certain
features of the Policy is not directly addressed by Section 7702. Nevertheless,
Western Reserve believes it is reasonable to conclude that the Policy will meet
the Section 7702 definition of a life insurance contract. In the absence of
final regulations or other pertinent interpretations of Section 7702, however,
there is necessarily some uncertainty as to whether a Policy will meet the
statutory life insurance contract definition, particularly if it insures
substandard risks. If a Policy were determined not to be a life insurance
contract for purposes of Section 7702, such Policy would not provide most of
the tax advantages normally provided by a life insurance contract.

If it is subsequently determined that a Policy does not satisfy Section
7702, Western Reserve will take whatever steps are appropriate and reasonable
to attempt to cause such a Policy to comply with Section 7702, including
possibly refunding any premiums paid that exceed the limitation allowable under
Section 7702 (together with interest or other earnings on any such premiums
refunded as required by law). For these reasons, Western Reserve reserves the
right to modify the Policy as necessary to attempt to qualify it as a life
insurance contract under Section 7702.

Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of

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<PAGE>

the Series Account to be "adequately diversified" in order for the Policy to be
treated as a life insurance contract for Federal tax purposes. The Series
Account, through the Fund, intends to comply with the diversification
requirements prescribed by the Treasury in Reg. sec. 1.817-5, which affect how
the Fund's assets may be invested. Western Reserve believes that the Fund will
be operated in compliance with the requirements prescribed by the Treasury.

In certain circumstances, owners of variable life insurance policies may
be considered the owners, for Federal income tax purposes, of the assets of the
separate account used to support their policies. In those circumstances, income
and gains from the separate account assets would be includible in the owner's
gross income. The IRS has stated in published rulings that the owner of a
variable life insurance policy will be considered the owner of separate account
assets if the owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control of the investment of a
segregated asset account may cause the investor (I.E., the policyowner), rather
than the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular sub-accounts without being treated as owners of the
underlying assets."

The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policyowners were not owners of separate account assets. For
example, the Policyowner has additional flexibility in allocating premium
payments and Policy values. These differences could result in a Policyowner
being treated as the owner of a pro rata portion of the assets of the Series
Account. In addition, Western Reserve does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. Western Reserve therefore reserves the right to
modify the Policy as necessary to attempt to prevent a Policyowner from being
considered the owner of a pro rata share of the assets of the Series Account.

The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.

TAX TREATMENT OF POLICY BENEFITS

1. IN GENERAL. Western Reserve believes that the proceeds and Cash Value
increases of a Policy should be treated in a manner consistent with a
fixed-benefit life insurance policy for Federal income tax purposes. Thus, the
death benefit under the Policy should be excludable from the gross income of
the Beneficiary under Section 101(a)(1) of the Code.

A change in a Policy's Specified Amount, the payment of an unscheduled
premium, the taking of a Policy loan, a cash withdrawal, a total surrender, a
change of insured, a Policy Lapse with an outstanding indebtedness, a change in
death benefit options, the exchange of a Policy, or the assignment of a Policy
may have tax consequences depending upon the circumstances. In addition,
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Policy proceeds depend upon the
circumstances of each Policyowner or Beneficiary. A competent tax adviser
should be consulted for further information.

The Policy may also be used in various arrangements, including
nonqualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if a
Policyowner is contemplating the use of a Policy in any arrangement the value
of which depends in part on its tax consequences, that Policyowner should be
sure to consult a qualified tax adviser regarding the tax attributes of the
particular arrangement.

Generally, the Policyowner will not be deemed to be in constructive
receipt of the Cash Value, including increments thereof, under the Policy until
there is a distribution. The tax consequences of distributions from, and loans
taken from, or secured by, a Policy depend on whether the Policy is classified
as a "modified endowment contract" under Section 7702A. Section 7702A generally
applies to Policies entered into or materially changed after June 20, 1988.

2. MODIFIED ENDOWMENT CONTRACTS. A Policy may be treated as a modified
endowment contract depending upon the amount of premiums paid in relation to
the death benefit provided under such Policy. The premium limitation rules for
determining whether such a Policy is a modified endowment contract are
extremely complex. In general, however, a Policy will be a modified endowment
contract if the accumulated premiums paid at any time during the first seven
Policy years exceed the sum of the net level premiums which would have been
paid on or before such time if the Policy provided for paid-up future benefits
after the payment of seven level annual premiums. In addition, if a Policy is
"materially changed," it may cause such Policy to be treated as a modified
endowment contract. The material change rules for determining whether a Policy
is a modified endowment contract are also extremely complex. In general,
however, the determination whether a Policy will be a modified endowment
contract after a material change depends upon the relationship of the death
benefit at the time of change to the Cash Value at the time of such change and
the additional premiums paid in

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<PAGE>

the seven Policy years starting with the date on which the material change
occurs.

The manner in which the premium limitation and material change rules
should be applied to certain features of the Policy and its riders is unclear.
Nonetheless, under Western Reserve's current procedures, the Policyowner will
be notified at the time a Policy is issued whether, according to Western
Reserve's calculations, the Policy is or is not classified as a modified
endowment contract based on the premium then received. The Policyowner will
also be notified of the amount of the maximum annual premium which, according
to, Western Reserve's calculations, can be paid without causing a Policy to be
classified as a modified endowment contract.

Due to the Policy's flexibility, classification of a Policy as a modified
endowment contract will depend upon the circumstances of each Policy.
Accordingly, a prospective Policyowner should contact a competent tax adviser
before purchasing a Policy to determine the circumstances under which the
Policy would be a modified endowment contract. In addition, a Policyowner
should contact a competent tax adviser before making any change to, including
an exchange of, a Policy to determine whether such change would cause the
Policy (or the new policy in the case of an exchange) to be treated as a
modified endowment contract.

If a Policy becomes a modified endowment contract, distributions that
occur during the Policy year it becomes a modified endowment contract and any
subsequent Policy year will be taxed as distributions from a modified endowment
contract. In addition, distributions from a Policy within two years before it
becomes a modified endowment contract will be taxed in this manner. This means
that a distribution made from a Policy that is not a modified endowment
contract could later become taxable as a distribution from a modified endowment
contract.

3. DISTRIBUTIONS FROM POLICIES CLASSIFIED AS MODIFIED ENDOWMENT
CONTRACTS. Policies classified as modified endowment contracts are subject to
the following tax rules: First, all pre-death distributions from such a Policy
(including distributions upon surrender, distributions made in anticipation of
the Policy becoming a modified endowment contract, and benefits paid at
maturity) are treated as ordinary income subject to tax up to the amount equal
to the excess (if any) of the Cash Value immediately before the distribution
over the investment in the Policy (described below) at such time. Second, loans
taken from, or secured by, such a Policy are treated as distributions from such
a Policy and taxed accordingly. (Unpaid Policy loan interest will be treated as
a loan for these purposes.) Third, a 10% Federal income tax penalty is imposed
on the portion of any distribution from, or loan taken from, or secured by,
such a Policy that is included in income except where the distribution or loan
is made on or after the Policyowner attains age 591/2, is attributable to the
Policyowner's becoming disabled, or is part of a series of substantially equal
periodic payments for the life (or life expectancy) of the Policyowner or the
joint lives (or joint life expectancies) of the Policyowner and the
Policyowner's Beneficiary.

4. DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED ENDOWMENT
CONTRACTS. Distributions from a Policy that is not classified as a modified
endowment contract are generally treated as first recovering the investment in
the Policy (described below) and then, only after the return of all such
investment in the Policy, as distributing taxable income. An exception to this
general rule occurs in the case of a cash withdrawal, a decrease in the
Policy's death benefit, or any other change that reduces benefits under the
Policy in the first 15 years after the Policy is issued and results in a cash
distribution to the Policyowner in order for the Policy to continue complying
with the Section 7702 definitional limits. In that case, such distribution will
be taxed in whole or in part as ordinary income (to the extent of any gain in
the Policy) under rules prescribed in Section 7702.

Loans from, or secured by, a Policy that is not a modified endowment
contract are generally not treated as distributions. Instead, such loans are
treated as indebtedness of the Policyowner. However, the tax treatment of a
loan from a Policy that is not a modified endowment contract is uncertain to
the extent that the interest rate credited is equal to the interest rate
charged on the amount borrowed. A tax advisor should be consulted.

Finally, distributions (including distributions upon surrender or lapse)
or loans from, or secured by, a Policy that is not a modified endowment
contract are not subject to the 10% Federal income tax penalty.

5. POLICY LOAN INTEREST. Interest paid on a Policy loan generally is not
tax deductible. Therefore, a Policyowner should consult a competent tax advisor
before deducting any Policy loan interest.

6. INVESTMENT IN THE POLICY. Investment in the Policy means (i) the
aggregate amount of any premiums or other consideration paid for a Policy,
minus (ii) the aggregate amount received under the Policy which is excluded
from the gross income of the Policyowner (except that the amount of any loan
from, or secured by, a Policy that is a modified endowment contract, to the
extent such amount is excluded from gross income, will be disregarded), plus
(iii) the amount of any loan from, or secured by, a Policy that is a modified
endowment contract to the extent that such amount is included in the gross
income of the Policyowner.

7. MULTIPLE POLICIES. All modified endowment contracts that are issued by
Western Reserve (or its affiliates) to the same Policyowner during any calendar
year are treated as

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<PAGE>

one modified endowment contract for purposes of determining the amount
includable in gross income under Section 72(e) of the Code.

8. TAX TREATMENT OF POLICY SPLIT. The Policy Split Option permits a
Policy to be split into two other individual life insurance contracts upon the
occurrence of a divorce of the Joint Insureds, certain changes in Federal
estate tax law, or a dissolution of a business partnership of which the
partners are Joint Insureds. (See Policy Rights - Policy Split Option, p. 33.)
A policy split could have adverse tax consequences. For example, it is not
clear whether a policy split will be treated as a nontaxable exchange under
Sections 1031 through 1043 of the Code. If a policy split is not treated as a
nontaxable exchange, a split could result in the recognition of taxable income
in an amount up to any gain in the Policy at the time of the split. In
addition, it is not clear whether the individual policies that result from a
policy split would in all circumstances be treated as life insurance contracts
for Federal income tax purposes and, if so treated, whether the individual
policies would be classified as modified endowment contracts. Before a
Policyowner exercises rights provided by the Policy Split Option, it is
important that he or she consult with a competent tax adviser regarding the
possible consequences of a policy split.

9. TERMINAL ILLNESS ACCELERATED DEATH BENEFIT RIDER. Pursuant to the
recently enacted Health Insurance Portability and Accountability Act of 1996,
Western Reserve believes that for Federal income tax purposes a Single Sum
Benefit payment made under the Terminal Illness Accelerated Death Benefit Rider
should be fully excludable from the gross income of the beneficiary, as long as
the beneficiary is the Insured under the Policy. However, a Policyowner should
consult a qualified tax advisor about the consequences of adding this Rider to
a Policy or requesting a Single Sum Benefit payment under this Rider.

10. OTHER TAX CONSIDERATIONS. The transfer of the Policy or the
definition of a beneficiary may have Federal, state and/or local transfer and
inheritance tax consequences, including the imposition of gift, estate and
generation-skipping transfer taxes. For example, the transfer of the Policy to,
the designation as beneficiary of, or the payment of proceeds to, a person who
is assigned to a generation which is two or more generations below the
generation assignment of the Policyowner, may have generation skipping transfer
tax considerations under Section 2601 of the Code.

11. BUSINESS-OWNED LIFE INSURANCE. In recent years, Congress has adopted
new rules relating to life insurance owned by businesses. Any business
contemplating the purchase of a new Policy or a change in an existing Policy
should consult a tax advisor.

The individual situation of each Policyowner or beneficiary will
determine the extent, if any, to which Federal, state and local transfer taxes
may be imposed. Consult with your tax adviser for specific information in
connection with these taxes.

POSSIBLE TAX LAW CHANGES

Although the likelihood of legislative changes is uncertain, there is
always the possibility that the tax treatment of the Policy could change by
legislation or otherwise. For instance, the President's 1999 Budget Proposal
recommended legislation that, if enacted, would adversely modify the Federal
taxation of this Policy. It is possible that any legislative change could be
retroactive (that is, effective prior to the date of the change.) A tax advisor
should be consulted with respect to legislative developments and their effect
on the Policy.

EMPLOYMENT-RELATED BENEFIT PLANS

On July 6, 1983, the Supreme Court held in ARIZONA GOVERNING COMMITTEE V.
NORRIS that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women on the basis of sex. The Policy described in this
Prospectus contains guaranteed cost of insurance rates and guaranteed purchase
rates for certain payment options that distinguish between men and women.
Accordingly, employers and employee organizations should consider, in
consultation with legal counsel, the impact of NORRIS, and Title VII generally,
on any employment-related insurance or benefit program for which a Policy may
be purchased.

SAFEKEEPING OF THE
SERIES ACCOUNT'S ASSETS

Western Reserve holds the assets of the Series Account. The assets are
kept physically segregated and held separate and apart from the General
Account. Western Reserve maintains records of all purchases and redemptions of
Fund shares by each of the Sub-Accounts. Additional protection for the assets
of the Series Account is provided by a blanket bond issued to AEGON U.S.
Holding Corporation ("AEGON U.S.") in the amount of $5 million (subject to a $1
million deductible), covering all of the employees of AEGON U.S. and its
affiliates, including Western Reserve. A Stockbrokers Blanket Bond, issued to
AEGON U.S.A. Securities, Inc. provides additional fidelity coverage to a limit
of $12 million.

VOTING RIGHTS OF THE SERIES ACCOUNT

To the extent required by law, Western Reserve will vote the Fund shares
held in the Series Account at shareholder meetings of the Fund in accordance
with instructions received from persons having voting interests in the
corresponding Sub-Accounts of the Series Account. Except as required by the
1940 Act, the Fund does not hold regular or special shareholder meetings. If
the 1940 Act or any regulation thereunder should be amended or if the present
interpretation thereof

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<PAGE>

should change, and as a result Western Reserve determines that it is permitted
to vote the Fund shares in its own right, it may elect to do so.

The number of votes which a Policyowner has the right to instruct will be
calculated separately for each Sub-Account. The number of votes which each
Policyowner has the right to instruct will be determined by dividing a Policy's
Cash Value in that Sub-Account by $100. Fractional shares will be counted. The
number of votes of the Portfolio which the Policyowner has the right to
instruct will be determined as of the date coincident with the date established
by that Portfolio for determining shareholders eligible to vote at the meeting
of the Fund. Voting instructions will be solicited by written communications
prior to such meeting in accordance with procedures established by the Fund.

Western Reserve will vote Fund shares as to which no timely instructions
are received and Fund shares which are not attributable to Policyowners in
proportion to the voting instructions which are received with respect to all
Policies participating in that Portfolio. Voting instructions to abstain on any
item to be voted upon will reduce the votes eligible to be cast by Western
Reserve.

Each person having a voting interest in a Sub-Account will receive proxy
materials, reports and other materials relating to the appropriate Portfolio.

DISREGARD OF VOTING INSTRUCTIONS. Western Reserve may, when required by
state insurance regulatory authorities, disregard voting instructions if the
instructions require that the shares be voted so as to cause a change in the
sub-classification or investment objective of the Fund or one or more of its
Portfolios or to approve or disapprove an investment advisory contract for a
Portfolio of the Fund. In addition, Western Reserve itself may disregard voting
instructions in favor of changes initiated by a Policyowner in the investment
policy or the investment adviser of a Portfolio of the Fund if Western Reserve
reasonably disapproves of such changes. A change would be disapproved only if
the proposed change is contrary to state law or prohibited by state regulatory
authorities or Western Reserve determined that the change would have an adverse
effect on its General Account in that the proposed investment policy for a
Portfolio may result in overly speculative or unsound investments. In the event
Western Reserve does disregard voting instructions, a summary of that action
and the reasons for such action will be included in the next annual report to
Policyowners.

STATE REGULATION OF WESTERN RESERVE

As a life insurance company organized and operated under Ohio law,
Western Reserve is subject to provisions governing such companies and to
regulation by the Ohio Commissioner of Insurance.

Western Reserve's books and Accounts are subject to review and
examination by the Ohio Insurance Department at all times and a full
examination of its operations is conducted by the National Association of
Insurance Commissioners at least once every three years.

REINSURANCE

Western Reserve intends to reinsure a portion of the risks assumed under
the Policies.

EXECUTIVE OFFICERS AND DIRECTORS
OF WESTERN RESERVE

JOHN R. KENNEY(1), CHAIRMAN OF THE BOARD OF DIRECTORS, CHIEF EXECUTIVE OFFICER
AND PRESIDENT. Chairman of the Board of Directors (1987 - present) and
Chief Executive Officer (1982 - present), President, (1978 - 1987 and
December, 1992 - present), Director (1978 - present), Western Reserve Life
Assurance Co. of Ohio; Chairman of the Board of Directors (1985 -
present), President (March, 1993 - present), WRL Series Fund, Inc.;
Chairman of the Board of Directors (September, 1996 - present), WRL
Investment Management, Inc.; Chairman of the Board of Directors
(September, 1996 - present), WRL Investment Services, Inc.; Chairman of
the Board of Directors (February, 1997 - present), AEGON Asset Management
Services, Inc., Largo, Florida; Chairman of the Board of Directors and
Chief Executive Officer (1988 - February, 1991), President (1988 - 1989),
Director (1976 - February, 1991), Executive Vice President (1972 - 1988),
Pioneer Western Corporation (financial services), Largo, Florida;
President and Director (1985 - September, 1990) and Director (December,
1990 - present) Idex Management, Inc. (investment adviser), Largo,
Florida; Trustee (1987 - present), Chairman (December, 1989 - September,
1990 and November, 1990 - present) and President and Chief Executive
Officer (November, 1986 - September, 1990), of IDEX Series Fund; former
President and Chief Executive Officer of IDEX Fund, IDEX II Series Fund
and IDEX Fund 3 (investment companies), all of Largo, Florida.

ALAN M. YAEGER(1), EXECUTIVE VICE PRESIDENT, ACTUARY AND CHIEF FINANCIAL
OFFICER. Executive Vice President (June, 1993 - present), Chief Financial
Officer (December, 1995 - present), Senior Vice President (1981 - June,
1993) and Actuary (1972 - present), Western Reserve Life Assurance Co. of
Ohio; Director (September, 1996 - present), WRL Investment Management,
Inc.; Director (September, 1996 - present), WRL Investment Services, Inc.;
Executive Vice President (September, 1993 - present), WRL Series Fund,
Inc.

WILLIAM H. GEIGER(1), SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL.
Senior Vice President, Secretary and General Counsel (July, 1990 -
present), Western Reserve Life Assurance Co. of Ohio; Vice President,
Secretary and General Counsel of Pioneer Western

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<PAGE>

Corporation (financial services) and Secretary of its subsidiaries (May,
1990 - February, 1991); Vice President and Assistant Secretary (November,
1990 - present) and Secretary (June, 1990 - September, 1990) of IDEX
Series Fund; former Secretary of IDEX Fund, IDEX II Series Fund and IDEX
Fund 3 (investment companies), all of Largo, Florida.

G. JOHN HURLEY(1), EXECUTIVE VICE PRESIDENT. Executive Vice President (June,
1993 - present), Western Reserve Life Assurance Co. of Ohio; Executive
Vice President (June, 1993 - present), Director (March, 1994 - present)
WRL Series Fund, Inc.; Director (September, 1996 - present), WRL
Investment Management, Inc.; Director (September, 1996 - present), WRL
Investment Services, Inc.; Director, President and Chief Executive Officer
(February, 1997 - present), AEGON Asset Management Services, Inc., Largo,
Florida; President and Chief Executive Officer (September, 1990 -
present), Trustee (June, 1990 - present) and Executive Vice President
(June, 1988 - September, 1990) of IDEX Series Fund; former Trustee and
Executive Vice President of IDEX Fund, IDEX II Series Fund and IDEX Fund 3
(investment companies); Assistant Vice President of AEGON USA Managed
Portfolios, Inc. (September, 1991 - August, 1992); Vice President of
Pioneer Western Corporation (May, 1988 - February, 1991).

ALLAN J. HAMILTON(1), VICE PRESIDENT, TREASURER AND CONTROLLER. Vice President
and Controller (1987 - present), Treasurer (February, 1997 - present),
Assistant Vice President and Assistant Controller (1983 - 1987), Western
Reserve Life Assurance Co. of Ohio; Treasurer and Principal Financial
Officer (February, 1997 - present), WRL Series Fund, Inc.; Vice President
and Controller (1988 - February, 1991), Pioneer Western Corporation
(financial services), Largo, Florida.

PATRICK S. BAIRD, DIRECTOR, 4333 Edgewood Road, NE, Cedar Rapids, Iowa 52499,
Director (February, 1991 - present), Western Reserve Life Assurance Co. of
Ohio; Vice President and Chief Tax Officer (1984 - present), Chief
Financial Officer (1992 - present), AEGON USA, Inc., formerly known as
Life Investors, Inc., (financial services holding company), Cedar Rapids,
Iowa.

JACK E. ZIMMERMAN, DIRECTOR, 507 St. Michel Circle, Kettering, Ohio 45429,
Director (1987 - present), Western Reserve Life Assurance Co. of Ohio;
Trustee, of IDEX Series Fund; former Trustee of IDEX Fund, IDEX II Series
Fund and IDEX Fund 3 (investment companies); Director, Regional Marketing,
(1986 - January, 1993), Martin Marietta Corporation, Dayton, Ohio.

LYMAN H. TREADWAY, DIRECTOR, 30195 Chagrin Blvd. Ste. 210N, Cleveland, Ohio
44124, Director (September, 1994 - present), Western Reserve Life
Assurance Co. of Ohio; Consultant (1988 - 1993), Cleveland, Ohio.

JAMES R. WALKER, DIRECTOR, 3320 Office Park Dr., Dayton, Ohio 45439, Director
(June, 1996 - present) Western Reserve Life Assurance Co. of Ohio;
Self-employed, Public Accountant (1996 - present); Partner, C.P.A. (1990 -
1995), Walker-Davis, C.P.A.'s, Dayton, Ohio.

- ------------------------------
(1) The principal business address is Western Reserve Life Assurance Co. of
Ohio, P.O. Box 5068, Clearwater, Florida 33758-5068.

LEGAL MATTERS

Sutherland, Asbill & Brennan LLP, Washington, D.C., has provided advice
on certain legal matters concerning Federal securities laws in connection with
the Policies. All matters of Ohio law pertaining to the Policy, including the
validity of the Policy and Western Reserve's right to issue the Policy under
Ohio Insurance Law, have been passed upon by Thomas E. Pierpan, Vice President,
Assistant Secretary and Associate General Counsel of Western Reserve.

LEGAL PROCEEDINGS

Western Reserve, like other life insurance companies, is involved in
lawsuits. Western Reserve is not aware of any class action lawsuits naming it
as a Defendant or involving the Series Account. In some lawsuits involving
other insurers, substantial damages have been sought and/or material settlement
payments have been made. Although the outcome of any litigation cannot be
predicted with certainty, Western Reserve believes that at the present time
there are no pending or threatened lawsuits that are reasonably likely to have
a material adverse impact on the Series Account or Western Reserve.

EXPERTS

The financial statements and schedules of WRL Series Life Account as of
December 31, 1997 and for the year then ended have been included herein in
reliance upon the report of Price Waterhouse LLP, independent accountants, and
upon the authority of that firm as experts in accounting and auditing.

The financial statements of Western Reserve Life Assurance Co. of Ohio at
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997, appearing in this Prospectus have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon appearing
elsewhere herein which are based in part on the report of Price Waterhouse LLP,
independent accountants. The financial statements referred to above are

42
<PAGE>

included in reliance upon such reports given upon the authority of such firms
as experts in accounting and auditing.

Actuarial matters included in this Prospectus and Registration Statement
have been examined by Alan Yaeger as stated in the opinion filed as an exhibit
to the registration statement.

YEAR 2000 MATTERS

In October 1996, Western Reserve adopted and presently has in place a
Year 2000 Assessment and Planning Project (the "Plan") to review and analyze
existing hardware and software systems, as well as voice and data
communications systems, to determine if they are Year 2000 compatible. Western
Reserve has also engaged the services of a third-party provider that is
specialized in Year 2000 issues to work on the Plan.

As of the date of this Prospectus, Western Reserve has identified and
made available what it believes are the appropriate resources of hardware,
people, and dollars, including the engagement of outside third parties, to
ensure that the Plan will be completed.

The Year 2000 computer problem, and its resolution, is complex and
multifaceted, and success of a response plan cannot be conclusively known until
the Year 2000 is reached (or an earlier date to the extent that the systems or
equipment addresses Year 2000 data prior to the Year 2000). Even with the
appropriate and diligent pursuit of a well-conceived response plan, including
testing procedures, there is no certainty that any company will achieve
complete success. Further, notwithstanding its efforts or results, Western
Reserve's ability to function unaffected to and through the Year 2000 may be
adversely affected by actions (or failure to act) of third parties beyond
knowledge or control. See the Fund's prospectus for information on the Fund's
preparation for Year 2000.

ADDITIONAL INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning the Series Account, Western Reserve and the Policy
offered hereby. Statements contained in this Prospectus as to the contents of
the Policy and other legal instruments are summaries. For a complete statement
of the terms thereof reference is made to such instruments as filed.

INFORMATION ABOUT WESTERN RESERVE'S FINANCIAL STATEMENTS

The financial statements of Western Reserve which are included in this
Prospectus (see p. 70) should be considered only as bearing on the ability of
Western Reserve to meet its obligations under the Policies. They should not be
considered as bearing on the investment performance of the assets held in the
Series Account.

Financial statements for Western Reserve for the years ended December 31,
1997, 1996 and 1995, have been prepared on the basis of statutory accounting
principles, rather than generally accepted accounting principles ("GAAP").

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<PAGE>

APPENDIX A

ILLUSTRATION OF BENEFITS

The tables in Appendix A illustrate the way in which a Policy operates.
They show how the death benefit, Cash Value and Net Surrender Value of a Policy
issued to Joint Insureds of given ages and a given premium could vary over an
extended period of time assuming hypothetical gross rates of return equivalent
to constant after tax annual rates of 0%, 6% and 12%. The tables illustrate the
Policy values that would result based on the assumptions that the premium is
paid as indicated, that the Policyowner has not requested a decrease in the
Specified Amount of the Policy, that no cash withdrawals or Policy loans have
been made, and that less than twelve transfers per year have been made.

The death benefits, Cash Values and Net Surrender Values under a Policy
would be different from those shown if the actual rate of return averages 0%,
6% or 12% over a period of years, but fluctuated above and below those averages
for individual Policy years. They would also differ if any Policy loans were
made during the period of time illustrated.

The illustration on p. 45 is based on a Policy for Joint Insureds who are
a 55 year old male and a 55 year old female, both in the Select rate class,
annual premiums of $4,000, a $250,000 Specified Amount and death benefit Option
A. The illustrations on that page also assume cost of insurance charges based
on Western Reserve's CURRENT cost of insurance rates.

The illustration on p. 46 is based on the same factors as those on p. 45,
except that cost of insurance charges are based on the GUARANTEED cost of
insurance rates (based on the 1980 Commissioners Standard Ordinary Mortality
Table).

The amounts shown for the death benefits, Cash Values and Net Surrender
Values take into account (1) the daily charge for assuming mortality and
expense risks assessed against each Sub-Account which is equivalent to an
annual charge of 0.90% of the average net assets of the Sub-Accounts; (2)
estimated daily expenses equivalent to an effective average annual expense
level of 0.95% of the average daily net assets of the Portfolios of the Fund;
and (3) all applicable premium expense charges and Cash Value charges. The
0.95% average Portfolio expense level assumes an equal allocation of amounts
among the fifteen Sub-Accounts and is based on an average 0.76% investment
advisory fee and estimated 1997 average normal operating expenses of 0.19% for
each of the Portfolios in operation during 1997. Calculation of the average
annual expense level utilized annualized actual audited expenses incurred
during 1997 for the Money Market (0.48%), Bond (0.64%), Growth (0.87%),
Strategic Total Return (0.88%), Global (1.00%), Emerging Growth (0.93%),
Aggressive Growth (0.96%), Balanced (0.94%), Growth & Income (0.96%), C.A.S.E.
Growth (1.00%), Tactical Asset Allocation (0.87%), Value Equity (0.89%),
International Equity (1.50%) and U.S. Equity (1.30%). In addition, because the
Third Avenue Value Portfolio had not commenced operations as of December 31,
1997, the estimated average annual Portfolio expense level reflects estimated
expenses for this Portfolio at 1.00% for 1998. During 1997, WRL Management had
undertaken to pay Fund expenses for each Portfolio to the extent normal
operating expenses of a Portfolio exceeded a stated percentage of the
Portfolio's average daily net assets. WRL Management has undertaken until April
30, 1999 to pay expenses to the extent normal operating expenses of a Portfolio
exceed a stated percentage of the Portfolio's average daily net assets. Taking
into account the assumed charges of 1.85%, the gross annual investment return
rates of 0%, 6% and 12% are equivalent to net annual investment return rates of
- -1.85%, 4.15%, and 10.15%.

The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the Series Account because Western Reserve is not
currently making such charges. In order to produce after tax returns of 0%, 6%
or 12% if such charges are made in the future, the Series Account would have to
earn a sufficient amount in excess of 0%, 6% or 12% to cover any tax charges.
(See Charges Against the Series Account - Taxes, p. 30.)

The "Premium Accumulated at 5%" column of each table shows the amount
which would accumulate if an amount equal to the premium were invested to earn
interest at 5% per year, compounded annually.

Western Reserve will furnish, upon request, a comparable illustration
reflecting each proposed Joint Insured's age, sex, risk classification and
desired plan features.

44
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
MALE AND FEMALE BOTH ISSUE AGE 55
$4,000 ANNUAL PREMIUM FOR NON-SMOKER SELECT RATE CLASS
$250,000 SPECIFIED AMOUNT

OPTION A - LEVEL DEATH BENEFIT

THIS ILLUSTRATION IS BASED ON CURRENT COST OF INSURANCE RATES.

<TABLE>
<CAPTION>
PREMIUMS NET
ACCUMULATED DEATH BENEFIT SURRENDER VALUE CASH VALUE
END OF AT 5% ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
POLICY INTEREST GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
YEAR PER YEAR RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF
- -------- ------------- -------------------------------- -------------------------------- --------------------------------
0% 6% 12% 0% 6% 12% 0% 6% 12%
--------- --------- ------------ -------- ---------- ------------ -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 250,000 250,000 1,191 1,410 1,629 3,501 3,720 3,939
2 8,610 250,000 250,000 250,000 4,258 4,915 5,599 6,910 7,567 8,251
3 13,241 250,000 250,000 250,000 7,404 8,721 10,146 10,224 11,541 12,966
4 18,103 250,000 250,000 250,000 10,452 12,654 15,133 13,439 15,641 18,120
5 23,208 250,000 250,000 250,000 13,395 16,711 20,598 16,550 19,867 23,753
6 28,568 250,000 250,000 250,000 16,234 20,898 26,589 19,558 24,221 29,912
7 34,196 250,000 250,000 250,000 18,963 25,212 33,154 22,455 28,703 36,645
8 40,106 250,000 250,000 250,000 21,574 29,649 40,343 25,233 33,308 44,002
9 46,312 250,000 250,000 250,000 24,054 34,201 48,210 27,881 38,029 52,038
10 52,827 250,000 250,000 250,000 26,389 38,860 56,816 30,385 42,856 60,811
15 90,630 250,000 250,000 250,000 42,384 70,658 121,079 42,384 70,658 121,079
20 138,877 250,000 250,000 250,000 51,918 103,816 219,549 51,918 103,816 219,549
25 200,454 250,000 250,000 400,088 57,258 142,946 381,036 57,258 142,946 381,036
30 279,043 250,000 250,000 673,095 54,556 189,261 641,042 54,556 189,261 641,042
35 379,345 250,000 260,933 1,109,994 37,741 248,507 1,057,137 37,741 248,507 1,057,137
40 507,359 * 327,208 1,744,782 * 323,968 1,727,507 * 323,968 1,727,507
45 670,741 * 418,741 2,827,106 * 418,741 2,827,106 * 418,741 2,827,106

<CAPTION>
INTERNAL RATE OF
INTERNAL RATE OF RETURN ON NET INTERNAL RATE OF
RETURN ON CASH SURRENDER VALUE RETURN ON
VALUE ASSUMING ASSUMING DEATH BENEFIT
END OF HYPOTHETICAL HYPOTHETICAL ASSUMING HYPOTHETICAL
POLICY GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
YEAR RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF
- -------- ------------------------ -------------------------- -------------------------------
0% 6% 12% 0% 6% 12% 0% 6% 12%
-------- ------- ------- -------- -------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 -12.47 -7.00 -1.53 -70.23 -64.75 -59.27 6,150.00 6,150.00 6,150.00
2 -9.38 -3.65 2.08 -35.35 -28.40 -21.56 642.15 642.15 642.15
3 -7.80 -1.94 3.92 -22.27 -15.13 -8.16 258.47 258.47 258.47
4 -6.86 -0.91 5.04 -16.32 -9.17 -2.22 148.92 148.92 148.92
5 -6.25 -0.22 5.79 -13.08 -5.93 0.98 100.39 100.39 100.39
6 -5.82 0.26 6.33 -11.08 -3.94 2.93 73.77 73.77 73.77
7 -5.52 0.62 6.73 -9.76 -2.62 4.23 57.22 57.22 57.22
8 -5.31 0.89 7.05 -8.84 -1.70 5.13 46.06 46.06 46.06
9 -5.16 1.09 7.29 -8.19 -1.03 5.79 38.07 38.07 38.07
10 -5.07 1.25 7.49 -7.73 -0.53 6.29 32.11 32.11 32.11
15 -4.49 2.02 8.36 -4.49 2.02 8.36 16.46 16.46 16.46
20 -4.33 2.42 8.87 -4.33 2.42 8.87 9.93 9.93 9.93
25 -4.62 2.65 9.20 -4.62 2.65 9.20 6.48 6.48 9.51
30 -5.74 2.80 9.39 -5.74 2.80 9.39 4.39 4.39 9.63
35 -9.30 2.99 9.49 -9.30 2.99 9.49 3.02 3.23 9.70
40 * 3.18 9.57 * 3.18 9.57 * 3.22 9.61
45 * 3.34 9.65 * 3.34 9.65 * 3.34 9.65
</TABLE>

* In the absence of an additional payment, the Policy would lapse.

The Hypothetical Investment Rates of Return Shown Above and Elsewhere in this
Prospectus Are Illustrative Only and Should Not Be Deemed A Representation of
Past or Future Investment Rates of Return.

Actual Investment Rates of Return May be More or Less Than Those Shown And Will
Depend on a Number of Factors, Including the Investment Allocations By An Owner
and Different Investment Rates of Return For the Fund. The Death Benefit, Cash
Value and Net Surrender Value for a Policy Would be Different From Those Shown
if the Actual Investment Rates of Return Averaged 0%, 6%, and 12% Over a Period
of Years, But Fluctuated Above or Below that Average for Individual Policy
Years. No Representation Can Be Made by Western Reserve or the Fund that These
Hypothetical Investment Rates of Return Can Be Achieved For Any One Year or
Sustained Over Any Period of Time. This Illustration Must Be Preceded or
Accompanied By A Current Prospectus.

45
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
MALE AND FEMALE BOTH ISSUE AGE 55
$4,000 ANNUAL PREMIUM FOR NON-SMOKER SELECT RATE CLASS
$250,000 SPECIFIED AMOUNT
OPTION A - LEVEL DEATH BENEFIT
THIS ILLUSTRATION IS BASED ON GUARANTEED COST OF INSURANCE RATES.

<TABLE>
<CAPTION>
PREMIUMS NET
ACCUMULATED DEATH BENEFIT SURRENDER VALUE CASH VALUE
END OF AT 5% ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
POLICY INTEREST GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
YEAR PER YEAR RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF
- -------- ------------- -------------------------------- -------------------------------- --------------------------------
0% 6% 12% 0% 6% 12% 0% 6% 12%
--------- --------- ------------ -------- ---------- ------------ -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 250,000 250,000 1,191 1,410 1,629 3,501 3,720 3,939
2 8,610 250,000 250,000 250,000 4,258 4,915 5,599 6,910 7,567 8,251
3 13,241 250,000 250,000 250,000 7,404 8,721 10,146 10,224 11,541 12,966
4 18,103 250,000 250,000 250,000 10,452 12,654 15,133 13,439 15,641 18,120
5 23,208 250,000 250,000 250,000 13,395 16,711 20,598 16,550 19,867 23,753
6 28,568 250,000 250,000 250,000 16,228 20,891 26,582 19,551 24,215 29,906
7 34,196 250,000 250,000 250,000 18,942 25,190 33,131 22,433 28,681 36,623
8 40,106 250,000 250,000 250,000 21,525 29,598 40,291 25,185 33,257 43,950
9 46,312 250,000 250,000 250,000 23,962 34,105 48,110 27,789 37,932 51,938
10 52,827 250,000 250,000 250,000 26,232 38,694 56,643 30,227 42,689 60,638
15 90,630 250,000 250,000 250,000 40,392 68,608 119,128 40,392 68,608 119,128
20 138,877 250,000 250,000 250,000 41,430 93,459 212,017 41,430 93,459 212,017
25 200,454 250,000 250,000 384,530 21,137 109,679 366,219 21,137 109,679 366,219
30 279,043 * 250,000 639,306 * 101,176 608,863 * 101,176 608,863
35 379,345 * 250,000 1,028,128 * 5,481 979,169 * 5,481 979,169
40 507,359 * * 1,578,852 * * 1,563,220 * * 1,563,220
45 670,741 * * 2,560,711 * * 2,560,711 * * 2,560,711

<CAPTION>
INTERNAL RATE OF
INTERNAL RATE OF RETURN ON NET INTERNAL RATE OF
RETURN ON CASH SURRENDER VALUE RETURN ON
VALUE ASSUMING ASSUMING DEATH BENEFIT
END OF HYPOTHETICAL HYPOTHETICAL ASSUMING HYPOTHETICAL
POLICY GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
YEAR RATE OF RETURN OF RATE OF RETURN OF RATE OF RETURN OF
- -------- ------------------------- -------------------------- -------------------------------
0% 6% 12% 0% 6% 12% 0% 6% 12%
-------- -------- ------- -------- -------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 -12.47 -7.00 -1.53 -70.23 -64.75 -59.27 6,150.00 6,150.00 6,150.00
2 -9.38 -3.65 2.08 -35.35 -28.40 -21.56 642.15 642.15 642.15
3 -7.80 -1.94 3.92 -22.27 -15.13 -8.16 258.47 258.47 258.47
4 -6.86 -0.91 5.04 -16.32 -9.17 -2.22 148.92 148.92 148.92
5 -6.25 -0.22 5.79 -13.08 -5.93 0.98 100.39 100.39 100.39
6 -5.83 0.25 6.32 -11.09 -3.95 2.93 73.77 73.77 73.77
7 -5.54 0.60 6.72 -9.79 -2.64 4.21 57.22 57.22 57.22
8 -5.35 0.86 7.02 -8.98 -1.74 5.10 46.06 46.06 46.06
9 -5.23 1.04 7.26 -8.27 -1.08 5.75 38.07 38.07 38.07
10 -5.17 1.18 7.44 -7.84 -0.60 6.24 32.11 32.11 32.11
15 -5.13 1.66 8.18 -5.13 1.66 8.18 16.46 16.46 16.46
20 -6.80 1.46 8.58 -6.80 1.46 8.58 9.93 9.93 9.93
25 -15.73 0.70 8.95 -15.73 0.70 8.95 6.48 6.48 9.26
30 * -1.13 9.12 * -1.13 9.12 * 4.39 9.37
35 * -42.19 9.17 * -42.19 9.17 * 3.02 9.38
40 * * 9.21 * * 9.21 * * 9.25
45 * * 9.34 * * 9.34 * * 9.34
</TABLE>

* In the absence of an additional payment, the Policy would lapse.

The Hypothetical Investment Rates of Return Shown Above and Elsewhere in this
Prospectus Are Illustrative Only and Should Not Be Deemed A Representation of
Past or Future Investment Rates of Return.

46
<PAGE>

APPENDIX B

WEALTH INDICES OF INVESTMENTS
IN THE U.S. CAPITAL MARKETS

The information below graphically depicts the growth of $1.00 invested in
large company stocks, small company stocks, long-term government bonds,
Treasury bills, and a hypothetical asset returning the inflation rate over the
period from the end of 1925 to the end of 1997. All results assume reinvestment
of dividends on stocks or coupons on bonds and no taxes. Transaction costs are
not included, except in the small stock index starting in 1982.

Each of the cumulative index values is initialized at $1.00 at year-end
1925. The graph illustrates that large company stocks and small company stocks
have the best performance over the entire 72-year period: investments of $1.00
in these assets would have grown to $1,828.33 and $5,519.97, respectively, by
year-end 1997. This higher growth was earned by investments involving
substantial risk. In contrast, long-term government bonds (with an approximate
20-year maturity), which exposed the holder to much less risk, grew to only
$39.07.

The lowest-risk strategy over the past 72 years (for those with
short-term time horizons) was to buy U.S. Treasury bills. Since Treasury bills
tended to track inflation, the resulting real (inflation-adjusted) returns were
near zero for the entire 1926 - 1997 period.

[GRAPHIC OMITTED]

* Source: (c) STOCKS, BONDS, BILLS AND INFLATION 1998 YEARBOOK/trademark/,
Ibbotson Associates, Chicago (annually updates work by Roger G. Ibbotson and
Rex A. Sinquefield). Used with permission. All rights reserved.

<PAGE>

--------------------------------------
COMPOUND ANNUAL RATES OF RETURN BY DECADE

<TABLE>
<CAPTION>
1920s* 1930s 1940s 1950s 1960s 1970s 1980s 1990s** 1988-97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Large Company ............ 19.2% -0.1% 9.2% 19.4% 7.8% 5.9% 17.5% 16.6% 18.0%
Small Company ............ -4.5 1.4 2.07 16.9 15.5 11.5 15.8 16.5 16.5
Long-Term Corp. .......... 5.2 6.9 2.7 1.0 1.7 6.2 13.0 10.2 10.8
Long-Term Govt. .......... 5.0 4.9 3.2 -0.1 1.4 5.5 12.6 10.7 11.3
Inter-Term Govt. ......... 4.2 4.6 1.8 1.3 3.5 7.0 11.9 8.0 8.3
Treasury Bills ........... 3.7 0.6 0.4 1.9 3.9 6.3 8.9 5.0 5.4
Inflation ................ -1.1 -2.0 5.4 2.2 2.5 7.4 5.1 3.1 3.4
</TABLE>

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

* Based on the period 1926-1929.

** Based on the period 1990-1997.

Source: (c) STOCKS, BONDS, BILLS AND INFLATION 1998 YEARBOOK/trademark/,
Ibbotson Associates, Inc., Chicago (annually updates work by Roger G. Ibbotson
and Rex A. Sinquefield). Used with permission. All rights reserved.

THE WRL FREEDOM WEALTH PROTECTOR/registered trademark/
AND THE "DOLLAR COST AVERAGING" INVESTMENT STRATEGY

As the Long Term Market Trends graph indicates, the investment
performance of many common stocks has generally been positive over certain
relatively long periods. Common stocks have, however, also been subject to
market declines, often dramatic ones, and general volatility of prices over
shorter time periods. The price fluctuations of common stocks has historically
been greater than that of high grade debt securities.

The relative volatility of common stock prices as compared with prices of
high grade debt instruments offers both advantages and disadvantages to
investors. Unfortunately, many investors who otherwise might be interested in
common stocks see only the disadvantages and not the advantages of stock price
fluctuation. The primary disadvantage, of course, is that price declines can be
prolonged and substantial, and when this occurs, investors cannot liquidate
their investments without realizing losses. Price declines, however, also offer
investors important opportunities.

Opportunity arises from the fact that investors can purchase more common
stock for the same amount of money than they would before prices declined.
Investors may take advantage of this if they remain willing to continue
investing in both rising and falling markets. The dollar cost averaging
strategy of investing demonstrates this.

In this strategy of investing:

/bullet/ Relatively constant dollar amounts are invested at regular
intervals (monthly, quarterly, or annually),

/bullet/ Stock Market fluctuations, especially the savings on purchases
from price declines, are exploited for the investor's benefit.

HOW DOLLAR COST AVERAGING WORKS

<TABLE>
<CAPTION>
Investments at Common Stock Shares
Regular Intervals Market Price Purchased
- ------------------- -------------- ----------
<S> <C> <C>
$150 $20 7.5
150 15 10.0
150 10 15.0
150 5 30.0
150 10 15.0
150 15 10.0
----------- ----
$900 87.5
</TABLE>

<TABLE>
<S> <C>
Total Value of 87.5 shares @ $15/share $1,312.50
Less Investment made (900.00)
---------
Gain/Profit $ 412.50
</TABLE>

Though the market price has not returned to the initial high of $20 per
share, dollar cost averaging has permitted the investor to purchase more shares
at a savings and thus realize a significant gain. Obviously, the dollar cost
averaging strategy is for the investor who can continue to invest relatively
constant amounts over a long period of time.

This plan of investing does not assure a profit or protect against a loss
in declining markets; it does allow investors to take advantage of market
fluctuations. Since the success of this strategy is dependent on systematic
investing, purchasers should consider their ability to sustain their payments
through all periods of market fluctuations.

How does the dollar cost averaging method relate to the WRL Freedom
Wealth Protector/registered trademark/? A Policyowner may invest his or her Net
Premium in a Sub-Account, and although a Policy's value in a Sub-Account or
Sub-Accounts is affected by several factors other than investment experience
(E.G., Cash Value charges and charges against the Series Account), the dollar
cost averaging method can be generally applied to the Policy to the extent that
the Policyowner pays a Planned

48
<PAGE>

Periodic Premium on a regular basis and he or she allocates Net Premium
resulting from those Planned Periodic Premiums to the Sub-Accounts in
relatively constant amounts.

INDEX TO FINANCIAL STATEMENTS

WRL Series Life Account:

Report of Independent Accountants dated January 30, 1998

Statements of assets, liabilities and equity accounts and statements of
operations for the year ended December 31, 1997

Statements of changes in equity accounts for the years ended December 31,
1997 and 1996

Selected per unit data and ratios for the years ended December 31, 1997,
1996, 1995, 1994 and 1993

Notes to Financial Statements

Western Reserve Life Assurance Co. of Ohio:

Report of Independent Auditors dated February 27, 1998

Statutory-basis balance sheets at December 31, 1997 and 1996

Statutory-basis statements of operations for the years ended December 31,
1997, 1996 and 1995

Statutory-basis statements of changes in capital and surplus for the
years ended December 31, 1997, 1996 and 1995

Statutory-basis statements of cash flows for the years ended December 31,
1997, 1996 and 1995

Notes to Statutory-basis financial statements

Statutory-basis financial statement schedules

WRL00053-01/98

49
<PAGE>

WRL SERIES LIFE ACCOUNT

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Western Reserve Life Assurance Co. of Ohio and
Policy Owners of the WRL Series Life Account

In our opinion, the accompanying statements of assets, liabilities and
equity accounts and the related statements of operations and of changes in
equity accounts and the selected per unit data and ratios present fairly, in
all material respects, the financial position of each of the Sub-Accounts
constituting the WRL Series Life Account (a separate account of Western Reserve
Life Assurance Co. of Ohio, hereafter referred to as the "Life Account") at
December 31, 1997, the results of each of their operations, the changes in each
of their equity accounts and the selected per unit data and ratios for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and selected per unit data and ratios
(hereafter referred to as "financial statements") are the responsibility of the
Life Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

[GRAPHIC OMITTED]

PRICE WATERHOUSE LLP
Kansas City, Missouri
January 30, 1998

50
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENTS OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands

<TABLE>
<CAPTION>
Money Market Bond Growth
Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 16,381,111 1,581,226 12,215,272
================= =============== =================
Cost .................................. $ 16,381 $ 17,287 $ 359,253
================= =============== =================
Investments at net asset value ......... $ 16,381 $ 17,618 $ 450,062
Accrued transfers from depositor ....... 59 39 209
----------------- --------------- -----------------
Total assets .......................... 16,440 17,657 450,271
----------------- --------------- -----------------
LIABILITIES: ............................. 0 0 0
----------------- --------------- -----------------
Net assets ............................ $ 16,440 $ 17,657 $ 450,271
================= =============== =================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ................................. 1,019,515.089795 835,870.193630 7,972,011.504966
================= =============== =================
Unit value ............................ $ 16.125159 $ 21.123535 $ 56.481417
================= =============== =================
Policy Owners' equity ................. $ 16,440 $ 17,657 $ 450,271
----------------- --------------- -----------------
Depositor's equity:
Units ................................. N/A N/A N/A
================= =============== =================
Unit value ............................ $ N/A $ N/A $ N/A
================= =============== =================
Depositor's equity .................... $ N/A $ N/A $ N/A
----------------- --------------- -----------------
Total equity .......................... $ 16,440 $ 17,657 $ 450,271
================= =============== =================
</TABLE>

<TABLE>
<CAPTION>
Strategic
Global Total Return Emerging Growth Aggressive Growth
Sub-Account Sub-Account (a) Sub-Account Sub-Account
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares ................................ 7,604,927 5,163,177 8,082,693 5,890,842
================= ================= ================= =================
Cost .................................. $ 135,839 $ 66,903 $ 133,448 $ 85,485
================= ================= ================= =================
Investments at net asset value ......... $ 144,823 $ 80,673 $ 164,625 $ 94,517
Accrued transfers from depositor ....... 194 80 77 135
----------------- ----------------- ----------------- -----------------
Total assets .......................... 145,017 80,753 164,702 94,652
----------------- ----------------- ----------------- -----------------
LIABILITIES: ............................. 0 0 0 0
----------------- ----------------- ----------------- -----------------
Net assets ............................ $ 145,017 $ 80,753 $ 164,702 $ 94,652
================= ================= ================= =================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ................................. 8,144,902.999720 4,270,324.925754 7,013,376.822852 5,230,271.098013
================= ================= ================= =================
Unit value ............................ $ 17.804656 $ 18.910375 $ 23.484030 $ 18.096966
================= ================= ================= =================
Policy Owners' equity ................. $ 145,017 $ 80,753 $ 164,702 $ 94,652
----------------- ----------------- ----------------- -----------------
Depositor's equity:
Units ................................. N/A N/A N/A N/A
================= ================= ================= =================
Unit value ............................ $ N/A $ N/A $ N/A $ N/A
================= ================= ================= =================
Depositor's equity .................... $ N/A $ N/A $ N/A $ N/A
----------------- ----------------- ----------------- -----------------
Total equity .......................... $ 145,017 $ 80,753 $ 164,702 $ 94,652
================= ================= ================= =================
</TABLE>

51
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENTS OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
At December 31, 1997
All amounts (except unit value, units and shares) in thousands

<TABLE>
<CAPTION>
Growth & Tactical Asset
Balanced Income Allocation
Sub-Account Sub-Account (b) Sub-Account
<S> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 891,005 718,410 2,124,794
=============== =============== =================
Cost .................................... $ 10,023 $ 8,540 $ 26,436
=============== =============== =================
Investments at net asset value ........... $ 10,700 $ 9,022 $ 28,925
Accrued transfers from depositor ......... 16 41 198
--------------- --------------- -----------------
Total assets ............................ 10,716 9,063 29,123
--------------- --------------- -----------------
LIABILITIES: ............................... 0 0 0
--------------- --------------- -----------------
Net assets .............................. $ 10,716 $ 9,063 $ 29,123
=============== =============== =================
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ................................... 756,353.665747 563,129.649597 1,867,261.033017
=============== =============== =================
Unit value .............................. $ 14.168361 $ 16.093919 $ 15.596453
=============== =============== =================
Policy Owners' equity ................... $ 10,716 $ 9,063 $ 29,123
--------------- --------------- -----------------
Depositor's equity:
Units ................................... N/A N/A N/A
=============== =============== =================
Unit value .............................. $ N/A $ N/A $ N/A
=============== =============== =================
Depositor's equity ...................... $ N/A $ N/A $ N/A
--------------- --------------- -----------------
Total equity ............................ $ 10,716 $ 9,063 $ 29,123
=============== =============== =================
</TABLE>

<TABLE>
<CAPTION>
C.A.S.E. Growth Value Equity International Equity U.S. Equity
Sub-Account Sub-Account Sub-Account (c) Sub-Account (c)
<S> <C> <C> <C> <C>
ASSETS:
Investments
Investment in WRL Series Fund, Inc.:
Shares .................................. 851,094 1,916,676 213,262 265,402
=============== ================= =============== ===============
Cost .................................... $ 12,159 $ 23,473 $ 2,386 $ 3,232
=============== ================= =============== ===============
Investments at net asset value ........... $ 11,924 $ 26,651 $ 2,283 $ 3,247
Accrued transfers from depositor ......... 22 63 6 11
--------------- ----------------- --------------- ---------------
Total assets ............................. 11,946 26,714 2,289 3,258
--------------- ----------------- --------------- ---------------
LIABILITIES: ............................... 0 0 0 0
--------------- ----------------- --------------- ---------------
Net assets .............................. $ 11,946 $ 26,714 $ 2,289 $ 3,258
=============== ================= =============== ===============
EQUITY ACCOUNTS:
Policy Owners' equity:
Units ................................... 969,379.081066 1,915,887.724063 214,889.042226 258,812.833059
=============== ================= =============== ===============
Unit value .............................. $ 12.322854 $ 13.943236 $ 10.654082 $ 12.588589
=============== ================= =============== ===============
Policy Owners' equity ................... $ 11,946 $ 26,714 $ 2,289 $ 3,258
--------------- ----------------- --------------- ---------------
Depositor's equity:
Units ................................... N/A N/A N/A N/A
=============== ================= =============== ===============
Unit value .............................. $ N/A $ N/A $ N/A $ N/A
=============== ================= =============== ===============
Depositor's equity ...................... $ N/A $ N/A $ N/A $ N/A
--------------- ----------------- --------------- ---------------
Total equity ............................ $ 11,946 $ 26,714 $ 2,289 $ 3,258
=============== ================= =============== ===============
</TABLE>

(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) The inception date of this sub-account was January 2, 1997.

52
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENT OF OPERATIONS
For the year ended December 31, 1997
All amounts in thousands

<TABLE>
<CAPTION>
Money Market Bond Growth
Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ............................................................. $ 772 $ 778 $ 3,046
Capital gain distributions .................................................. 0 0 44,809
----- ------- --------
772 778 47,855
EXPENSES:
Mortality and expense risk .................................................. 133 117 3,649
----- ------- --------
Net investment income (loss) ............................................... 639 661 44,206
----- ------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ...................... 0 (191) 5,459
Change in unrealized appreciation (depreciation) ........................... 0 609 9,779
----- ------- --------
Net gain (loss) on investments ............................................ 0 418 15,238
----- ------- --------
Net increase (decrease) in equity accounts resulting from operations ..... $ 639 $ 1,079 $ 59,444
===== ======= ========
</TABLE>

<TABLE>
<CAPTION>
Global
Sub-Account
<S> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 8,033
Capital gain distributions ............................................. 8,885
--------
16,918
EXPENSES:
Mortality and expense risk ............................................. 1,059
--------
Net investment income (loss) .......................................... 15,859
--------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 910
Change in unrealized appreciation (depreciation) ...................... (105)
--------
Net gain (loss) on investments ....................................... 805
--------
Net increase (decrease) in equity accounts resulting from operations $ 16,664
========

<CAPTION>
Strategic Emerging Aggressive
Total Return Growth Growth
Sub-Account (a) Sub-Account Sub-Account
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 1,894 $ 0 $ 2,430
Capital gain distributions ............................................. 4,821 15,057 6,045
-------- -------- --------
6,715 15,057 8,475
EXPENSES:
Mortality and expense risk ............................................. 614 1,216 680
-------- -------- --------
Net investment income (loss) .......................................... 6,101 13,841 7,795
-------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 484 2,278 1,053
Change in unrealized appreciation (depreciation) ...................... 6,037 8,654 5,471
-------- -------- --------
Net gain (loss) on investments ....................................... 6,521 10,932 6,524
-------- -------- --------
Net increase (decrease) in equity accounts resulting from operations $ 12,622 $ 24,773 $ 14,319
======== ======== ========
</TABLE>

53
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENT OF OPERATIONS
For the year ended December 31, 1997
All amounts in thousands

<TABLE>
<CAPTION>
Growth & Tactical Asset
Balanced Income Allocation
Sub-Account Sub-Account (b) Sub-Account
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 548 $ 670 $ 1,051
Capital gain distributions ............................................. 521 603 1,072
------- ------- -------
1,069 1,273 2,123
EXPENSES:
Mortality and expense risk ............................................. 77 59 210
------- ------- -------
Net investment income (loss) .......................................... 992 1,214 1,913
------- ------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 114 137 339
Change in unrealized appreciation (depreciation) ...................... 112 146 1,023
------- ------- -------
Net gain (loss) on investments ....................................... 226 283 1,362
------- ------- -------
Net increase (decrease) in equity accounts resulting from operations $ 1,218 $ 1,497 $ 3,275
======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
C.A.S.E. Growth Value Equity
Sub-Account Sub-Account
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 979 $ 292
Capital gain distributions ............................................. 85 46
------- -------
1,064 338
EXPENSES:
Mortality and expense risk ............................................. 70 155
------- -------
Net investment income (loss) .......................................... 994 183
------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 205 393
Change in unrealized appreciation (depreciation) ...................... (457) 2,645
------- -------
Net gain (loss) on investments ....................................... (252) 3,038
------- -------
Net increase (decrease) in equity accounts resulting from operations $ 742 $ 3,221
======= =======

<CAPTION>
International U.S.
Equity Equity
Sub-Account (c) Sub-Account (c)
<S> <C> <C>
INVESTMENT INCOME:
Dividend income ........................................................ $ 10 $ 108
Capital gain distributions ............................................. 0 11
------- -----
10 119
EXPENSES:
Mortality and expense risk ............................................. 14 12
------- -----
Net investment income (loss) .......................................... (4) 107
-------- -----
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions ................. 134 81
Change in unrealized appreciation (depreciation) ...................... (103) 15
------- -----
Net gain (loss) on investments ....................................... 31 96
------- -----
Net increase (decrease) in equity accounts resulting from operations $ 27 $ 203
======= =====
</TABLE>

(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) The inception date of this sub-account was January 2, 1997.

54
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands

<TABLE>
<CAPTION>
Money Market Bond
Sub-Account Sub-Account
December 31 December 31
----------------------- ------------------------
1997 1996 1997 1996
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 639 $ 491 $ 661 $ 553
Net gain (loss) on investments ........................... 0 0 418 (614)
-------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 639 491 1,079 (61)
-------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 7,719 5,217 7,506 3,452
-------- -------- -------- --------
Less cost of units redeemed:
Administrative charges .................................. 3,108 2,639 1,633 1,314
Policy loans ............................................ 687 286 428 191
Surrender benefits ...................................... 854 776 437 339
Death benefits .......................................... 9 26 15 28
-------- -------- -------- --------
4,658 3,727 2,513 1,872
-------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 3,061 1,490 4,993 1,580
-------- -------- -------- --------
Net increase (decrease) in equity accounts .............. 3,700 1,981 6,072 1,519
Depositor's equity contribution (net redemption) ......... 0 0 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 12,740 10,759 11,585 10,066
-------- -------- -------- --------
End of period ............................................ $ 16,440 $ 12,740 $ 17,657 $ 11,585
======== ======== ======== ========

<CAPTION>
Growth
Sub-Account
December 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 44,206 $ 19,310
Net gain (loss) on investments ........................... 15,238 26,919
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 59,444 46,229
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 106,236 91,556
--------- ---------
Less cost of units redeemed:
Administrative charges .................................. 37,231 29,331
Policy loans ............................................ 11,212 8,443
Surrender benefits ...................................... 15,746 12,386
Death benefits .......................................... 711 601
--------- ---------
64,900 50,761
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 41,336 40,795
--------- ---------
Net increase (decrease) in equity accounts .............. 100,780 87,024
Depositor's equity contribution (net redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 349,491 262,467
--------- ---------
End of period ............................................ $ 450,271 $ 349,491
========= =========
</TABLE>

<TABLE>
<CAPTION>
Strategic
Global Total Return
Sub-Account Sub-Account (a)
December 31 December 31
--------------------------- -------------------------
1997 1996 1997 1996
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 15,859 $ 6,524 $ 6,101 $ 2,646
Net gain (loss) on investments ........................... 805 6,374 6,521 3,636
--------- -------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 16,664 12,898 12,622 6,282
--------- -------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 64,272 43,697 22,072 16,832
--------- -------- -------- --------
Less cost of units redeemed:
Administrative charges .................................. 12,590 6,463 6,025 4,528
Policy loans ............................................ 2,948 1,466 1,624 921
Surrender benefits ...................................... 3,391 2,226 2,044 1,301
Death benefits .......................................... 149 62 148 112
--------- -------- -------- --------
19,078 10,217 9,841 6,862
--------- -------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 45,194 33,480 12,231 9,970
--------- -------- -------- --------
Net increase (decrease) in equity accounts .............. 61,858 46,378 24,853 16,252
Depositor's equity contribution (net redemption) ......... 0 (268) 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 83,159 37,049 55,900 39,648
--------- -------- -------- --------
End of period ............................................ $ 145,017 $ 83,159 $ 80,753 $ 55,900
========= ======== ======== ========
</TABLE>

55
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands

<TABLE>
<CAPTION>
Emerging Growth
Sub-Account
December 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 13,841 $ 3,935
Net gain (loss) on investments ........................... 10,932 9,284
--------- ---------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 24,773 13,219
--------- ---------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 54,392 40,944
--------- ---------
Less cost of units redeemed:
Administrative charges .................................. 14,518 9,201
Policy loans ............................................ 3,692 2,096
Surrender benefits ...................................... 3,986 2,754
Death benefits .......................................... 192 92
--------- ---------
22,388 14,143
--------- ---------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 32,004 26,801
--------- ---------
Net increase (decrease) in equity accounts .............. 56,777 40,020
Depositor's equity contribution (net redemption) ......... 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 107,925 67,905
--------- ---------
End of period ............................................ $ 164,702 $ 107,925
========= =========

<CAPTION>
Aggressive Growth Balanced
Sub-Account Sub-Account
December 31 December 31
----------------------- -----------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 7,795 $ 1,139 $ 992 $ 154
Net gain (loss) on investments ........................... 6,524 2,797 226 341
-------- -------- -------- -------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 14,319 3,936 1,218 495
-------- -------- -------- -------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 40,282 26,224 4,373 3,090
-------- -------- -------- -------
Less cost of units redeemed:
Administrative charges .................................. 9,888 6,413 958 575
Policy loans ............................................ 1,926 863 179 78
Surrender benefits ...................................... 2,485 1,350 153 85
Death benefits .......................................... 58 30 3 4
-------- -------- -------- -------
14,357 8,656 1,293 742
-------- -------- -------- -------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 25,925 17,568 3,080 2,348
-------- -------- -------- -------
Net increase (decrease) in equity accounts .............. 40,244 21,504 4,298 2,843
Depositor's equity contribution (net redemption) ......... 0 0 0 (220)
EQUITY ACCOUNTS:
Beginning of period ...................................... 54,408 32,904 6,418 3,795
-------- -------- -------- -------
End of period ............................................ $ 94,652 $ 54,408 $ 10,716 $ 6,418
======== ======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
Growth & Tactical Asset
Income Allocation
Sub-Account (b) Sub-Account
December 31 December 31
--------------------- -----------------------
1997 1996 1997 1996
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 1,214 $ 246 $ 1,913 $ 584
Net gain (loss) on investments ........................... 283 210 1,362 1,179
------- ------- -------- --------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 1,497 456 3,275 1,763
------- ------- -------- --------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 3,232 3,245 11,386 9,062
------- ------- -------- --------
Less cost of units redeemed:
Administrative charges .................................. 733 440 2,219 1,135
Policy loans ............................................ 163 73 463 306
Surrender benefits ...................................... 260 82 742 866
Death benefits .......................................... 11 3 60 18
------- ------- -------- --------
1,167 598 3,484 2,325
------- ------- -------- --------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 2,065 2,647 7,902 6,737
------- ------- -------- --------
Net increase (decrease) in equity accounts .............. 3,562 3,103 11,177 8,500
Depositor's equity contribution (net redemption) ......... 0 (233) 0 0
EQUITY ACCOUNTS:
Beginning of period ...................................... 5,501 2,631 17,946 9,446
------- ------- -------- --------
End of period ............................................ $ 9,063 $ 5,501 $ 29,123 $ 17,946
======= ======= ======== ========

<CAPTION>
C.A.S.E. Growth
Sub-Account
December 31
-----------------------
1997 1996
------------ ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 994 $ 70
Net gain (loss) on investments ........................... (252) 228
-------- -------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 742 298
-------- -------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 8,029 4,302
-------- -------
Less cost of units redeemed:
Administrative charges .................................. 970 140
Policy loans ............................................ 146 7
Surrender benefits ...................................... 144 12
Death benefits .......................................... 6 0
-------- -------
1,266 159
-------- -------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 6,763 4,143
-------- -------
Net increase (decrease) in equity accounts .............. 7,505 4,441
Depositor's equity contribution (net redemption) ......... (25) 25
EQUITY ACCOUNTS:
Beginning of period ...................................... 4,466 0
-------- -------
End of period ............................................ $ 11,946 $ 4,466
======== =======
</TABLE>

56
<PAGE>

WRL SERIES LIFE ACCOUNT
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
For the year ended
All amounts in thousands

<TABLE>
<CAPTION>
Value Equity
Sub-Account
December 31
------------------------
1997 1996 (c)
------------ ---------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ 183 $ 19
Net gain (loss) on investments ........................... 3,038 603
-------- -------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 3,221 622
-------- -------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 17,023 8,292
-------- -------
Less cost of units redeemed:
Administrative charges .................................. 1,257 153
Policy loans ............................................ 542 36
Surrender benefits ...................................... 388 38
Death benefits .......................................... 0 0
-------- -------
2,187 227
-------- -------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 14,836 8,065
-------- -------
Net increase (decrease) in equity accounts .............. 18,057 8,687
Depositor's equity contribution (net redemption) ......... (230) 200
EQUITY ACCOUNTS:
Beginning of period ...................................... 8,887 0
-------- -------
End of period ............................................ $ 26,714 $ 8,887
======== =======
</TABLE>

<TABLE>
<CAPTION>
International U.S.
Equity Equity
Sub-Account Sub-Account
December 31 December 31
1997 (d) 1997 (d)
--------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ............................. $ (4) $ 107
Net gain (loss) on investments ........................... 31 96
------- -------
Net increase (decrease) in equity accounts resulting
from operations ......................................... 27 203
------- -------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 2,458 3,208
------- -------
Less cost of units redeemed:
Administrative charges .................................. 117 91
Policy loans ............................................ 59 56
Surrender benefits ...................................... 14 9
Death benefits .......................................... 0 0
------- -------
190 156
------- -------
Increase (decrease) in equity accounts from capital
unit transactions ...................................... 2,268 3,052
------- -------
Net increase (decrease) in equity accounts .............. 2,295 3,255
Depositor's equity contribution (net redemption) ......... (6) 3
EQUITY ACCOUNTS:
Beginning of period ...................................... 0 0
------- -------
End of period ............................................ $ 2,289 $ 3,258
======= =======
</TABLE>

(a) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(b) Prior to May 1, 1997, this sub-account was known as Utility.
(c) The inception date of this sub-account was May 1, 1996.
(d) The inception date of this sub-account was January 2, 1997.

57
<PAGE>

WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED

<TABLE>
<CAPTION>
Money Market Sub-Account
December 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.45 $ 14.83
Income from operations:
Net investment income (loss) ....................................... 0.68 0.62
Net realized and unrealized gain (loss) on investments ............. 0.00 0.00
-------- --------
Total income (loss) from operations ............................... 0.68 0.62
-------- --------
Accumulation unit value, end of period ............................... $ 16.13 $ 15.45
======== ========
Total return (a) ..................................................... 4.37% 4.17%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 16,440 $ 12,740
Ratios of net investment income (loss) to average net assets (b) .... 4.28% 4.07%

<CAPTION>
Money Market Sub-Account
December 31
------------------------------------
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 14.19 $ 13.84 $ 13.63
Income from operations:
Net investment income (loss) ....................................... 0.64 0.35 0.21
Net realized and unrealized gain (loss) on investments ............. 0.00 0.00 0.00
-------- ------- -------
Total income (loss) from operations ............................... 0.64 0.35 0.21
-------- ------- -------
Accumulation unit value, end of period ............................... $ 14.83 $ 14.19 $ 13.84
======== ======= =======
Total return (a) ..................................................... 4.49% 2.58% 1.52%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 10,759 $ 9,706 $ 4,985
Ratios of net investment income (loss) to average net assets (b) .... 4.37% 2.66% 1.51%
</TABLE>

<TABLE>
<CAPTION>
Bond Sub-Account
December 31
-------------------------
1997 1996
------------ ------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 19.53 $ 19.67
Income from operations:
Net investment income (loss) ....................................... 1.01 0.99
Net realized and unrealized gain (loss) on investments ............. 0.58 (1.13)
-------- -------
Total income (loss) from operations ............................... 1.59 (0.14)
-------- -------
Accumulation unit value, end of period ............................... $ 21.12 $ 19.53
======== =======
Total return (a) ..................................................... 8.18% (0.75%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 17,657 $ 11,585
Ratios of net investment income (loss) to average net assets (b) .... 5.06% 5.34%

<CAPTION>
Bond Sub-Account
December 31
----------------------------------
1995 1994 1993
----------- ------------ ---------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 16.14 $ 17.50 $ 15.57
Income from operations:
Net investment income (loss) ....................................... 1.05 0.89 2.11
Net realized and unrealized gain (loss) on investments ............. 2.48 (2.25) (0.18)
------- -------- -------
Total income (loss) from operations ............................... 3.53 (1.36) 1.93
------- -------- -------
Accumulation unit value, end of period ............................... $ 19.67 $ 16.14 $ 17.50
======= ======== =======
Total return (a) ..................................................... 21.89% (7.77%) 12.40%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $10,066 $ 6,259 $ 6,985
Ratios of net investment income (loss) to average net assets (b) .... 5.80% 5.57% 12.92%
</TABLE>

<TABLE>
<CAPTION>
Growth Sub-Account
December 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 48.48 $ 41.47
Income from operations:
Net investment income (loss) ....................................... 5.83 2.88
Net realized and unrealized gain (loss) on investments ............. 2.17 4.13
--------- ---------
Total income (loss) from operations ............................... 8.00 7.01
--------- ---------
Accumulation unit value, end of period ............................... $ 56.48 $ 48.48
========= =========
Total return (a) ..................................................... 16.50% 16.91%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 450,271 $ 349,491
Ratios of net investment income (loss) to average net assets (b) .... 10.84% 6.41%

<CAPTION>
Growth Sub-Account
December 31
------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 28.44 $ 31.30 $ 30.37
Income from operations:
Net investment income (loss) ....................................... 3.89 0.04 0.46
Net realized and unrealized gain (loss) on investments ............. 9.14 (2.90) 0.47
--------- -------- ---------
Total income (loss) from operations ............................... 13.03 (2.86) 0.93
--------- -------- ---------
Accumulation unit value, end of period ............................... $ 41.47 $ 28.44 $ 31.30
========= ======== =========
Total return (a) ..................................................... 45.81% (9.13%) 3.06%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 262,467 $ 161,490 $ 169,757
Ratios of net investment income (loss) to average net assets (b) .... 11.05% 0.16% 1.56%
</TABLE>

58
<PAGE>

WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED

<TABLE>
<CAPTION>
Global Sub-Account
December 31
--------------------------------------------------
1997 1996 1995 1994 (d)
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.13 $ 11.95 $ 9.80 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 2.30 1.50 0.45 0.71
Net realized and unrealized gain (loss) on investments ............. 0.37 1.68 1.70 (0.91)
--------- ------- ------- -------
Total income (loss) from operations ............................... 2.67 3.18 2.15 (0.20)
--------- ------- ------- -------
Accumulation unit value, end of period ............................... $ 17.80 $ 15.13 $ 11.95 $ 9.80
========= ======= ======= =======
Total return (a) ..................................................... 17.69% 26.60% 21.96% (2.02%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 145,017 $83,159 $37,049 $ 21,672
Ratios of net investment income (loss) to average net assets (b) .... 13.39% 11.09% 4.25% 8.86%
</TABLE>

<TABLE>
<CAPTION>
Strategic Total Return
Sub-Account (h)
December 31
-----------------------
1997 1996
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 15.66 $ 13.74
Income from operations:
Net investment income (loss) ....................................... 1.56 0.82
Net realized and unrealized gain (loss) on investments ............. 1.69 1.10
------- -------
Total income (loss) from operations ............................... 3.25 1.92
------- -------
Accumulation unit value, end of period ............................... $ 18.91 $ 15.66
======= =======
Total return (a) ..................................................... 20.77% 13.97%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $80,753 $55,900
Ratios of net investment income (loss) to average net assets (b) .... 8.89% 5.76%

<CAPTION>
Strategic Total Return Sub-Account (h)
December 31
------------------------------------
1995 1994 1993 (c)
----------- ------------ -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.12 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.68 0.18 0.19
Net realized and unrealized gain (loss) on investments ............. 1.94 (0.34) 1.09
------- ------- -------
Total income (loss) from operations ............................... 2.62 (0.16) 1.28
------- ------- -------
Accumulation unit value, end of period ............................... $ 13.74 $ 11.12 $ 11.28
======= ======= =======
Total return (a) ..................................................... 23.55% (1.42%) 12.81%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $39,648 $23,649 $13,343
Ratios of net investment income (loss) to average net assets (b) .... 5.47% 1.93% 2.27%
</TABLE>

<TABLE>
<CAPTION>
Emerging Growth Sub-Account
December 31
---------------------------
1997 1996
------------- -------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 19.51 $ 16.56
Income from operations:
Net investment income (loss) ....................................... 2.20 0.82
Net realized and unrealized gain (loss) on investments ............. 1.77 2.13
--------- ---------
Total income (loss) from operations ............................... 3.97 2.95
--------- ---------
Accumulation unit value, end of period ............................... $ 23.48 $ 19.51
========= =========
Total return (a) ..................................................... 20.37% 17.82%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 164,702 $ 107,925
Ratios of net investment income (loss) to average net assets (b) .... 10.18% 4.51%

<CAPTION>
Emerging Growth Sub-Account
December 31
------------------------------------
1995 1994 1993 (c)
----------- ------------ -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.38 $ 12.40 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.65 (0.09) (0.09)
Net realized and unrealized gain (loss) on investments ............. 4.53 (0.93) 2.49
------- ------- -------
Total income (loss) from operations ............................... 5.18 (1.02) 2.40
------- ------- -------
Accumulation unit value, end of period ............................... $ 16.56 $ 11.38 $ 12.40
======= ======= =======
Total return (a) ..................................................... 45.49% (8.18%) 23.96%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $67,905 $36,687 $18,620
Ratios of net investment income (loss) to average net assets (b) .... 4.66% (0.86%) (0.92%)
</TABLE>

59
<PAGE>

WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED

<TABLE>
<CAPTION>
Aggressive Growth Sub-Account
December 31
------------------------------------------------------
1997 1996 1995 1994 (d)
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 14.70 $ 13.43 $ 9.82 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.75 0.36 0.37 (0.06)
Net realized and unrealized gain (loss) on investments ............. 1.65 0.91 3.24 (0.12)
------- ------- ------- -------
Total income (loss) from operations ............................... 3.40 1.27 3.61 (0.18)
------- ------- ------- -------
Accumulation unit value, end of period ............................... $ 18.10 $ 14.70 $ 13.43 $ 9.82
======= ======= ======= =======
Total return (a) ..................................................... 23.14% 9.46% 36.79% (1.85%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $94,652 $54,408 $32,904 $ 8,909
Ratios of net investment income (loss) to average net assets (b) .... 10.26% 2.65% 2.93% (0.72%)
</TABLE>

<TABLE>
<CAPTION>
Balanced Sub-Account
December 31
------------------------------------------------------
1997 1996 1995 1994 (d)
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 12.21 $ 11.13 $ 9.37 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.55 0.36 0.37 0.22
Net realized and unrealized gain (loss) on investments ............. 0.41 0.72 1.39 (0.85)
------- ------- -------- -------
Total income (loss) from operations ............................... 1.96 1.08 1.76 (0.63)
------- ------- -------- -------
Accumulation unit value, end of period ............................... $ 14.17 $ 12.21 $ 11.13 $ 9.37
======= ======= ======== =======
Total return (a) ..................................................... 16.06% 9.73% 18.73% (6.29%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $10,716 $ 6,418 $ 3,795 $ 2,145
Ratios of net investment income (loss) to average net assets (b) .... 11.62% 3.18% 3.59% 3.06%
</TABLE>

<TABLE>
<CAPTION>
Growth & Income Sub-Account (i)
December 31
------------------------------------------------------
1997 1996 1995 1994 (d)
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 13.03 $ 11.77 $ 9.49 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 2.61 0.76 0.49 0.29
Net realized and unrealized gain (loss) on investments ............. 0.45 0.50 1.79 (0.80)
-------- -------- -------- -------
Total income (loss) from operations ............................... 3.06 1.26 2.28 (0.51)
-------- -------- -------- -------
Accumulation unit value, end of period ............................... $ 16.09 $ 13.03 $ 11.77 $ 9.49
======== ======== ======== =======
Total return (a) ..................................................... 23.54% 10.64% 24.14% (5.15%)
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 9,063 $ 5,501 $ 2,631 $ 1,215
Ratios of net investment income (loss) to average net assets (b) .... 18.50% 6.38% 4.57% 3.71%
</TABLE>

60
<PAGE>

WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED

<TABLE>
<CAPTION>
Tactical Asset Allocation Sub-Account
December 31
---------------------------------------
1997 1996 1995 (e)
----------- ----------- -----------
<S> <C> <C> <C>
Accumulation unit value, beginning of period ......................... $ 13.50 $ 11.90 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.20 0.53 0.61
Net realized and unrealized gain (loss) on investments ............. 0.90 1.07 1.29
------- ------- --------
Total income (loss) from operations ............................... 2.10 1.60 1.90
------- ------- --------
Accumulation unit value, end of period ............................... $ 15.60 $ 13.50 $ 11.90
======= ======= ========
Total return (a) ..................................................... 15.55% 13.40% 19.03%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $29,123 $17,946 $ 9,446
Ratios of net investment income (loss) to average net assets (b) .... 8.14% 4.35% 5.47%
</TABLE>

<TABLE>
<CAPTION>
C.A.S.E. Growth
Sub-Account
December 31
-------------------------
1997 1996 (f)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 10.81 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 1.51 0.37
Net realized and unrealized gain (loss) on investments ............. 0.00 0.44
------- -------
Total income (loss) from operations ............................... 1.51 0.81
------- -------
Accumulation unit value, end of period ............................... $ 12.32 $ 10.81
======= =======
Total return (a) ..................................................... 14.00% 8.09%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $11,946 $ 4,466
Ratios of net investment income (loss) to average net assets (b) .... 12.65% 6.11%
</TABLE>

<TABLE>
<CAPTION>
Value Equity
Sub-Account
December 31
-------------------------
1997 1996 (f)
----------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 11.25 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.14 0.05
Net realized and unrealized gain (loss) on investments ............. 2.55 1.20
------- --------
Total income (loss) from operations ............................... 2.69 1.25
------- --------
Accumulation unit value, end of period ............................... $ 13.94 $ 11.25
======= ========
Total return (a) ..................................................... 23.93% 12.51%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $26,714 $ 8,887
Ratios of net investment income (loss) to average net assets (b) .... 1.05% 0.77%
</TABLE>

61
<PAGE>

WRL SERIES LIFE ACCOUNT
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED

<TABLE>
<CAPTION>
International U.S.
Equity Equity
Sub-Account Sub-Account
December 31 December 31
1997 (g) 1997 (g)
--------------- ------------
<S> <C> <C>
Accumulation unit value, beginning of period ......................... $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ....................................... (0.03) 0.99
Net realized and unrealized gain (loss) on investments ............. 0.68 1.60
------- --------
Total income (loss) from operations ............................... 0.65 2.59
------- --------
Accumulation unit value, end of period ............................... $ 10.65 $ 12.59
======= ========
Total return (a) ..................................................... 6.54% 25.89%
Ratios and supplemental data:
Net assets at end of period (in thousands) .......................... $ 2,289 $ 3,258
Ratios of net investment income (loss) to average net assets (b) .... (0.28%) 8.28%
</TABLE>

* The above tables illustrate the change for a unit outstanding computed using
average units outstanding throughout each period.
See Notes to Selected Per Unit Data and Ratios below.

NOTES TO SELECTED PER UNIT DATA AND RATIOS:

(a) For periods less than one year, the total return is not annualized.
(b) For periods less than one year, the ratio of net investment income to
average net assets is annualized.
(c) The inception date of this sub-account was March 1, 1993.
(d) The inception date of this sub-account was March 1, 1994.
(e) The inception date of this sub-account was January 3, 1995.
(f) The inception date of this sub-account was May 1, 1996.
(g) The inception date of this sub-account was January 2, 1997.
(h) Prior to May 1, 1997, this sub-account was known as Equity-Income.
(i) Prior to May 1, 1997, this sub-account was known as Utility.

62
<PAGE>

WRL SERIES LIFE ACCOUNT

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

NOTE 1 -- ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING
POLICIES

The WRL Series Life Account (the "Life Account"), was established as a
variable life insurance separate account of Western Reserve Life Assurance Co.
of Ohio ("WRL") and is registered as a unit investment trust ("Trust") under
the Investment Company Act of 1940, as amended. The Life Account contains
fourteen investment options referred to as sub-accounts. Each sub-account
invests in the corresponding Portfolio of the WRL Series Fund, Inc.
(collectively referred to as the "Fund" and individually as a "Portfolio"), a
registered management investment company under the Investment Company Act of
1940, as amended.

The Fund has entered into annually renewable investment advisory
agreements for each Portfolio with WRL Investment Management, Inc. ("WRL
Management") as investment adviser. Costs incurred in connection with the
advisory services rendered by WRL Management are paid by each Portfolio. WRL
Management has entered into sub-advisory agreements with various management
companies, some of which are affiliates of WRL. Each sub-adviser is compensated
directly by WRL Management.

Effective May 1, 1997, the names of the Equity-Income and Utility
Sub-Accounts were changed to the Strategic Total Return and Growth & Income
Sub-Accounts, respectively.

On December 16, 1997, pursuant to an exemptive order (Rel. No. IC-22944)
received from the Securities and Exchange Commission for the substitution of
securities issued by the WRL Series Fund and held by the Life Series Account to
support individual premium variable life insurance policies, investments were
transferred from the Short-to-Intermediate Government Sub-Account to the Bond
Sub-Account.

On January 2, 1997, WRL made an initial contribution of $ 600,000 to the
Life Account. The amount of the contribution and units received were as
follows:

<TABLE>
<CAPTION>
SUB-ACCOUNT CONTRIBUTION UNITS
- ----------------------- -------------- ----------------
<S> <C> <C>
International Equity $ 400,000 40,000.000000
U.S. Equity $ 200,000 20,000.000000
</TABLE>

On April 28, 1997, WRL redeemed the initial contribution in the
International Equity Sub-Account for $ 406,299 and the U.S. Equity sub-account
for $ 197,490.

The Life Account holds assets to support the benefits under certain
flexible premium variable universal life insur

ance policies (the "Policies") issued by WRL. The Life Account's equity
transactions are accounted for using the appropriate effective date at the
corresponding accumulation unit value.

The following significant accounting policies, which are in conformity
with generally accepted accounting principles for unit investment trusts, have
been consistently applied in the preparation of the Trust's financial
statements.

A. VALUATION OF INVESTMENTS AND SECURITIES TRANSACTIONS

Investments in the Fund's shares are stated at the closing net asset
value ("NAV") per share as determined by the Fund. Investment transactions are
accounted for on the trade date at the Fund NAV next determined after receipt
of sale or redemption orders without sales charges. Dividend income and capital
gains distributions are recorded on the ex-dividend date. The cost of
investments sold is determined on a first-in, first-out basis.

B. FEDERAL INCOME TAXES

The operations of the Life Account are a part of and are taxed with the
total operations of WRL, which is taxed as a life insurance company under the
Internal Revenue Code. Under current law the investment income of the Life
Account, including realized and unrealized capital gains, is not taxable to
WRL. Accordingly, no provision for Federal income taxes has been made.

C. ESTIMATES

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.

NOTE 2 --CHARGES AND DEDUCTIONS

Charges are assessed by WRL in connection with the issuance and
administration of the Policies.

A. POLICY CHARGES

Under some forms of the Policies, a sales charge and premium taxes are
deducted by WRL prior to allocation of policyowner payments to the
sub-accounts. Thereafter,

63
<PAGE>

WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(CONTINUED)

NOTE 2 --CHARGES AND DEDUCTIONS
--(CONTINUED)

monthly administrative and cost of insurance charges are deducted from the
sub-accounts. Contingent surrender charges also apply.

Under the other forms of the Policies, such "front-end" and other
administrative charges are deducted prior to allocation of the initial premium
payment but may reside as contingent surrender charges.

Under all forms of the Policy, monthly charges against policy cash values
are made to compensate WRL for costs of insurance provided.

B. LIFE ACCOUNT CHARGES

A daily charge equal to an annual rate of 0.90% of average daily net
assets is assessed to compensate WRL for assumption of mortality and expense
risks and administrative services in connection with issuance and
administration of the

Policies. This charge (not assessed at the individual contract level)
effectively reduces the value of a unit outstanding during the year.

NOTE 3 -- DIVIDENDS AND DISTRIBUTIONS

Dividends of the Money Market Portfolio are declared daily and reinvested
monthly. Dividends of the remaining Portfolios are typically declared and
reinvested semi-annually, while capital gains distributions are declared and
reinvested annually. Dividends and distributions of the Fund are recorded on
the ex-date and generally are paid to and reinvested by the Life Account on the
next business day after the ex-date. Dividends are not declared by the Life
Account, since the increase in the value of the underlying investment in the
Fund is reflected daily in the unit price used to calculate the equity value
within the Life Account. Consequently, a dividend distribution by the
underlying Fund does not change either the unit price or equity values within
the Life Account.

NOTE 4 -- SECURITIES TRANSACTIONS

Securities transactions are summarized as follows:
For the year or period ended December 31, 1997 (in thousands)

<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Purchase of long-term securities ........................................ $ 31,536 $ 7,334 $ 95,096
Proceeds from sales of long-term securities ............................. 27,586 1,711 9,617

STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities ........................................ $ 63,481 $ 20,134 $ 51,532
Proceeds from sales of long-term securities ............................. 2,595 1,789 5,791

AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities ........................................ $ 36,390 $ 4,654 $ 3,925
Proceeds from sales of long-term securities ............................. 2,757 571 683

TACTICAL ASSET C.A.S.E. VALUE
ALLOCATION GROWTH EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Purchase of long-term securities ........................................ $ 11,192 $ 8,860 $ 16,770
Proceeds from sales of long-term securities ............................. 1,496 1,124 2,030

INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Purchase of long-term securities ........................................ $ 4,574 $ 4,082
Proceeds from sales of long-term securities ............................. 2,322 931
(a) The inception date of this sub-account was January 2, 1997. .........
</TABLE>

64
<PAGE>

WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(CONTINUED)

NOTE 5 -- EQUITY TRANSACTIONS

For the year or period ended December 31, 1997

<TABLE>
<CAPTION>
MONEY MARKET BOND GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
<S> <C> <C> <C>
Units balance - beginning of year ........... 824,579.964824 593,289.952352 7,208,481.980640
Units issued ................................ 9,508,542.992920 567,591.792111 2,877,261.682232
Units redeemed .............................. 9,313,607.867949 325,011.550833 2,113,732.157906
---------------- -------------- ----------------
Units balance - end of year ................. 1,019,515.089795 835,870.193630 7,972,011.504966
================ ============== ================

STRATEGIC TOTAL EMERGING
GLOBAL RETURN GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 5,497,026.869725 3,569,906.038362 5,531,857.748031
Units issued ................................ 5,204,689.424549 1,808,954.429690 4,085,290.537514
Units redeemed .............................. 2,556,813.294554 1,108,535.542298 2,603,771.462693
---------------- ---------------- ----------------
Units balance - end of year ................. 8,144,902.999720 4,270,324.925754 7,013,376.822852
================ ================ ================

AGGRESSIVE GROWTH &
GROWTH BALANCED INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 3,702,244.184822 525,703.773282 422,239.257570
Units issued ................................ 3,540,013.078309 471,558.712099 351,937.078911
Units redeemed .............................. 2,011,986.165118 240,908.819634 211,046.686884
---------------- ---------------- ----------------
Units balance - end of year ................. 5,230,271.098013 756,353.665747 563,129.649597
================ ================ ================

TACTICAL ASSET C.A.S.E. VALUE
ALLOCATION GROWTH EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
Units balance - beginning of year ........... 1,329,562.261984 413,189.701539 789,884.882222
Units issued ................................ 1,163,050.985561 930,816.590801 1,771,718.827803
Units redeemed .............................. 625,352.214528 374,627.211274 645,715.985962
---------------- ---------------- ----------------
Units balance - end of year ................. 1,867,261.033017 969,379.081066 1,915,887.724063
================ ================ ================

INTERNATIONAL U.S.
EQUITY EQUITY
SUB-ACCOUNT (A) SUB-ACCOUNT (A)
Units balance - beginning of period ......... N/A N/A
Units issued ................................ 484,482.761817 392,911.124759
Units redeemed .............................. 269,593.719591 134,098.291700
---------------- ----------------
Units balance - end of period ............... 214,889.042226 258,812.833059
================ ================

(a) The inception date of this sub-account was January 2, 1997.
</TABLE>

65
<PAGE>

WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(CONTINUED)

NOTE 6 -- OTHER MATTERS

At December 31, 1997, the equity accounts included net unrealized appreciation
(depreciation) on investments as follows (in thousands):

<TABLE>
<CAPTION>
SUB-ACCOUNT
- ----------------------------------
<S> <C>
Money Market ................... $ N/A
Bond ........................... 331
Growth ......................... 90,809
Global ......................... 8,984
Strategic Total Return ......... 13,770
Emerging Growth ................ 31,177
Aggressive Growth .............. 9,032
Balanced ....................... 677
Growth & Income ................ 482
Tactical Asset Allocation ...... 2,489
C.A.S.E. Growth ................ (235)
Value Equity ................... 3,178
International Equity ........... (103)
U.S. Equity .................... 15
</TABLE>

66
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Western Reserve Life Assurance Co. of Ohio

We have audited the accompanying statutory-basis balance sheets of Western
Reserve Life Assurance Co. of Ohio as of December 31, 1997 and 1996, and the
related statutory-basis statements of operations, changes in capital and
surplus, and cash flows for each of the three years in the period ended
December 31, 1997. Our audits also included the statutory-basis financial
statement schedules required by Regulation S-X, Article 7. These financial
statements and schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits. We did not audit the "Separate Account Assets" and "Separate
Account Liabilities" in the balance sheets of the Company. The Separate Account
financial statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the data included
for the Separate Account, is based solely upon the reports of the other
auditors.

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

As described in Note 1 to the financial statements, the Company presents
its financial statements in conformity with accounting practices prescribed or
permitted by the Insurance Department of the State of Ohio, which practices
differ from generally accepted accounting principles. The variances between
such practices and generally accepted accounting principles are also described
in Note 1. The effects on the financial statements of these variances are not
reasonably determinable but are presumed to be material.

In our opinion, because of the effects of the matters described in the
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of Western Reserve Life Assurance Co. of Ohio at December
31, 1997 and 1996, or the results of its operations or its cash flows for each
of the three years in the period ended December 31, 1997.

Also, in our opinion, based on our audits and the reports of other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Western Reserve Life Assurance Co.
of Ohio at December 31, 1997 and 1996, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1997 in conformity with accounting practices prescribed or permitted by the
Insurance Department of the State of Ohio. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
statutory-basis financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

ERNST & YOUNG LLP
Des Moines, Iowa
February 27, 1998

67
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

BALANCE SHEETS - STATUTORY BASIS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
December 31
1997 1996
------------ ------------
<S> <C> <C>
ADMITTED ASSETS
Cash and invested assets:
Cash and short-term investments ................... $ 13,896 $ 2,480
Bonds ............................................. 255,919 359,579
Common stocks:
Affiliated entities (cost: 1997 - $150) ......... 319 -
Other (cost: 1997 and 1996 - $302) .............. 428 597
Mortgage loans on real estate ..................... 4,824 6,049
Home office properties ............................ 19,964 7,962
Policy loans ...................................... 76,741 52,604
---------- ----------
Total cash and invested assets ..................... 372,091 429,271
Premiums deferred and uncollected .................. 1,928 1,943
Accrued investment income .......................... 4,088 5,940
Receivable from affiliates ......................... - 1,165
Transfers from separate accounts ................... 279,958 204,181
Other assets ....................................... 5,221 3,962
Separate account assets ............................ 4,814,594 3,527,145
---------- ----------
Total admitted assets .............................. $5,477,880 $4,173,607
========== ==========
SEE ACCOMPANYING NOTES.
</TABLE>

68
<PAGE>

<TABLE>
<CAPTION>
December 31
1997 1996
------------- ------------
<S> <C> <C>
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate reserves for policies and contracts:
Life ................................................. $ 186,523 $ 155,166
Annuity .............................................. 296,290 332,230
Policy and contract claim reserves .................... 10,929 8,584
Other policyholders' funds ............................ 3,877 3,104
Remittances and items not allocated ................... 9,184 9,107
Federal income taxes payable .......................... 2,283 1,266
Asset valuation reserve ............................... 2,436 5,710
Interest maintenance reserve .......................... 9,134 7,451
Short-term note payable to affiliate .................. 8,200 -
Payable to affiliate .................................. 1,925 20,463
Other liabilities ..................................... 19,257 13,082
Separate account liabilities .......................... 4,812,979 3,521,888
---------- ----------
Total liabilities ...................................... 5,363,017 4,078,051
Commitments and contingencies
Capital and surplus:
Common stock, $1.00 par value, 1,500 shares authorized,
issued and outstanding .............................. 1,500 1,500
Paid-in surplus ....................................... 88,015 68,015
Unassigned surplus .................................... 25,348 26,041
---------- ----------
Total capital and surplus .............................. 114,863 95,556
---------- ----------
Total liabilities and capital and surplus .............. $5,477,880 $4,173,607
========== ==========
</TABLE>

SEE ACCOMPANYING NOTES.

69
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF OPERATIONS - STATUTORY BASIS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
Year ended December 31
1997 1996 1995
------------- ------------ -----------
<S> <C> <C> <C>
Revenues:
Premiums and other considerations, net of reinsurance:
Life ............................................................................... $ 394,370 $ 293,590 $ 191,508
Annuity ............................................................................ 822,149 740,125 378,390
Net investment income ............................................................... 40,013 36,067 40,891
Amortization of interest maintenance reserve ........................................ 1,576 1,335 882
Commissions and expense allowances on reinsurance ceded ............................. 11 11 11
Other income ........................................................................ 3,016 13,398 8,237
---------- ---------- ----------
1,261,135 1,084,526 619,919
Benefits and expenses:
Benefits paid or provided for:
Life ............................................................................... 28,060 21,256 17,844
Surrender benefits ................................................................. 431,939 286,406 206,250
Other benefits ..................................................................... 28,112 23,270 19,530
Increase (decrease) in aggregate reserves for policies and contracts: ..............
Life .............................................................................. 29,485 80,139 (15,132)
Annuity ........................................................................... (35,940) 12,877 5,229
Other ............................................................................. 794 422 109
---------- ---------- ----------
482,450 424,370 233,830
Insurance expenses:
Commissions ........................................................................ 179,106 140,261 82,903
General insurance expenses ......................................................... 70,546 47,406 37,246
Taxes, licenses and fees ........................................................... 13,101 10,848 8,919
Transfer to separate accounts ...................................................... 519,214 452,471 242,427
Other expenses ..................................................................... 21 60 34
---------- ---------- ----------
781,988 651,046 371,529
---------- ---------- ----------
1,264,438 1,075,416 605,359
---------- ---------- ----------
Gain (loss) from operations before federal income taxes and realized capital gains
(losses) on investments ............................................................ (3,303) 9,110 14,560
Federal income tax expense ........................................................... 469 9,297 8,917
---------- ---------- ----------
Gain (loss) from operations before realized capital gains (losses)
on investments ..................................................................... (3,772) (187) 5,643
Net realized capital gains (losses) on investments (net of related
federal income taxes and amounts transferred to interest
maintenance reserve) ............................................................... 747 (811) (1,678)
---------- ---------- ----------
Net income (loss) .................................................................... $ (3,025) $ (998) $ 3,965
========== ========== ==========
</TABLE>

SEE ACCOMPANYING NOTES.

70
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS - STATUTORY BASIS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK PAID-IN SURPLUS
-------------- -----------------
<S> <C> <C>
Balance at January 1, 1995 ........................... $1,500 $68,015
Net income for 1995 ................................. - -
Net unrealized capital losses ....................... - -
Decrease in non-admitted assets ..................... - -
Decrease in asset valuation reserve ................. - -
Increase in surplus in separate accounts ............ - -
Change in reserve valuation ......................... - -
Other adjustments ................................... - -
------ -------
Balance at December 31, 1995 ......................... 1,500 68,015
Net loss for 1996 ................................... - -
Net unrealized capital gains ........................ - -
Decrease in non-admitted assets ..................... - -
Increase in asset valuation reserve ................. - -
Increase in surplus in separate accounts ............ - -
Change in reserve valuation ......................... - -
------ -------
Balance at December 31, 1996 ......................... 1,500 68,015
Net loss for 1997 ................................... - -
Increase in non-admitted assets ..................... - -
Decrease in asset valuation reserve ................. - -
Decrease in surplus in separate accounts ............ - -
Change in reserve valuation ......................... - -
Capital contribution ................................ - 20,000
Tax effect of capital loss carry-forward utilized
by affiliates ..................................... - -
------ -------
Balance at December 31, 1997 ......................... $1,500 $88,015
====== =======

<CAPTION>
UNASSIGNED SURPLUS TOTAL CAPITAL AND SURPLUS
-------------------- --------------------------
<S> <C> <C>
Balance at January 1, 1995 ........................... $ 25,505 $ 95,020
Net income for 1995 ................................. 3,965 3,965
Net unrealized capital losses ....................... (500) (500)
Decrease in non-admitted assets ..................... 903 903
Decrease in asset valuation reserve ................. 2,901 2,901
Increase in surplus in separate accounts ............ 541 541
Change in reserve valuation ......................... (3,496) (3,496)
Other adjustments ................................... (1,395) (1,395)
-------- --------
Balance at December 31, 1995 ......................... 28,424 97,939
Net loss for 1996 ................................... (998) (998)
Net unrealized capital gains ........................ 1,294 1,294
Decrease in non-admitted assets ..................... 199 199
Increase in asset valuation reserve ................. (120) (120)
Increase in surplus in separate accounts ............ 237 237
Change in reserve valuation ......................... (2,995) (2,995)
-------- --------
Balance at December 31, 1996 ......................... 26,041 95,556
Net loss for 1997 ................................... (3,025) (3,025)
Increase in non-admitted assets ..................... (702) (702)
Decrease in asset valuation reserve ................. 3,274 3,274
Decrease in surplus in separate accounts ............ (2,115) (2,115)
Change in reserve valuation ......................... (1,872) (1,872)
Capital contribution ................................ - 20,000
Tax effect of capital loss carry-forward utilized
by affiliates ..................................... 3,747 3,747
-------- --------
Balance at December 31, 1997 ......................... $ 25,348 $114,863
======== --------
</TABLE>

SEE ACCOMPANYING NOTES.

71
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF CASH FLOWS - STATUTORY BASIS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Premiums and other considerations, net of reinsurance ...... $1,224,228 $1,046,548 $ 577,986
Net investment income ...................................... 43,802 38,666 42,359
Life and accident and health claims ........................ (26,005) (20,655) (16,759)
Surrender benefits and other fund withdrawals .............. (431,939) (286,406) (206,250)
Other benefits to policyholders ............................ (28,147) (22,129) (19,041)
Commissions, other expenses and other taxes ................ (261,352) (196,373) (128,341)
Net transfers to separate accounts ......................... (596,347) (658,326) (242,427)
Federal income taxes paid .................................. (5,006) (9,449) (7,531)
Interest paid .............................................. (731) - -
Other, net ................................................. (6,768) 28,325 (4,284)
---------- ---------- ----------
Net cash used in operating activities ...................... (88,265) (79,799) (4,288)
INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
Bonds and preferred stocks ................................ 146,963 122,820 108,554
Common stocks ............................................. - - 2,108
Mortgage loans on real estate ............................. 2,116 132 1,954
Real estate ............................................... - 4,304 -
Other ..................................................... - 175 -
---------- ---------- ----------
149,079 127,431 112,616
Cost of investments acquired ...............................
Bonds and preferred stocks ................................ (40,418) (26,826) (139,402)
Common stocks ............................................. (150) (4) (589)
Mortgage loans on real estate ............................. (891) - (6)
Real estate ............................................... (12,002) (7,837) (449)
Policy loans .............................................. (24,137) (15,479) (9,605)
Other ..................................................... - (5) -
---------- ----------- ----------
(77,598) (50,151) (150,051)
---------- ---------- ----------
Net cash provided by (used in) investing activities ........ 71,481 77,280 (37,435)
FINANCING ACTIVITIES
Issuance of short-term note payable to affiliate ........... 8,200 - -
Capital contribution ....................................... 20,000 - -
---------- ---------- ----------
Net cash provided by financing activities .................. 28,200 - -
---------- ---------- ----------
Increase (decrease) in cash and short-term investments ..... 11,416 (2,519) (41,723)
Cash and short-term investments at beginning of year ....... 2,480 4,999 46,722
---------- ---------- ----------
Cash and short-term investments at end of year ............. $ 13,896 $ 2,480 $ 4,999
========== ========== ==========
</TABLE>

SEE ACCOMPANYING NOTES.

72
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS - STATUTORY-BASIS

(DOLLARS IN THOUSANDS)

DECEMBER 31, 1997

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Western Reserve Life Assurance Co. of Ohio ("the Company") is a stock life
insurance company and is a wholly-owned subsidiary of First AUSA Life Insurance
Company which, in turn, is a wholly-owned subsidiary of AEGON USA, Inc.
("AEGON"). AEGON is a wholly-owned subsidiary of AEGON nv, a holding company
organized under the laws of the Netherlands.

NATURE OF BUSINESS

The Company operates predominantly in the variable universal life and variable
annuity areas of the life insurance business. The Company is licensed in 49
states and the District of Columbia. Sales of the Company's products are
through financial planners, independent representatives, financial institutions
and stockbrokers. The majority of the Company's new life insurance written and
a substantial portion of new annuities written is done through one marketing
organization; the Company expects to maintain this relationship for the
foreseeable future.

BASIS OF PRESENTATION

The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Such estimates and assumptions
could change in the future as more information becomes known, which could
impact the amounts reported and disclosed herein.

The accompanying financial statements have been prepared in conformity with
accounting practices prescribed or permitted by the Insurance Department of the
State of Ohio, which practices differ from generally accepted accounting
principles. The more significant of these differences are as follows: (a) bonds
are generally carried at amortized cost rather than segregating the portfolio
into held-to-maturity (reported at amortized cost), available-for-sale
(reported at fair value), and trading (reported at fair value) classifications;
(b) acquisition costs of acquiring new business are expensed as incurred rather
than deferred and amortized over the life of the policies; (c) policy reserves
on traditional life products are based

on statutory mortality rates and interest which may differ from reserves based
on reasonable assumptions of expected mortality, interest, and withdrawals
which include a provision for possible unfavorable deviation from such
assumptions; (d) policy reserves on certain investment products use discounting
methodologies utilizing statutory interest rates rather than full account
values; (e) reinsurance amounts are netted against the corresponding asset or
liability rather than shown as gross amounts on the balance sheet; (f) deferred
income taxes are not provided for the difference between the financial
statement amounts and income tax bases of assets and liabilities; (g) net
realized gains or losses attributed to changes in the level of interest rates
in the market are deferred and amortized over the remaining life of the bond or
mortgage loan, rather than recognized as gains or losses in the statement of
operations when the sale is completed; (h) declines in the estimated realizable
value of investments are provided for through the establishment of a
formula-determined statutory investment reserve (reported as a liability)
changes to which are charged directly to surplus, rather than through
recognition in the statement of operations for declines in value, when such
declines are judged to be other than temporary; (i) certain assets designated
as "non-admitted assets" have been charged to surplus rather than being
reported as assets; (j) revenues for universal life and investment products
consist of the entire premiums received rather than policy charges for the cost
of insurance, policy administration charges, amortization of policy initiation
fees and surrender charges assessed; (k) pension expense is recorded as amounts
are paid rather than accrued and expensed during the periods in which the
employers provide service; and (l) the financial statements of wholly-owned
affiliates are not consolidated with those of the Company. The effects of these
variances have not been determined by the Company.

The National Association of Insurance Commissioners (NAIC) currently is in the
process of recodifying statutory accounting practices, the result of which is
expected to constitute the only source of "prescribed" statutory accounting
practices. Accordingly, that project, which is expected to be completed in
1998, will likely change, to some extent, prescribed statutory accounting
practices and may result in changes to the accounting practices that the
Company uses to prepare its statutory-basis financial statements. The impact of
any such changes on the Company's statutory surplus cannot be determined at
this time and could be material.

73
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

Other significant statutory accounting practices are as follows:

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company considers all highly
liquid investments with remaining maturities of one year or less when purchased
to be cash equivalents.

INVESTMENTS

Investments in bonds (except those to which the Securities Valuation Office of
the NAIC has ascribed a value), mortgage loans on real estate and short-term
investments are reported at cost adjusted for amortization of premiums and
accrual of discounts. Amortization is computed using methods which result in a
level yield over the expected life of the security. The Company reviews its
prepayment assumptions on mortgage and other asset backed securities at regular
intervals and adjusts amortization rates retrospectively when such assumptions
are changed due to experience and/or expected future patterns. Common stocks of
unaffiliated companies are carried at market and include shares of mutual funds
(money market and other), and the related unrealized capital gains/ (losses)
are reported in unassigned surplus without any adjustment for federal income
taxes. Common stocks of the Company's wholly-owned affiliates are recorded at
the equity in net assets. Home office property is reported at cost less
allowances for depreciation. Depreciation is computed principally by the
straight-line method. Policy loans are reported at unpaid principal. Other
"admitted assets" are valued, principally at cost, as required or permitted by
Ohio Insurance Laws.

Realized capital gains and losses are determined on the basis of specific
identification and are recorded net of related federal income taxes. The Asset
Valuation Reserve (AVR) is established by the Company to provide for
anticipated losses in the event of default by issuers of certain invested
assets. These amounts are determined using a formula prescribed by the NAIC and
are reported as a liability. The formula for the AVR provides for a
corresponding adjustment for realized gains and losses. Under a formula
prescribed by the NAIC,

the Company defers, in the Interest Maintenance Reserve (IMR), the portion of
realized gains and losses on sales of fixed income investments, principally
bonds and mortgage loans, attributable to changes in the general level of
interest rates and amortizes those deferrals over the remaining period to
maturity of the security.

During 1997, 1996 and 1995, net realized capital gains of $3,259, $2,394 and
$554, respectively, were credited to the IMR rather than being immediately
recognized in the statements of operations. Amortization of these net gains
aggregated $1,576, $1,335 and $882 for the years ended December 31, 1997, 1996
and 1995, respectively.

Interest income is recognized on an accrual basis. The Company does not accrue
income on bonds in default, mortgage loans on real estate in default and/or
foreclosure or which are delinquent more than twelve months, or real estate
where rent is in arrears for more than three months. Further, income is not
accrued when collection is uncertain. No investment income due and accrued has
been excluded for the years ended December 31, 1997, 1996 and 1995, with
respect to such practices.

AGGREGATE RESERVES FOR POLICIES

Life and annuity reserves are developed by actuarial methods and are determined
based on published tables using statutorily specified interest rates and
valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum required by law.

The aggregate policy reserves for life insurance policies are based principally
upon the 1941, 1958 and 1980 Commissioners' Standard Ordinary Mortality and
American Experience Mortality Tables. The reserves are calculated using
interest rates ranging from 2.25 to 5.50 percent and are computed principally
on the Net Level Premium Valuation and the Commissioners' Reserve Valuation
Methods. Reserves for universal life policies are based on account balances
adjusted for the Commissioners' Reserve Valuation Method.

Deferred annuity reserves are calculated according to the Commissioners'
Annuity Reserve Valuation Method including excess interest reserves to cover
situations where the future interest guarantees plus the decrease in surrender
charges are in excess of the maximum valuation rates of interest.

74
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

Reserves for immediate annuities and supplementary contracts with life
contingencies are equal to the present value of future payments assuming
interest rates ranging from 5.75 to 8.75 percent and mortality rates, where
appropriate, from a variety of tables.

POLICY AND CONTRACT CLAIM RESERVES

Claim reserves represent the estimated accrued liability for claims reported to
the Company and claims incurred but not yet reported through the statement
date. These reserves are estimated using either individual case-basis
valuations or statistical analysis techniques. These estimates are subject to
the effects of trends in claim severity and frequency. The estimates are
continually reviewed and adjusted as necessary as experience develops or new
information becomes available.

SEPARATE ACCOUNTS

Assets held in trust for purchases of variable universal life and variable
annuity contracts and the Company's corresponding obligation to the contract
owners are shown separately in the balance sheets. The assets in the separate
accounts are valued at market. Income and gains and losses with respect to the
assets in the separate accounts accrue to the benefit of the policyholders and,
accordingly, the operations of the separate accounts are not included in the
accompanying financial statements. The separate accounts do not have any
minimum guarantees and the investment risks associated with market value
changes are borne entirely by the policyholders. The Company received variable
contract premiums of $1,164,013, $997,513 and $466,822 in 1997, 1996 and 1995,
respectively. All variable account contracts are subject to discretionary
withdrawal by the policyholder at the market value of the underlying assets
less the current surrender charge. Separate account contractholders have no
claim against the assets of the general account.

RECLASSIFICATIONS

Certain reclassifications have been made to the 1996 and 1995 financial
statements to conform to the 1997 presentation.

NOTE 2 -- FAIR VALUES OF FINANCIAL
INSTRUMENTS

Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, requires disclosure of fair value information
about financial instruments, whether or not recognized in the statutory-basis
balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. In that regard, the derived fair value
estimates cannot be substantiated by comparisons to independent markets and, in
many cases, could not be realized in immediate settlement of the instrument.
Statement of Financial Accounting Standards No. 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure requirements
and allows companies to forego the disclosures when those estimates can only be
made at excessive cost. Accordingly, the aggregate fair value amounts presented
do not represent the underlying value of the Company.

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

CASH AND SHORT-TERM INVESTMENTS: The carrying amounts reported in the
statutory-basis balance sheet for these instruments approximate their fair
values.

INVESTMENT SECURITIES: Fair values for fixed maturity securities (including
redeemable preferred stocks) are based on quoted market prices, where
available. For fixed maturity securities not actively traded, fair values are
estimated using values obtained from independent pricing services or (in the
case of private placements) are estimated by discounting expected future cash
flows using a current market rate applicable to the yield, credit quality, and
maturity of the investments. The fair values for equity securities are based on
quoted market prices.

MORTGAGE LOANS AND POLICY LOANS: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans are assumed to equal their carrying
value.

INVESTMENT CONTRACTS: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash flow
calculations, based on interest

75
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 2 -- FAIR VALUES OF FINANCIAL
INSTRUMENTS--(CONTINUED)

rates currently being offered for similar contracts with maturities consistent
with those remaining for the contracts being valued.

Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure to
changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.

The following sets forth a comparison of the fair values and carrying values of
the Company's financial instruments subject to the provisions of Statement of
Financial Accounting Standards No. 107:

<TABLE>
<CAPTION>
December 31
1997 1996
--------------------------- ---------------------------
CARRYING FAIR Carrying Fair
VALUE VALUE Value Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ADMITTED ASSETS
Bonds ................ $ 255,919 $ 267,763 $ 359,579 $ 372,319
Common stocks ........ 747 747 597 597
Mortgage loans
on real estate ..... 4,824 5,143 6,049 6,134
Policy loans ......... 76,741 76,741 52,604 52,604
Cash and
short-term
investments ........ 13,896 13,896 2,480 2,480
Separate account
assets ............. 4,814,594 4,814,594 3,527,145 3,527,145

LIABILITIES
Investment
contract
liabilities ........ 280,121 276,113 321,293 314,748
Separate account
annuities .......... 3,615,255 3,565,557 2,692,614 2,647,266
</TABLE>

NOTE 3 -- INVESTMENTS

The carrying value and estimated fair value of investments in debt securities
are as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1997
Bonds:
United States
Government
and agencies ...... $ 3,675 $ 9 $ 30 $ 3,654
State, municipal
and other
government ........ 3,855 360 - 4,215
Public utilities ..... 15,794 904 403 16,295
Industrial and
miscellaneous ..... 121,513 7,700 710 128,503
Mortgage-backed
securities ........ 111,082 4,198 184 115,096
-------- ------- ------ --------
Total bonds .......... $255,919 $13,171 $1,327 $267,763
======== ======= ====== ========
</TABLE>

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
Bonds:
United States
Government and
agencies .............. $ 11,422 $ 13 $ 292 $ 11,143
State, municipal
and other
government ............ 5,504 274 - 5,778
Public utilities ......... 14,808 848 80 15,576
Industrial and
miscellaneous ......... 173,097 8,889 910 181,076
Mortgage-backed
securities ............ 154,748 4,617 619 158,746
-------- ------- ------ --------
Total bonds .............. $359,579 $14,641 $1,901 $372,319
======== ======= ====== ========
</TABLE>

The carrying value and fair value of bonds at December 31, 1997 by contractual
maturity are shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalties.

76
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 3 -- INVESTMENTS--(CONTINUED)

<TABLE>
<CAPTION>
ESTIMATED
CARRYING FAIR
VALUE VALUE
---------- ----------
<S> <C> <C>
Due in one year or less ............................ $ 18,310 $ 18,467
Due one through five years ......................... 67,005 70,952
Due five through ten years ......................... 29,508 30,621
Due after ten years ................................ 30,014 32,627
-------- --------
144,837 152,667
Mortgage and other asset backed securities ......... 111,082 115,096
-------- --------
$255,919 $267,763
======== ========
</TABLE>

A detail of net investment income is presented below:

<TABLE>
<CAPTION>
Year ended December 31
------------------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Interest on bonds ....................... $25,723 $33,969 $38,624
Dividends on equity investments ......... 10,855 - 30
Interest on mortgage loans .............. 478 559 573
Rental income on real estate ............ 1,371 919 1,014
Interest on policy loans ................ 4,656 3,339 2,353
Other investment income ................. 26 9 328
------- ------- -------
Gross investment income ................. 43,109 38,795 42,922

Investment expenses ..................... (3,096) (2,728) (2,031)
------- ------- -------
Net investment income ................... $40,013 $36,067 $40,891
======= ======= =======
</TABLE>

Proceeds from sales and maturities of debt securities and related gross
realized gains and losses were as follows:

<TABLE>
<CAPTION>
Year ended December 31
---------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Proceeds ...................... $146,963 $122,820 $108,554
======== ======== ========

Gross realized gains .......... $ 3,921 $ 2,984 $ 1,631
Gross realized losses ......... 626 791 1,346
-------- -------- --------
Net realized gains ............ $ 3,295 $ 2,193 $ 285
======== ======== ========
</TABLE>

At December 31, 1997, bonds with an aggregate carrying value of $5,474 were on
deposit with certain state regulatory authorities or were restrictively held in
bank custodial accounts for benefit of such state regulatory authorities, as
required by statute.

Realized investment gains (losses) and changes in unrealized gains (losses) for
investments are summarized below:

<TABLE>
<CAPTION>
Realized
---------------------------------------
Year ended December 31
---------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Debt securities .................................. $3,295 $2,193 $ 285
Mortgage loans ................................... - - (1,409)
Real estate ...................................... - (606) -
Other invested assets ............................ - (4) -
------ ------- -------
3,295 1,583 (1,124)

Tax benefit ...................................... (711) - -
Transfer to interest maintenance reserve ......... (3,259) (2,394) (554)
------ ------ -------
Net realized gains (losses) ...................... $ 747 $ (811) $(1,678)
====== ====== =======
</TABLE>

<TABLE>
<CAPTION>
Change in Unrealized
---------------------------------------
Year ended December 31
---------------------------------------
1997 1996 1995
---------- ------------- ----------
<S> <C> <C> <C>
Debt securities ................. $ (896) $(14,442) $36,399
Common stock .................... - (66) (236)
------ -------- -------
Change in unrealized appreciation
(depreciation) ................ $ (896) $(14,508) $36,163
====== ======== =======
</TABLE>

Gross unrealized gains (losses) on common stocks were as follows:

<TABLE>
<CAPTION>
Unrealized
-------------------------
Year ended December 31
-------------------------
1997 1996 1995
------ ------ -------
<S> <C> <C> <C>

Unrealized gains ............. $295 $295 $361
Unrealized losses ............ - - -
---- ---- ----
Net unrealized gains ......... $295 $295 $361
==== ==== ====
</TABLE>

During 1997, the Company issued one mortgage loan with an interest rate of
8.07%. The maximum percentage of any one mortgage loan to the value of the
underlying real estate at origination was 69%. The Company requires all
mortgagees to carry fire insurance equal to the value of the underlying
property.

77
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 3 -- INVESTMENTS--(CONTINUED)

During 1997, 1996 and 1995, no mortgage loans were foreclosed and transferred
to real estate. During 1997 and 1996, the Company held a mortgage loan loss
reserve in the asset valuation reserve of $54 and $138, respectively.

At December 31, 1997, the Company had no investments (excluding U. S.
Government guaranteed or insured issues) which individually represented more
than ten percent of capital and surplus and the asset valuation reserve.

NOTE 4 -- REINSURANCE

The Company reinsures portions of certain insurance policies which exceed its
established limits, thereby providing a greater diversification of risk and
minimizing exposure on larger risks. The Company remains contingently liable
with respect to any insurance ceded, and this would become an actual liability
in the event that the assuming insurance company became unable to meet its
obligations under the reinsurance treaty.

<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- -----------
<S> <C> <C> <C>
Direct premiums ............. $1,219,271 $1,034,757 $570,413
Reinsurance assumed ......... 2,389 2,063 1,569
Reinsurance ceded ........... (5,141) (3,105) (2,084)
---------- ---------- --------
Net premiums earned ......... $1,216,519 $1,033,715 $569,898
========== ========== ========
</TABLE>

The Company received reinsurance recoveries in the amount of $2,288, $2,156 and
$512 during 1997, 1996 and 1995, respectively. At December 31, 1997 and 1996,
estimated amounts recoverable from reinsurers that have been deducted from
policy and contract claim reserves totaled $2,721 and $974, respectively. The
aggregate reserves for policies and contracts were reduced for reserve credits
for reinsurance ceded at December 31, 1997 and 1996 of $1,369 and $1,140,
respectively.

NOTE 5 -- INCOME TAXES

For federal income tax purposes, the Company joins in a consolidated tax return
filing with certain affiliated companies. Under the terms of a tax-sharing
agreement between the Company and its affiliates, the Company computes federal
income tax expense as if it were filing a separate income tax return, except
that tax credits and net operating loss carryforwards are determined on the
basis of the consolidated group. Additionally, the alternative minimum tax is
computed

for the consolidated group and the resulting tax, if any, is allocated back to
the separate companies on the basis of the separate companies' alternative
minimum taxable income.

Federal income tax expense differs from the amount computed by applying the
statutory federal income tax rate to gain from operations before taxes and
realized capital gains (losses) for the following reasons:

<TABLE>
<CAPTION>
1997 1996 1995
------------ --------- ---------
<S> <C> <C> <C>
Computed tax at federal statutory rate
(35%) ........................................ $ (1,156) $3,189 $5,096
Deferred acquisition costs - tax basis ......... 9,164 7,172 4,241
Tax reserve valuation .......................... (194) (696) (34)
Excess tax depreciation ........................ (127) (65) (49)
Amortization of IMR ............................ (552) (467) (309)
Dividend received deduction .................... (5,326) - -
Other, net ..................................... (1,340) 164 (28)
-------- ------ ------
Federal income tax expense ..................... $ 469 $9,297 $8,917
======== ====== ======
</TABLE>

For the year ended December 31, 1997, federal income tax benefit differs from
the amount computed by applying the statutory federal income tax rate to
realized gains due to the recognition for tax purposes of a deferred loss
previously incurred on a transfer of bonds from the Company to an affiliate.

Prior to 1984, as provided for under the Life Insurance Company Tax Act of
1959, a portion of statutory income was not subject to current taxation, but
was accumulated for income tax purposes in a memorandum account referred to as
the policyholders' surplus account. No federal income taxes have been provided
for in the financial statements on income deferred in the policyholders'
surplus account ($293 at December 31, 1997). To the extent dividends are paid
from the amount accumulated in the policyholders' surplus account, net earnings
would be reduced by the amount of tax required to be paid. Should the entire
amount in the policyholders' surplus account become taxable, the tax thereon
computed at current rates would amount to approximately $103.

In 1995, the Company reached a final settlement with the Internal Revenue
Service for 1987 through 1993 resulting in taxes of $1,275 and interest of $120
(net of $65 tax effect). The assessment was charged to surplus as a prior
period adjustment. An examination is currently underway for years 1994 through
1995.

78
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 5 -- INCOME TAXES--(CONTINUED)

At December 31, 1996, the Company had capital loss carryforwards of
approximately $10,705, which were utilized by the Company's affiliates in the
consolidated tax return filing in 1997. This transaction resulted in a receipt
from the Company's affiliate of $3,747, which was credited directly to
unassigned surplus.

NOTE 6 -- POLICY AND CONTRACT ATTRIBUTES

Participating life insurance policies are issued by the Company which entitle
policyholders to a share in the earnings of the participating policies,
provided that a dividend distribution, which is determined annually based on
mortality and persistency experience of the participating policies, is
authorized by the Company. Participating insurance constituted approximately
.03% and .04% of life insurance in force at December 31, 1997 and 1996,
respectively.

A portion of the Company's policy reserves and other policyholders' funds
relate to liabilities established on a variety of the Company's products,
primarily separate accounts, that are not subject to significant mortality or
morbidity risk; however, there may be certain restrictions placed upon the
amount of funds that can be withdrawn without penalty. The amount of reserves
on these products, by withdrawal characteristics are summarized as follows:

<TABLE>
<CAPTION>
December 31
----------------------------------------------
1997 1996
----------------------- ----------------------
PERCENT Percent
AMOUNT OF TOTAL Amount of Total
------------ ---------- ------------ ---------
<S> <C> <C> <C> <C>
Subject to discretionary
withdrawal with market
value adjustment .............. $ 13,812 1% $ 14,881 1%
Subject to discretionary
withdrawal at book value
less surrender charge ......... 68,376 2 63,619 2
Subject to discretionary
withdrawal at market value 3,615,255 91 2,692,614 89
Subject to discretionary
withdrawal at book value
(minimal or no charges or
adjustments) .................. 201,457 5 239,204 7
Not subject to discretionary
withdrawal provision .......... 16,572 1 17,603 1
---------- -- ---------- --
3,915,472 100% 3,027,921 100%
===== =====
Less reinsurance ceded .......... - -
---------- ----------

</TABLE>
<TABLE>
<CAPTION>
December 31
----------------------------------------------
1997 1996
----------------------- ----------------------
PERCENT Percent
AMOUNT OF TOTAL Amount of Total
------------ ---------- ------------ ---------
<S> <C> <C> <C> <C>
Total policy reserves on
annuities and deposit fund
liabilities ................... $3,915,472 $3,027,921
========== ==========
</TABLE>

A reconciliation of the amounts transferred to and from the separate accounts
is presented below:

<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- -----------
<S> <C> <C> <C>
Transfers as reported in the
summary of operations of the
separate accounts statement:
Transfers to separate accounts ......... $1,164,013 $997,513 $466,882
Transfers from separate
accounts ............................. 646,477 339,523 224,416
---------- -------- ---------
Net transfers to separate
accounts ............................. 517,536 657,990 242,466
Reconciling adjustments - change
in accruals for investment
management, administration
fees and contract guarantees,
and separate account surplus ......... 1,678 (205,519) (39)
---------- -------- ---------
Transfers as reported in the
summary of operations of the
life, accident and health annual
statement ............................ $ 519,214 $452,471 $242,427
========== ======== =========
</TABLE>

Reserves on the Company's traditional life products are computed using mean
reserving methodologies. These methodologies result in the establishment of
assets for the amount of the net valuation premiums that are anticipated to be
received between the policy's paid-through date to the policy's next
anniversary date. At December 31, 1997 and 1996, these assets (which are
reported as premiums deferred and uncollected) and the amounts of the related
gross premiums and loadings, are as follows:

<TABLE>
<CAPTION>
GROSS LOADING NET
--------- --------- --------
<S> <C> <C> <C>
DECEMBER 31, 1997
Ordinary direct first year business ......... $ 2 $ 1 $ 1
Ordinary direct renewal business ............ 1,350 140 1,210
Group life direct business .................. 717 - 717
------ ---- ------
$2,069 $141 $1,928
====== ==== ======

</TABLE>

79
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 6 -- POLICY AND CONTRACT ATTRIBUTES--(CONTINUED)

<TABLE>
<CAPTION>
GROSS LOADING NET
--------- --------- ---------
<S> <C> <C> <C>
DECEMBER 31, 1996
Ordinary direct first year business ......... $ 40 $ 9 $ 31
Ordinary direct renewal business ............ 1,431 225 1,206
Group life direct business .................. 622 - 622
Annuity renewal business .................... 94 10 84
------ ---- ------
$2,187 $244 $1,943
====== ==== ======
</TABLE>

At December 31, 1997 and 1996, the Company had insurance in force aggregating
$1,710 and $1,904, respectively, in which the gross premiums are less than the
net premiums required by the standard valuation standards established by the
Insurance Department of the State of Ohio. The Company established policy
reserves of $26 and $27 to cover these deficiencies at December 31, 1997 and
1996, respectively.

In 1994, the NAIC enacted a guideline to clarify reserving methodologies for
contracts that require immediate payment of claims upon proof of death of the
insured. Companies were allowed to grade the effects of the change in reserving
methodologies over five years. A direct charge to surplus of $1,872, $2,995 and
$3,496 was made for the years ended December 31, 1997, 1996 and 1995,
respectively, related to the change in reserve methodology.

NOTE 7 -- DIVIDEND RESTRICTIONS

Generally, an insurance company's ability to pay dividends is limited to the
amount that their net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements. However,
payment of such amounts as dividends may be subject to approval by regulatory
authorities.

NOTE 8 -- RETIREMENT AND COMPENSATION PLANS

The Company's employees participate in a qualified benefit plan sponsored by
AEGON. The Company has no legal obligation for the plan. The Company recognizes
pension expense equal to its allocation from AEGON. The pension expense is
allocated among the participating companies based on the FASB Statement No. 87
expense as a percent of salaries. The benefits are based on years of service
and the employee's compensation during the highest five consecutive years of

employment. Pension expense aggregated $659, $581 and $505 for the years ended
December 31, 1997, 1996 and 1995, respectively. The plan is subject to the
reporting and disclosure requirements of the Employee Retirement and Income
Security Act of 1974.

The Company's employees also participate in a contributory defined contribution
plan sponsored by AEGON which is qualified under Section 401(k) of the Internal
Revenue Service Code. Employees of the Company who customarily work at least
1,000 hours during each calendar year and meet the other eligibility
requirements are participants of the plan. Participants may elect to contribute
up to fifteen percent of their salary to the plan. The Company will match an
amount up to three percent of the participant's salary. Participants may direct
all of their contributions and plan balances to be invested in a variety of
investment options. The plan is subject to the reporting and disclosure
requirements of the Employee Retirement and Income Security Act of 1974.
Pension expense related to this plan was $448, $184 and $305 for the years
ended December 31, 1997, 1996 and 1995, respectively.

AEGON sponsors supplemental retirement plans to provide the Company's senior
management with benefits in excess of normal pension benefits. The plans are
noncontributory and benefits are based on years of service and the employee's
compensation level. The plans are unfunded and nonqualified under the Internal
Revenue Code. In addition, AEGON has established incentive deferred
compensation plans for certain key employees of the Company. AEGON also
sponsors an employee stock option plan for individuals employed at least three
years and a stock purchase plan for its producers, with the participating
affiliated companies establishing their own eligibility criteria, producer
contribution limits and company matching formula. These plans have been accrued
or funded as deemed appropriate by management of AEGON and the Company.

In addition to pension benefits, the Company participates in plans sponsored by
AEGON that provide postretirement medical, dental and life insurance benefits
to employees meeting certain eligibility requirements. Portions of the medical
and dental plans are contributory. The expenses of the postretirement plans
calculated on the pay-as-you-go basis are charged to affiliates in accordance
with an intercompany cost

80
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTES TO THE FINANCIAL STATEMENTS -- STATUTORY-BASIS (CONTINUED)
(DOLLARS IN THOUSANDS)

NOTE 8 -- RETIREMENT AND COMPENSATION PLANS--(CONTINUED)

sharing arrangement. The Company expensed $99, $98 and $86 for the years ended
December 31, 1997, 1996 and 1995, respectively.

NOTE 9 -- RELATED PARTY TRANSACTIONS

The Company shares certain officers, employees and general expenses with
affiliated companies.

The Company receives data processing, investment advisory and management,
marketing and administration services from certain affiliates. During 1997,
1996 and 1995, the Company paid $10,040, $10,038 and $8,825, respectively, for
such services, which approximates their costs to the affiliates. Company
provides office space, marketing and administrative services to certain
affiliates. During 1997, 1996 and 1995, the Company received $4,395, $3,271 and
$4,545, respectively, for such services, which approximates their cost. The
Company had a net payable with affiliates of $1,925 and $19,298 at December 31,
1997 and 1996, respectively.

Payable to affiliates and intercompany borrowings bear interest at the
thirty-day commercial paper rate of 5.33% at December 31, 1997. During 1997,
1996 and 1995, the Company paid (received) net interest of $364, $138 and
$(294), respectively, to (from) affiliates.

The Company received capital contributions of $20,000 from its parent in 1997.

At December 31, 1997, the Company has a $8,200 short-term note payable to an
affiliate. Interest on this note accrues at 5.60 %.

NOTE 10 -- COMMITMENTS AND CONTINGENCIES

The Company is a party to legal proceedings incidental to its business.
Although such litigation sometimes includes substantial demands for
compensatory and punitive damages in addition to contract liability, it is
management's opinion, after consultation with counsel and a review of available
facts, that damages arising from such demands will not be material to the
Company's financial position.

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of

policyholders and claimants in the event of insolvency of other insurance
companies. Assessments are charged to operations when received by the Company
except where right of offset against other taxes paid is allowed by law;
amounts available for future offsets are recorded as an asset on the Company's
balance sheet. The future obligation has been based on the most recent
information available from the National Organization of Life and Health
Insurance Guaranty Association. Potential future obligations for unknown
insolvencies are not determinable by the Company. The Company has established a
reserve of $4,007 and $4,344 and an offsetting premium tax benefit of $1,070
and $1,218 at December 31, 1997 and 1996, respectively, for its estimated share
of future guaranty fund assessments related to several major insurer
insolvencies. The guaranty fund expense was $0, $212 and $1,950 at December 31,
1997, 1996 and 1995, respectively.

NOTE 11 -- YEAR 2000 (UNAUDITED)

AEGON has adopted and has in place a Year 2000 Assessment and Planning Project
(the "Project") to review and analyze its information technology and systems to
determine if they are Year 2000 compatible. The Company has begun to convert or
modify, where necessary, critical data processing systems. It is contemplated
that the plan will be substantially completed by early 1999. The Company does
not expect this project to have a significant effect on operations. However, to
mitigate the effect of outside influences upon the success of the project, the
Company has undertaken communications with its significant customers, suppliers
and other third parties to determine their Year 2000 compatibility and
readiness. Management believes that the issues associated with the Year 2000
will be resolved with no material financial impact on the Company.

Since the Year 2000 computer problem, and its resolution is complex and
multifaceted, the success of a response plan cannot be conclusively known until
the Year 2000 is reached (or an earlier date to the extent that systems or
equipment addresses Year 2000 date data prior to the Year 2000). Even with
appropriate and diligent pursuit of a well-conceived Project, including testing
procedures, there is no certainty that any company will achieve complete
success. Notwithstanding the efforts or results of the Company, its ability to
function unaffected to and through the Year 2000 may be adversely affected by
actions (or failure to act) of third parties beyond its knowledge or control.

81
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
(DOLLARS IN THOUSANDS)

DECEMBER 31, 1997

SCHEDULE I

<TABLE>
<CAPTION>
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST (1) VALUE BALANCE SHEET
- -------------------------------------------------------------------- ---------- ---------- ----------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds:
United States Government and government agencies and authorities .. $ 65,611 $ 68,452 $ 65,611
States, municipalities and political subdivisions ................. 1,840 1,974 1,840
Foreign governments ............................................... 2,015 2,241 2,015
Public utilities .................................................. 15,794 16,295 15,794
All other corporate bonds ......................................... 170,659 178,801 170,659
-------- -------- --------
Total fixed maturities ............................................. 255,919 267,763 255,919
EQUITY SECURITIES
Common stocks:
Industrial, miscellaneous and all other ........................... 452 747 747
-------- -------- --------
Total equity securities ............................................ 452 747 747
Mortgage loans on real estate ...................................... 4,824 4,824
Real estate ........................................................ 19,964 19,964
Policy loans ....................................................... 76,741 76,741
Cash and short-term investments .................................... 13,896 13,896
-------- --------
Total investments .................................................. $371,796 $372,091
======== ========
</TABLE>

(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accruals of discounts.

82
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

SUPPLEMENTARY INSURANCE INFORMATION

(DOLLARS IN THOUSANDS)

SCHEDULE III

<TABLE>
<CAPTION>
BENEFITS,
CLAIMS,
FUTURE POLICY POLICY AND NET LOSSES AND OTHER
BENEFITS AND CONTRACT PREMIUM INVESTMENT SETTLEMENT OPERATING
EXPENSES LIABILITIES REVENUE INCOME* EXPENSES EXPENSES*
--------------- ------------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Individual life ............... $177,088 $ 9,533 $ 390,452 $13,742 $ 88,738 $176,303
Group life .................... 9,435 805 3,918 810 3,986 3,292
Annuity ....................... 296,290 591 822,149 25,461 389,726 83,179
-------- ------- ---------- ------- -------- --------
$482,813 $10,929 $1,216,519 $40,013 $482,450 $262,774
======== ======= ========== ======= ======== ========
YEAR ENDED DECEMBER 31, 1996
Individual life ............... $145,964 $ 7,017 $ 289,375 $ 8,228 $125,861 $124,181
Group life and health ......... 9,202 713 4,215 3,940 3,828 2,818
Annuity ....................... 332,230 854 740,125 23,899 294,681 71,576
-------- ------- ---------- ------- -------- --------
$487,396 $ 8,584 $1,033,715 $36,067 $424,370 $198,575
======== ======= ========== ======= ======== ========
YEAR ENDED DECEMBER 31, 1995
Individual life ............... $ 64,128 $ 5,811 $ 188,143 $ 9,470 $ 20,048 $ 83,709
Group life .................... 7,904 701 3,365 1,054 2,774 946
Annuity ....................... 319,353 100 378,390 30,367 211,008 44,447
-------- ------- ---------- ------- -------- --------
$391,385 $ 6,612 $ 569,898 $40,891 $233,830 $129,102
======== ======= ========== ======= ======== ========
</TABLE>

*Allocations of net investment income and other operating expenses are based on
a number of assumptions and estimates, and the results would change if
different methods were applied.

83
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

REINSURANCE

(DOLLARS IN THOUSANDS)

SCHEDULE IV

<TABLE>
<CAPTION>
CEDED TO ASSUMED PERCENTAGE OF
OTHER FROM OTHER NET AMOUNT ASSUMED
GROSS AMOUNT COMPANIES COMPANIES AMOUNT TO NET
-------------- ------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Life insurance in force ......... $40,221,361 $6,776,447 $2,692,822 $36,137,736 7.5%
=========== ========== ========== =========== ===
Premiums:
Individual life ................ $ 395,361 $ 4,910 $ - $ 390,452 0.0%
Group life and health .......... 1,761 231 2,389 3,918 61.0
Annuity ........................ 822,149 - - 822,149 0.0
----------- ---------- ---------- ----------- ----
$ 1,219,271 $ 5,141 $ 2,389 $ 1,216,519 0.2%
=========== ========== ========== =========== ====
YEAR ENDED DECEMBER 31, 1996
Life insurance in force ......... $28,168,880 $4,463,986 $2,210,601 $25,915,495 8.5%
=========== ========== ========== =========== ====
Premiums:
Individual life ................ $ 292,239 $ 2,863 $ - $ 289,376 0.0%
Group life and health .......... 2,393 242 2,063 4,214 49.0
Annuity ........................ 740,125 - - 740,125 0.0
----------- ---------- ---------- ----------- ----
$ 1,034,757 $ 3,105 $ 2,063 $ 1,033,715 0.2%
=========== ========== ========== =========== ====
YEAR ENDED DECEMBER 31, 1995
Life insurance in force ......... $19,438,203 $1,365,119 $1,619,378 $19,692,462 8.2%
=========== ========== ========== =========== ====
Premiums:
Individual life ................ $ 189,870 $ 1,727 $ - $ 188,143 0.0%
Group life ..................... 2,153 357 1,569 3,365 46.6
Annuity ........................ 378,390 - - 378,390 0.0
----------- ---------- ---------- ----------- ----
$ 570,413 $ 2,084 $ 1,569 $ 569,898 0.2%
=========== ========== ========== =========== ====
</TABLE>

<PAGE>

PART II.
OTHER INFORMATION

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.

REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A)

Western Reserve Life Assurance Co. of Ohio ("Western Reserve") hereby
represents that the fees and charges deducted under the Contracts, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Western Reserve.

STATEMENT WITH RESPECT TO INDEMNIFICATION

Provisions exist under the Ohio General Corporation Law, the Second
Amended Articles of Incorporation of Western Reserve and the Amended Code of
Regulations of Western Reserve whereby Western Reserve may indemnify certain
persons against certain payments incurred by such persons. The following
excerpts contain the substance of these provisions.

OHIO GENERAL CORPORATION LAW

SECTION 1701.13 AUTHORITY OF CORPORATION.

(E)(1) A corporation may indemnify or agree 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, trustee, officer, employee, or agent of another
corporation (including a subsidiary of this corporation), domestic or foreign,
nonprofit or for profit, 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 contendre or its equivalent, shall not, of itself create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.

(2) A corporation may indemnify or agree 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 or suit by or in the right of the corporation to
procure a judgment in its favor 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, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense or

II-1

<PAGE>

settlement of such action or suit 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, except that no indemnification shall be made in respect of any of
the following:

(a) Any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent that the court of
common pleas, or the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court of common pleas or such other court
shall deem proper;

(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee, officer, employee, or agent has
been successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in divisions (E)(1) and (2) of this section, or in
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(4) Any indemnification under divisions (E)(1) and (2) of this section,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in divisions (E)(1) and (2)
of this section. Such determination shall be made as follows:

(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or threatened with
any such action, suit, or proceeding;

(b) If the quorum described in division (E)(4)(a) of this section is
not obtainable or if a majority vote of a quorum of disinterested directors so
directs, in a written opinion by independent legal counsel other than an
attorney, or a firm having associated with it an attorney, who has been retained
by or who has performed services for the corporation, or any person to be
indemnified within the past five years;

(d) By the court of common pleas or the court in which such action,
suit, or proceeding was brought.

Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.

(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit or proceeding referred to in divisions (E)(1) and (2)
of this section, the articles or the regulations of a corporation state by
specific reference to this division that the provisions of this division do not
apply to the corporation and unless the only liability asserted against a
director in an action, suit, or proceeding referred to in divisions (E)(1) and
(2) of this section is pursuant to section 1701.95 of the Revised Code,
expenses, including attorney's fees, incurred by a director in defending the
action, suit, or proceeding shall be paid by the corporation as they are
incurred, in advance of the final disposition

II-2

<PAGE>

of the action, suit, or proceeding upon receipt of an undertaking by or on
behalf of the director in which he agrees to do both of the following:

(i) Repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to act
involved an act or omission undertaken with deliberate intent to cause injury to
the corporation or undertaken with reckless disregard for the best interests of
the corporation;

(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding.

(b) Expenses, including attorneys' fees incurred by a director,
trustee, officer, employee, or agent in defending any action, suit, or
proceeding referred to in divisions (E)(1) and (2) of this section, may be paid
by the corporation as they are incurred, in advance of the final disposition of
the action, suit, or proceeding as authorized by the directors in the specific
case upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, if it ultimately is determined
that he is entitled to be indemnified by the corporation.

(6) The indemnification authorized by this section shall not be exclusive
of, and shall be in addition to, any other rights granted to those seeking
indemnification under the articles or the regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.

(7) A corporation may purchase and maintain insurance or furnish similar
protection, including but not limited to trust funds, letters of credit, or
self-insurance on behalf of or for any person who 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, trustee, officer, employee, or agent of another
corporation, domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section. Insurance may be purchased from or maintained
with a person in which the corporation has a financial interest.

(8) The authority of a corporation to indemnify persons pursuant to
divisions (E)(1) and (2) of this section does not limit the payment of expenses
as they are incurred, indemnification, insurance, or other protection that may
be provided pursuant to divisions (E)(5), (6), and (7) of this section.
Divisions (E)(1) and (2) of this section do not create any obligation to repay
or return payments made by the corporation pursuant to divisions (E)(5), (6), or
(7).

(9) As used in this division, references to "corporation" include all
constituent corporations in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee, or
agent of such a constituent corporation, or is or was serving at the request of
such constituent corporation as a director, trustee, officer, employee or agent
of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, shall stand in the same
position under this section with respect to the new or surviving corporation as
he would if he had served the new or surviving corporation in the same capacity.

SECOND AMENDED ARTICLES OF INCORPORATION OF WESTERN RESERVE

ARTICLE EIGHTH

EIGHTH: (1) The corporation may indemnify or agree 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

II-3

<PAGE>

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, trustee,
officer, employee, or agent of another corporation (including a subsidiary of
this corporation), domestic or foreign, nonprofit or for profit, 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 contendre or its
equivalent, shall not, of itself create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.

(2) The corporation may indemnify or agree 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 or suit by or in the right of the corporation to procure a
judgment in its favor 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, trustee, officer, employee, or agent
of another corporation (including a subsidiary of this corporation), domestic or
foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit 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, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless, and only to
the extent that the court of common pleas, or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court of
common pleas or such other court shall deem proper.

(3) To the extent that a director, trustee, officer, employee, or agent has
been successful on the merits or otherwise in defense of any action, suit, or
proceeding referred to in sections (1) and (2) of this article, or in defense of
any claim, issue, or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
therewith.

(4) Any indemnification under sections (1) and (2) of this article, unless
ordered by a court, shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in sections (1) and (2) of
this article. Such determination shall be made (a) by a majority vote of a
quorum consisting of directors of the indemnifying corporation who were not and
are not parties to or threatened with any such action, suit, or proceeding, or
(b) if such a quorum is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by independent legal
counsel other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the corporation, or
any person to be indemnified within the past five years, or (c) by the
shareholders, or (d) by the court of common pleas or the court in which such
action, suit, or proceeding was brought. Any determination made by the
disinterested directors under section (4)(a) or by independent legal counsel
under section (4)(b) of this article shall be promptly communicated to the
person who threatened or brought the action or suit by or in the right of the
corporation under section (2) of this article, and within ten days after receipt
of such notification, such person shall have the right to petition the court of
common pleas or the court in which such action or suit was brought to review the
reasonableness of such determination.

II-4

<PAGE>

(5) Expenses, including attorneys' fees incurred in defending any action,
suit, or proceeding referred to in sections (1) and (2) of this article, may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding as authorized by the directors in the specific case upon
receipt of a written undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as
authorized in this article. If a majority vote of a quorum of disinterested
directors so directs by resolution, said written undertaking need not be
submitted to the corporation. Such a determination that a written undertaking
need not be submitted to the corporation shall in no way affect the entitlement
of indemnification as authorized by this article.

(6) The indemnification provided by this article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under the articles or the regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.

(7) The Corporation may purchase and maintain insurance on behalf of any
person who 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, trustee,
officer, employee, or agent of another corporation (including a subsidiary of
this corporation), domestic or foreign, nonprofit or for profit, partnership,
joint venture, trust, or other enterprise against any liability asserted against
him and incurred by him in any such capacity or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under this section.

(8) As used in this section, references to "the corporation" include all
constituent corporations in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee, or
agent of such a constituent corporation, or is or was serving at the request of
such constituent corporation as a director, trustee, officer, employee or agent
of another corporation (including a subsidiary of this corporation), domestic or
foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise shall stand in the same position under this article with respect to
the new or surviving corporation as he would if he had served the new or
surviving corporation in the same capacity.

(9) The foregoing provisions of this article do not apply to any proceeding
against any trustee, investment manager or other fiduciary of an employee
benefit plan in such person's capacity as such, even though such person may also
be an agent of this corporation. The corporation may indemnify such named
fiduciaries of its employee benefit plans against all costs and expenses,
judgments, fines, settlements or other amounts actually and reasonably incurred
by or imposed upon said named fiduciary in connection with or arising out of any
claim, demand, action, suit or proceeding in which the named fiduciary may be
made a party by reason of being or having been a named fiduciary, to the same
extent it indemnifies an agent of the corporation. To the extent that the
corporation does not have the direct legal power to indemnify, the corporation
may contract with the named fiduciaries of its employee benefit plans to
indemnify them to the same extent as noted above. The corporation may purchase
and maintain insurance on behalf of such named fiduciary covering any liability
to the same extent that it contracts to indemnify.

AMENDED CODE OF REGULATIONS OF WESTERN RESERVE

ARTICLE V

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Each Director, officer and member of a committee of this Corporation,
and any person who may have served at the request of this Corporation as a
Director, officer or member of a committee of

II-5

<PAGE>

any other corporation in which this Corporation owns shares of capital stock or
of which this Corporation is a creditor (and his heirs, executors and
administrators) shall be indemnified by the Corporation against all expenses,
costs, judgments, decrees, fines or penalties as provided by, and to the extent
allowed by, Article Eighth of the Corporation's Articles of Incorporation, as
amended.

RULE 484 UNDERTAKING

Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Act") 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.

CONTENTS OF REGISTRATION STATEMENT

This registration statement comprises the following papers and documents:

The facing sheet

The Prospectus, consisting of 85 pages

The undertaking to file reports
Representation pursuant to section 26(e)(2)(A)
The statement with respect to indemnification The Rule 484 undertaking
The signatures

Written consent of the following persons:

(a) Alan Yaeger
(b) Thomas E. Pierpan, Esq.
(c) Sutherland, Asbill & Brennan LLP
(d) Ernst & Young LLP
(e) Price Waterhouse LLP

The following exhibits:

1. The following exhibits correspond to those required by paragraph A to the
instructions as to exhibits in Form N-8B-2:

A. (1) Resolution of the Board of Directors of Western Reserve
establishing the Serie Account (4)

(2) Not Applicable
(3) Distribution of Policies:

(a) Form of Master Service and Distribution Compliance
Agreement (3)
(b) Form of Broker/Dealer Supervisory and Service Agreement (3)

(4) Not Applicable
(5) (a) Specimen Flexible Premium Variable Life Insurance Policy
(b) Joint Insured Term Rider

II-6

<PAGE>

(e) Terminal Illness Accelerated Death Benefit Rider
(Form Nos. ACCDB-10/94, ACCDB-CT-10/94, ACCDBIN-10/94,
ACCDB-10/94MN, ACCDBMS-01/95, ACCDBSC-02/95,
ACCDBIL-10/94) (4)

(6) (a) Second Amended Articles of Incorporation of Western Reserve
(3)
(b) Amended Code of Regulations (By-Laws) of Western Reserve
(3)

(7) Not Applicable

(8) (a) Investment Advisory Agreement with the Fund (1)
(b) Sub-Advisory Agreements (1)

(9) Not Applicable
(10) Application for Flexible Premium Variable Life Insurance
Policy (4)
(11) Memorandum describing issuance, transfer and redemption
procedures

2. See Exhibit 1.A.

3. Opinion of Counsel as to the legality of the securities being registered

4. No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I

5. Not Applicable

6. Opinion and consent of Alan Yaeger as to actuarial matters pertaining to
the securities being registered

7. Consent of Thomas E. Pierpan, Esq.

8. Consent of Sutherland, Asbill & Brennan LLP

9. Consent of Ernst & Young LLP

10. Consent of Price Waterhouse LLP

11.(a) Powers of Attorney (4)
(b) Power of Attorney - James R. Walker (2)

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

(1) This exhibit was previously filed on Post Effective Amendment No. 25 to
Form N-1A Registration Statement (File No. 33-507) dated October 17, 1997
and is incorporated herein by reference.
(2) This exhibit was previously filed on Post-Effective Amendment No. 13 to
Form S-6 Registration Statement dated December 24, 1996 (File No. 33-31140)
and is incorporated herein by reference.
(3) This exhibit was previously filed on Post Effective Amendment No. 11 to
Form N-4 Registration Statement dated April 20, 1998 (File No. 33-49556)
and is incorporated herein by reference.
(4) This exhibit was previously filed on Post-Effective Amendment No. 16 to
Form S-6 Registration Statement dated April 21, 1998 (File No. 33-31140)
and is incorporated herein by reference.

II-7
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant, WRL Series Life Account, certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 11 to its Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Largo, County of Pinellas, Florida on this 20th day
of April, 1998.

(SEAL) WRL SERIES LIFE ACCOUNT
-----------------------
Registrant

WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
-----------------------
Depositor

ATTEST:

/s/ THOMAS E. PIERPAN By: /s/ JOHN R. KENNEY
- --------------------- ----------------------
Thomas E. Pierpan John R. Kenney
Vice President, Assistant Secretary Chairman of the Board,
and Associate General Counsel Chief Executive Officer
and President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 11 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.

SIGNATURE AND TITLE DATE
------------------- ----

/s/ JOHN R. KENNEY April 20, 1998
- ------------------------
John R. Kenney, Chairman of the
Board, Chief Executive Officer
and President

/s/ ALLAN J. HAMILTON April 20, 1998
- ------------------------
Allan J. Hamilton, Vice President,
Treasurer and Controller

/s/ ALAN M. YAEGER April 20, 1998
- ------------------------
Alan M. Yaeger, Executive Vice
President, Actuary & Chief Financial Officer*

- ---------------
*Principal Financial Officer

<PAGE>

/s/ PATRICK S. BAIRD April 20, 1998
- ------------------------
Patrick S. Baird, Director ***/

/s/ LYMAN H. TREADWAY April 20, 1998
- ------------------------
Lyman H. Treadway ***/

/s/ JACK E. ZIMMERMAN April 20, 1998
- ------------------------
Jack E. Zimmerman, Director ***/

/s/ JAMES R. WALKER April 20, 1998
- -------------------------
James R. Walker, Director ***/

***/ /s/ THOMAS E. PIERPAN
- ---- ---------------------
Signed by: Thomas E. Pierpan
as Attorney-in-fact

EXHIBIT 99.A7
Exhibit 1(A)(5)(a)

Specimen Flexible Premium Variable

Life Insurance Policy

<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
(A STOCK COMPANY)

Home Office: Columbus, Ohio
Administrative Office: Clearwater, Florida

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

IN THIS POLICY Western Reserve Life Assurance Co. Of Ohio will be referred to as
WE, OUR or US.

- -------------------------------------------------------------------------------
WE AGREE to pay the Death Benefit Proceeds to the Beneficiary upon the death of
the Surviving Insured when we receive proof that both Joint Insureds died while
this Policy is in force. THE AMOUNT OF THE DEATH BENEFIT PROCEEDS WILL INCREASE
OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS IN THE
SEPARATE ACCOUNT AND ON THE DEATH BENEFIT OPTION SELECTED AS DESCRIBED IN THE
DEATH BENEFIT PROVISIONS.

WE AGREE to pay the Net Surrender Value to the Owner if at least one of the
Joint Insureds is alive on the Maturity Date and this Policy is in force. CASH
VALUES WILL INCREASE OR DECREASE IN ACCORDANCE WITH THE POLICY VALUE PROVISIONS
AND THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS IN THE SEPARATE ACCOUNT. CASH
VALUES ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.

THE PROVISIONS on the following pages are part of this Policy.

IN WITNESS WHEREOF, we have signed this Policy at our Office in Clearwater,
Florida as of the Policy Date

/s/ WILLIAM H. GEIGER JOHN R.KENNEY
Secretary President

- ------------------------------------------------------------------------------
RIGHT TO EXAMINE POLICY - The Owner may cancel this Policy by returning it to us
at P.O. Box 5068, Clearwater, Florida 34618 or to the representative through
whom it was purchased within the later of: (a) 45 days after the application was
signed; (b) 10 days after receipt of this Policy; or (c) 10 days after we mail
or deliver the Notice of Withdrawal Right. If the Policy is returned within this
period, it will be void from the beginning and a refund will be made to the
Owner. The refund will equal the sum of:

1. The difference between the premiums paid and the amounts allocated to any
Accounts under the Policy; plus
2. The total amount of monthly deductions made and any other charges imposed
on amounts allocated to the Accounts; plus
3. The value of amounts allocated to the Accounts on the date we or our agent
receive the returned Policy.

If state law prohibits the calculation above, the refund will be the total of
all premiums paid for this Policy.

- ------------------------------------------------------------------------------
Joint Survivorship Flexible Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Surviving Insured
Prior to Maturity Date
Net Surrender Value Payable at Maturity Date
Flexible Premiums Payable During Lifetime of Surviving Insured
Until the Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results

<PAGE>

POLICY GUIDE

POLICY SCHEDULE......................................................... 3

RIDER INFORMATION....................................................... 4

TABLE OF GUARANTEED RATES............................................... 4A

DEFINITIONS............................................................. 5

GENERAL PROVISIONS...................................................... 6

DEATH BENEFIT PROVISIONS................................................ 8

SEPARATE ACCOUNT PROVISIONS............................................. 9

PREMIUM PROVISIONS...................................................... 11

POLICY VALUE PROVISIONS................................................. 12

POLICY SPLIT OPTION..................................................... 15

SETTLEMENT OPTIONS...................................................... 16

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

ENDORSEMENTS

Page 2

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CLEARWATER, FLORIDA

POLICY SCHEDULE

<S> <C> <C> <C>
JOINT INSUREDS: POLICY NUMBER: 01-12345678
JOHN DOE
JANE DOE

SPECIFIED AMOUNT: $100,000.00 POLICY DATE: DECEMBER 30, 1994

OPTION TYPE: A RECORD DATE: MARCH 28, 1995

PLANNED PREMIUM: $2,000.00 NO LAPSE DATE: DECEMBER 30, 2020

PAYMENT FREQUENCY: ANNUALLY MATURITY DATE: DECEMBER 30, 2055

INITIAL PREMIUM: $2,000.00

MINIMUM MONTHLY
GUARANTEE PREMIUM: $16.30 YRS 1+

MINIMUM SPECIFIED AMOUNT $100,000

SEPARATE ACCOUNT PROVISIONS

SEPARATE ACCOUNT: WRL SERIES LIFE ACCOUNT

MORTALITY AND EXPENSE RISK CHARGE: .00002455

POLICY VALUE PROVISIONS

NET PREMIUM FACTOR

POLICY YEARS 1-10 94.00%
POLICY YEARS 11+ 97.50%

MONTHLY POLICY CHARGE

INITIAL: $ 5.00
GUARANTEED: $10.00

MONTHLY DEATH BENEFIT GUARANTEE CHARGE: $.04 PER $1,000 SPECIFIED AMOUNT

GUIDELINE PREMIUM: $968.05

DEFERRED SURRENDER CHARGES

ISSUE CHARGE: $5.00 PER $1,000 SPECIFIED AMOUNT

INITIAL PERCENTAGE: 26.5%

EXCESS PERCENTAGE: 4.2%

SURRENDER CHARGE PERCENTAGE

END OF POLICY YEAR* AT ISSUE 1-10 11 12 13 14 15 16+
PERCENTAGE 100% 100% 80% 60% 40% 20% 0% 0%
</TABLE>

* THE CHARGE ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE INTERPOLATED
BETWEEN THE TWO END OF YEAR CHARGES.

Page 3

<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

CLEARWATER, FLORIDA

POLICY NUMBER: 01-12345678

RIDER INFORMATION

NONE

Page 4

<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

CLEARWATER, FLORIDA

POLICY NUMBER: 01-12345678

TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES

GUARANTEED RATE BASIS FOR INITIAL SPECIFIED AMOUNT ON JOINT INSUREDS
COMMISSIONERS 1980 STANDARD ORDINARY MORTALITY TABLE

JOHN DOE
MALE AGE39 NONSMOKER STANDARD

JANE DOE

FEMALE AGE40 NONSMOKER STANDARD

THE ANNUAL RATE REFLECTS THE MAXIMUM COST OF INSURANCE PER $1,000. THE MONTHLY
COST OF INSURANCE CALCULATIONS WILL USE ONE-TWELFTH OF THESE RATES.

LICY YEAR ANNUAL RATE POLICY YEAR ANNUAL RATE
1 .00444 31 9.87996
2 .01476 32 11.64876
3 .02736 33 13.91700
4 .04260 34 16.44756
5 .06084 35 19.64808
6 .08220 36 23.44668
7 .10800 37 27.82332
8 .13848 38 32.78028
9 .17472 39 38.31960
10 .21708 40 44.49156
11 .26796 41 51.46224
12 .32748 42 59.44236
13 .39972 43 68.64240
14 .48792 44 79.26852
15 .59232 45 91.28688
16 .71784 46 104.62836
17 .86532 47 119.05536
18 1.03740 48 134.46900
19 1.23312 49 150.67020
20 1.45980 50 167.61948
21 1.73004 51 185.30844
22 2.05284 52 203.95332
23 2.44560 53 223.92540
24 2.93100 54 245.97180
25 3.52668 55 271.77768
26 4.23840 56 305.56296
27 5.07888 57 355.42488
28 6.04332 58 436.66152
29 7.14264 59 577.07100
30 8.40312 60 813.18444
61 999.99996

Page 4A

<PAGE>

DEFINITIONS

ACCOUNTS. Allocation options including the Fixed Account and the Subaccounts of
the Separate Account.

ANNIVERSARY. The same day and month as the Policy Date for each succeeding year
the Policy remains in force.

BENEFICIARY. The person or persons specified by the Owner to receive the Death
Benefit Proceeds upon the death of the Surviving Insured.

DEATH BENEFIT PROCEEDS. The amount payable upon the death of the Surviving
Insured in accordance with the Death Benefit Provisions of this Policy.

FIXED ACCOUNT. An allocation option other than the Separate Account.

INITIAL PREMIUM. The amount which must be paid before coverage begins. The
amount is shown on the Policy Schedule Page.

JOINT INSUREDS. The persons whose lives are insured under this Policy as shown
on the Policy Schedule Page.

MATURITY DATE. The date when coverage under the Policy will terminate if the
Policy is in force.

MONTHIVERSARY. The day of each month coinciding with the Policy Date. If there
is no day in a calendar month which coincides with the Policy Date, the
Monthiversary will be the first day of the next month.

NET SURRENDER VALUE. The amount payable upon surrender in accordance with the
Policy Value Provisions of this Policy.

OFFICE. Refers to our Administrative Office located in Clearwater, Florida.

POLICY DATE. The date coverage is effective and monthly deductions commence
under the Policy. Policy months, years and anniversaries are measured from the
Policy Date, as shown on the Policy Schedule Page.

RECORD DATE. The date the Policy is recorded on our books as an in force Policy.
The Record Date is shown on the Policy Schedule Page.

RIDER. Any attachment to this Policy which provides additional coverages or
benefits.

SEC. The Securities and Exchange Commission.

SEPARATE ACCOUNT. A separate investment account shown on the Policy Schedule
Page which is composed of several Subaccounts established to receive and invest
net premiums under the Policy.

SUBACCOUNT. A sub-division of the Separate Account. Each Subaccount invests
exclusively in the shares of a specified series fund portfolio.

SURVIVING INSURED. The Joint Insured who remains alive after the other Joint
Insured has died.

VALUATION DATE. Any day we are required by law to value the assets of the
Separate Account.

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VALUATION PERIOD. The period commencing at the end of one Valuation Date and
continuing to the end of the next succeeding Valuation Date.

WE, OUR, US. Western Reserve Life Assurance Co. of Ohio.

WRITTEN NOTICE. Written Notice means a notice by the Owner to us requesting or
exercising a right of the Owner as provided in the Policy provisions. In order
for a notice to be considered a Written Notice, it must: be in writing, signed
by the Owner; be in a form acceptable to us; and contain the information and
documentation, as determined in our sole discretion, necessary for us to take
the action requested or for the Owner to exercise the right specified. A Written
Notice will not be considered complete until all necessary supporting
documentation required or requested by us has been received by us at our
Administrative Office.

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GENERAL PROVISIONS

THE POLICY. This Policy is issued in consideration of the attached application
and payment of the Initial Premium. This Policy, the attached application and
any additional applications at the time of reinstatement constitute the entire
contract. All statements in these applications, in the absence of fraud, will be
deemed representations and not warranties. No statement can be used to void this
Policy or be used in defense of a claim unless it is contained in the written
application. No policy provision can be waived or changed except by endorsement.
Such endorsement must be signed by our President or Secretary.

OWNERSHIP. This Policy belongs to the Owner. The Owner, as named in the
application or subsequently changed, may exercise all rights under this Policy
while either or both of the Joint Insureds are living. If two Owners are named,
this Policy will be owned jointly and the consent of each Owner will be required
to exercise ownership rights under the Policy.

We will not be bound by any change in the Ownership designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice is accepted by us. If we request, this Policy must be returned to our
Office for endorsement.

BENEFICIARY. The Beneficiary, as named in the application or subsequently
changed, will receive the benefits payable upon the death of the Surviving
Insured. If the Beneficiary dies before the Surviving Insured, the Contingent
Beneficiary, if named, becomes the Beneficiary. If no Beneficiary survives the
Surviving Insured, the benefits payable upon the death of the Surviving Insured
will be paid to the Owner or the Owner's estate.

We will not be bound by any change in the Beneficiary designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice was signed; however, no change will apply to any payment we made before
the Written Notice is received. If we request, this Policy must be returned to
our Office for endorsement.

ASSIGNMENT. This Policy may be assigned. We will not be bound by any assignment
unless made by Written Notice. The assignment will be effective on the date the
Written Notice is received at our Office and accepted by us. We assume no
responsibility for the validity of any assignment.

AGE AND SEX. If either Joint Insured's date of birth or sex is not correctly
stated, the death benefit will be adjusted. The death benefit will be adjusted
based on what the cost of insurance charge for the most recent monthly deduction
would have purchased based on the correct date of birth and sex.

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INCONTESTABILITY. This Policy shall be incontestable after it has been in force,
while both Joint Insureds are still alive, for two years from the Policy Date.
At the end of the second policy year, we will mail the Owner a notice requesting
to know if either Joint Insured has died. Failure to tell us of the death of a
Joint Insured will not avoid a contest, if we have basis to do so, even if the
Policy is still in force.

If this Policy is reinstated, a new two year contestability period (apart from
any remaining contestability period) shall apply from the date of the
application for reinstatement and will apply only to statements made in the
application for reinstatement.

SUICIDE. If either Joint Insured dies by suicide, while sane or insane, within
two years from the Policy Date or two years from the effective date of any
reinstatement of this Policy, this Policy shall terminate and our total
liability, including all Riders attached to this Policy, will be limited to the
total premiums paid within such two year period less any loan and any prior
withdrawals during such period. In that event, such proceeds will be payable to
the Owner, if surviving, otherwise to the Owner's estate. No other death benefit
will be payable.

ANNUAL REPORT. We will send a report to the Owner at least once each year. It
will show for the Policy:

1. The current cash value; 4. Any current policy loans;
2. The current Net Surrender Value; 5. Activity since the last report;
3. The current death benefit; 6. Projected values.

Additional activity within each Subaccount showing investment experience will
also be provided.

TERMINATION. This Policy will terminate on the earliest of:

1. The Maturity Date; 3. The end of the grace period;
2. The date of the Surviving Insured's death; 4. The date of surrender.

POLICY PAYMENT. All proceeds to be paid upon termination will be paid in one sum
unless otherwise elected under the Settlement Options section of this Policy.

All payments and transfers from the Subaccounts will be processed as provided in
this Policy unless one of the following situations exists:

1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares an emergency; or
3. The SEC allows us to defer payments to protect our policyowners.

We reserve the right to defer the payment of any Fixed Account values for the
period permitted by law, but not for more than 6 months.

CONVERSION RIGHTS. At any time upon Written Notice within the first 2 policy
years, the Owner may elect to transfer all Subaccount values to the Fixed
Account without a transfer charge.

PROTECTION OF PROCEEDS. Unless the Owner directs by filing Written Notice, no
Beneficiary may assign any payments under this Policy before the same are due.
To the extent permitted by law, no payments under this Policy will be subject to
the claims of creditors of any Beneficiary.

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DEATH BENEFIT PROVISIONS

DEATH BENEFIT. The death benefit is based upon the Specified Amount, Option Type
and the limitation percentage applicable at time of death.

SPECIFIED AMOUNT. The Specified Amount is as shown on the Policy Schedule Page,
unless changed in accordance with the Changes section or reduced by a cash
withdrawal.

OPTION TYPE. The Option Type is as shown on the Policy Schedule Page, unless
changed in accordance with the Changes
section of this provision.

If Option Type A is in effect, the death benefit is the greater of:

1. the Specified Amount; or
2. the limitation percentage times the cash value of this Policy on the date
of the Surviving Insured's death.

If Option Type B is in effect, the death benefit is the greater of:

1. the Specified Amount plus the cash value of this Policy on the date of the
Surviving Insured's death; or
2. the limitation percentage times the cash value of this Policy on the date
of the Surviving Insured's death.

LIMITATION PERCENTAGE. The limitation percentage is a percentage based on
attained age of the younger Joint Insured at the beginning of the policy year
equal to:

Attained Age Limitation Percentage
40 and under 250%
41 through 45 250% minus 7% for each age over age 40
46 through 50 215% minus 6% for each age over age 45
51 through 55 185% minus 7% for each age over age 50
56 through 60 150% minus 4% for each age over age 55
61 through 65 130% minus 2% for each age over age 60
66 through 70 120% minus 1% for each age over age 65
71 through 75 115% minus 2% for each age over age 70
76 through 90 105%
91 through 95 105% minus 1% for each age over age 90
96 and older 100%

CHANGES. The Owner may change the Option Type or decrease the Specified Amount
after the third policy year by Written Notice. Either one change or one decrease
may be allowed within each policy year. The change will be effective on the
first Monthiversary on or next following the day we receive the Written Notice.
No change in the Option Type will be allowed if the resulting Specified Amount
would be less than the Minimum Specified Amount shown on the Policy Schedule
Page. A change in the Option Type will change the Specified Amount as follows:

1. If the change is from Option Type A to Option Type B, the Specified Amount
after such change will be equal to: (a) the Specified Amount prior to such
change; minus (b) the cash value on the date of change.

2. If the change is from Option Type B to Option Type A, the Specified Amount
after such change will be equal to: (a) the Specified Amount prior to such
change; plus (b) the cash value on the date of change.

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We reserve the right to limit any decrease in the Specified Amount to no more
than 20% of the then current Specified Amount. Any decrease will become
effective on the first Monthiversary on or next following the day we receive the
request. No decrease will be allowed if: (a) the Specified Amount after any
requested decrease would be less than the Minimum Specified Amount shown on the
Policy Schedule Page; or (b) the requested decrease would force a cash
withdrawal in order to maintain compliance with the definition of a life
insurance contract as defined by the United States Internal Revenue Code and
applicable regulations.

DEATH BENEFIT PROCEEDS. The Death Benefit Proceeds is the amount payable by us
under this Policy provided this Policy has not terminated prior to the Surviving
Insured's death. Except as provided in the Suicide section of the General
Provisions, the Death Benefit Proceeds will be equal to:

1. The death benefit; minus
2. Any monthly deductions due during the grace period; minus
3. Any outstanding policy loan; plus
4. Any unearned loan interest.

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SEPARATE ACCOUNT PROVISIONS

THE SEPARATE ACCOUNT. The variable benefits under this Policy are provided
through the Separate Account as shown on the Policy Schedule Page. The assets of
the Separate Account are our property. Assets equal to the reserve and other
contractual liabilities under all policies issued in connection with the
Separate Account will not be charged with liabilities arising out of any other
business we may conduct. If the assets of the Separate Account exceed the
liabilities arising under the policies supported by the Separate Account, then
the excess may be used to cover the liabilities of our general account. The
assets of the Separate Account shall be valued as often as any policy benefits
vary, but at least monthly.

SUBACCOUNTS. The Separate Account has various Subaccounts with different
investment objectives. We reserve the right to add or remove any Subaccount of
the Separate Account. Income, if any, and any gains or losses, realized or
unrealized, from assets in each Subaccount are credited to, or charged against,
the amount allocated to that Subaccount without regard to income, gains, or
losses in other Subaccounts. Any amount charged against the investment base for
federal or state income taxes will be deducted from that Subaccount. The assets
of each Subaccount are invested in shares of a corresponding series fund
portfolio. The value of a portfolio share is based on the value of the assets of
the portfolio determined at the end of each Valuation Period in accordance with
applicable law.

TRANSFERS. The Owner may transfer all or a portion of this Policy's value in
each Subaccount to other Subaccounts or the Fixed Account. We reserve the right
to charge a $10 fee for each transfer after the first twelve transfers during
any one policy year. This charge will be deducted from the funds transferred. A
request for a transfer must be made in a form satisfactory to us. The transfer
will ordinarily take effect on the first Valuation Date on or following the date
the request is received at our Office. We reserve the right to revoke, modify,
postpone or suspend the ability to make transfers, or any feature of the ability
to make transfers, at any time.

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. We reserve the right to
transfer assets of the Separate Account, which we determine to be associated
with the class of contracts to which this Policy belongs, to another Separate
Account. If this type of transfer is made, the term "Separate Account", as used
in this Policy, shall then mean the Separate Account to which the assets were
transferred. We also reserve the right to add, delete, or substitute investments
held by any Subaccount.

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We reserve the right, when permitted by law, to:

1. Deregister the Separate Account under the Investment Company Act of 1940;

2. Manage the Separate Account under the direction of a committee at any time;

3. Restrict or eliminate any voting privileges of owners or other persons who
have voting privileges as to the Separate Account;

4. Combine the Separate Account or any Subaccount(s) with one or more other
separate accounts or subaccounts;

5. Operate the Separate Account as a management investment company;

6. Establish additional Subaccounts to invest in either a new series of the
series fund, or in shares of another diversified, open-end registered
investment company; and

7. Fund additional classes of variable life insurance contracts through the
Separate Account.

CHANGE OF INVESTMENT OBJECTIVE. We reserve the right to change the investment
objective of a Subaccount. If required by law or regulation, an investment
objective of the Separate Account, or of a series fund portfolio designated for
a Subaccount, will not be materially changed unless a statement of the change is
filed with and approved by the appropriate insurance official of the state of
our domicile or deemed approved in accordance with such law or regulation. If
required, approval of or change of any investment objective will be filed with
the Insurance Department of the state where this Policy is delivered.

UNIT VALUE. Some of the policy values fluctuate with the investment results of
the Subaccounts. In order to determine how investment results affect the policy
values, a unit value is determined for each Subaccount. The unit value may
increase or decrease from one Valuation Period to the next. Unit values also
will vary between Subaccounts. The unit value of any Subaccount at the end of a
Valuation Period is the result of:

1. The total value of the assets held in the Subaccount. This value is
determined by multiplying the number of shares of the designated series
fund portfolio owned by the Subaccount times the net asset value per share;
minus

2. The accrued risk charge for adverse mortality and expense experience. The
daily amount of this charge is equal to the net assets of the Subaccount
multiplied by the Mortality and Expense Risk Charge shown on the Policy
Schedule Page; minus

3. The accrued amount of reserve for any taxes or other economic burden
resulting from the application of tax laws that are determined by us to be
properly attributable to the Subaccount; and the result divided by

4. The number of outstanding units in the Subaccount.

The use of the unit value in determining policy values is described in the
Policy Value Provisions.

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PREMIUM PROVISIONS

PAYMENT. The Initial Premium shown on the Policy Schedule Page must be paid on
or before the Policy Date. All premiums after the Initial Premium are payable at
our Office.

PREMIUMS. The amount and frequency of the Planned Premium are shown on the
Policy Schedule Page. The amount and frequency may be changed upon request,
subject to our approval.

While this Policy is in force, additional premiums may be paid at any time prior
to the Maturity Date. We reserve the right to limit or refund any premium if:

1. The amount is below our current minimum payment requirement; or
2. The premium would increase the death benefit by more than the amount of the
premium; or
3. The premium would disqualify this Policy as a life insurance contract as
defined by the United States Internal Revenue Code and applicable
regulations.

GRACE PERIOD. If the Net Surrender Value on any Monthiversary is not sufficient
to cover the monthly deductions on such day, we will mail a notice to the last
known address of the Owner and any assignee of record. A grace period of 61 days
after the mailing date of the notice will be allowed for the payment of
premiums. The notice will specify the minimum payment and the final date on
which such payment must be received by us to keep the Policy in force. The
Policy will remain in force during the grace period. If the amount due is not
received by us within the grace period, all coverage under the Policy and any
Riders will terminate without value at the end of the grace period.

Until the No Lapse Date shown on the Policy Schedule Page, no grace period will
begin provided the total premiums received (minus any withdrawals and minus any
outstanding loans) equals or exceeds the Minimum Monthly Guarantee Premium times
the number of months for such premium since the Policy Date, including the
current month. The Minimum Monthly Guarantee Premium is as shown on the Policy
Schedule Page unless changed due to a requested change under the Policy. Upon
such change, the Owner will be notified of the new Minimum Monthly Guarantee
Premium and the effective date for the new premium.

REINSTATEMENT. If this Policy terminates, as provided in the Grace Period
section, it may be reinstated. The reinstatement is subject to:

1. Receipt at our Office of a Written Notice. Such notice must be within 5
years after the date of termination and prior to the Maturity Date; and
2. Receipt of evidence of insurability satisfactory to us; and
3. Payment of a minimum premium sufficient to provide a net premium to cover
(a) 1 monthly deduction at the time of termination, plus (b) the next 2
monthly deductions which will become due after the time of reinstatement;
and
4. Payment of an additional amount sufficient to cover any surrender charge as
of the date of reinstatement.

The effective date of a reinstatement shall be the first Monthiversary on or
next following the day we approve the application for reinstatement. Any policy
loan as of the date of termination will not be reinstated. Any cash value equal
to the policy loan on the date of reinstatement will also not be reinstated.

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POLICY VALUE PROVISIONS

NET PREMIUM. The net premium equals the premium paid times the Net Premium
Factor shown on the Policy Schedule Page.

ALLOCATION OF NET PREMIUMS. Net premiums will be allocated to the Subaccounts of
the Separate Account and the Fixed Account on the first Valuation Date on or
following the date the premium is received at our Office; except any net premium
received prior to the Policy Date will be allocated on the first Valuation Date
on or following the Policy Date. All net premiums allocated prior to the Record
Date will be allocated to the Money Market Subaccount. On the first Valuation
Date on or following the Record Date, the values in the Money Market Subaccount
will be transferred in accordance with the Owner's allocation as shown in the
application.

Any allocation to any Account must not be less than 10%. No fractional
percentages are permitted. The allocation may be changed by the Owner. We
reserve the right to limit such change to once each year. The request for change
of allocations must be in a form satisfactory to us. The allocation change will
be effective on the date the request for change is recorded by us.

MONTHLY DEDUCTIONS. On each Monthiversary, a monthly deduction for this Policy
will be made equal to the sum of the following:

1. The Monthly Policy Charge;
2. The monthly cost of insurance for this Policy;
3. The Monthly Death Benefit Guarantee Charge;
4. Any charges for benefits provided by Riders attached to this Policy.

Deductions will be withdrawn from each Subaccount and the Fixed Account in
accordance with the Owner's current allocation. If the value of any Account is
insufficient to pay its part of the monthly deduction, the monthly deduction
will be taken on a pro rata basis from all Accounts.

MONTHLY POLICY CHARGE. Both the Initial and Guaranteed Monthly Policy Charge are
shown on the Policy Schedule Page. It is our intention to charge the Initial
Monthly Policy Charge each month; however, we reserve the right to increase the
Monthly Policy Charge up to the Guaranteed Monthly Policy Charge after the first
policy year. Any change in this charge will be applied uniformly to all policies
in effect for the same length of time.

MONTHLY COST OF INSURANCE. The monthly cost of insurance on each Monthiversary
is determined as follows:

1. Divide the death benefit on the Monthiversary by 1.0032737; and
2. Reduce the result by the cash value on the Monthiversary; and
3. Multiply (2) by the appropriate monthly cost of insurance rates.

MONTHLY COST OF INSURANCE RATES. The monthly cost of insurance rates are based
on the sex, attained age, plan of insurance and rating class of the persons
insured. Monthly cost of insurance rates may be changed by us from time to time.
A change in the cost of insurance rates will apply uniformily to all persons of
the same sex, attained age, plan of insurance and rating class and whose
policies have been in effect for the same length of time. Any increase in the
rates will not exceed those shown in the Table of Guaranteed Maximum Cost of
Insurance Rates.

MONTHLY DEATH BENEFIT GUARANTEE CHARGE. The charge is equal to the Monthly Death
Benefit Guarantee Charge as shown on the Policy Schedule Page times the initial
Specified Amount. This charge will be deducted up until the No Lapse Date. On
and after the No Lapse Date, this charge will be zero.

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SUBACCOUNT VALUE. At the end of any Valuation Period, the value of the
Subaccount is equal to the number of units that the Policy has in the
Subaccount, multiplied by the unit value of the Subaccount.

The number of units in a Subaccount is equal to:

1. The initial units purchased on the Policy Date; plus
2. Units purchased at the time additional net premiums are allocated to the
Subaccount; plus
3. Units purchased through transfers from another Subaccount or the Fixed
Account; minus
4. Those units redeemed to pay for monthly deductions as they are due; minus
5. Any units redeemed to pay for cash withdrawals; minus
6. Any units redeemed as part of a transfer to another Subaccount or the Fixed
Account.

FIXED ACCOUNT VALUE. At the end of any Valuation Period, the Fixed Account value
is equal to:

1. All net premiums allocated to the Fixed Account; plus
2. Any amounts transferred from a Subaccount to the Fixed Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as they are due; minus
5. Any amounts withdrawn from the Fixed Account to pay for cash withdrawals;
minus
6. Any amounts transferred from the Fixed Account to a Subaccount.

Interest on the Fixed Account will be compounded daily at a minimum guaranteed
effective annual interest rate of 4% per year. We may declare from time to time
various higher current interest rates. We may also apply a different current
interest rate to that part of the cash value that equals the loan reserve.

On transfers from the Fixed Account to a Subaccount, we reserve the right to
impose the following limitations:

1. Written Notice must be received by us within 30 days after a policy
anniversary.
2. The transfer will take place on the date we receive such Written Notice.
3. The maximum amount that may be transferred is the greater of (a) 25% of the
amount in the Fixed Account; or (b) the amount transferred in the prior
policy year from the Fixed Account.

We further reserve the right to defer payment of any amounts from the Fixed
Account for no longer than six months after we receive Written Notice.

CASH VALUE. At the end of any Valuation Period, the cash value of the Policy is
equal to the sum of the Subaccount values plus the Fixed Account value.

NET SURRENDER VALUE. The Net Surrender Value is the amount payable upon
surrender of this Policy. The Net Surrender Value as of any date is equal to:

1. the cash value as of such date; minus
2. any surrender charge as of such date; minus
3. any outstanding policy loan; plus
4. any unearned loan interest.

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SURRENDER CHARGE. During the first 15 policy years, a surrender charge will be
incurred upon surrender of this Policy. The charge is calculated as:
(a) x (b+c+d) where:

(a) is the Surrender Charge Percentage varying by policy year as shown on the
Policy Schedule Page;
(b) is the Issue Charge as shown on the Policy Schedule Page times the initial
Specified Amount;
(c) is the Initial Percentage as shown on the Policy Schedule Page times the
sum of all premiums paid up to the Guideline Premium as shown on the Policy
Schedule Page;
(d) is the sum of all premiums paid in excess of the first Guideline Premium
times the Excess Percentage as shown on the Policy Schedule Page.

SURRENDER. The Owner may surrender this Policy for the Net Surrender Value at
any time while the Policy is in force. Payment will usually be made within seven
days of Written Notice, subject to the Policy Payment section of the General
Provisions.

WITHDRAWALS. Cash withdrawals may be made any time after the first policy year
and while the Policy is in force. Only one withdrawal is allowed during a policy
year. The amount of a withdrawal may be limited to no less than $500 and to no
more than 10% of the Net Surrender Value. The request for a withdrawal must be
by Written Notice. A processing fee of no more than $25 will be deducted from
each withdrawal amount and the balance will be paid to the Owner.

When a withdrawal is made, the cash value shall be reduced by the amount of the
withdrawal. If the death benefit is Option Type A, the Specified Amount shall
also be reduced by the amount of the withdrawal. These reductions will result in
a reduction in the death benefit, which may be determined from the Death Benefit
section. No withdrawal will be allowed if the resulting Specified Amount would
be less than Minimum Specified Amount shown on the Policy Schedule Page.

The Accounts from which the withdrawal will be made may be specified in the
Written Notice. If no Account is specified, the withdrawal amount will be
withdrawn from each Account in accordance with the Owner's current allocation
instructions. Payment will be made within seven days of Written Notice, subject
to the Policy Payment section of the General Provisions of this Policy.

CONTINUATION OF INSURANCE. Subject to the Grace Period section of the Premium
Provisions, insurance coverage under this Policy and any benefits provided by
rider will be continued in force until the Net Surrender Value is insufficient
to cover the monthly deductions. This provision shall not continue this Policy
beyond the Maturity Date nor continue any Rider beyond the date for its
termination, as provided in the Rider.

INSUFFICIENT VALUE. If the Net Surrender Value on any Monthiversary is not
sufficient to cover the monthly deductions then due, this Policy shall terminate
subject to the Grace Period section of the Premium Provisions.

BASIS OF COMPUTATIONS. Policy values and reserves are at least equal to those
required by law. A detailed statement of the method of computation of values and
reserves has been filed with the insurance department of the state in which this
Policy was delivered.

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POLICY LOANS. After the first policy year and during the continuance of this
Policy, the Owner can borrow against the Policy an amount which is not greater
than 90% of the cash value, less any surrender charge and any outstanding policy
loan. The amount of any policy loan may be limited to no less than $500, except
as noted below.

When a loan is made, an amount equal to the loan plus interest in advance until
the next Anniversary will be withdrawn from the Accounts and transferred to the
loan reserve. The loan reserve is a portion of the Fixed Account used as
collateral for any policy loan. The Owner may specify the Account or Accounts
from which the withdrawal will be made. If no Account is specified, the
withdrawal will be made from each Account in accordance with the Owner's current
premium allocation instructions.

The loan date is the date we process a loan request. Payment will usually be
made within seven days of the date we receive a proper loan request, subject to
the Policy Payment section of the General Provisions of this Policy. This Policy
will be the sole security for the loan.

While this Policy is in force, any loan may be repaid. Any amounts received on
this Policy will be considered premiums unless clearly marked as loan
repayments.

Interest on any loan will be at the policy loan rate of 5.2%, payable annually
in advance. Interest is due at each Anniversary. Interest not paid when due will
be added to the loan and will bear interest at the same rate.

At each Anniversary, we will compare the amount of the outstanding loan
(including interest in advance until the next Anniversary, if not paid) to the
amount in the loan reserve. We will also make this comparison anytime the Owner
repays all or part of the loan. At each such time, if the amount of the
outstanding loan exceeds the amount in the loan reserve, we will withdraw the
difference from the Accounts and transfer it to the loan reserve, in the same
fashion as when a loan is made. If the amount in the loan reserve exceeds the
amount of the outstanding loan, we will withdraw the difference from the loan
reserve and transfer it to the Accounts in accordance with the Owner's current
allocation instructions. However, we reserve the right to require the transfer
to the Fixed Account.

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POLICY SPLIT OPTION

SPLIT OPTION. Subject to our evidence of insurability requirements, the Owner
may request to split this Policy, not including any Riders, and purchase two
permanent individual fixed account life insurance policies offered by us at the
time of the request; one on the life of each Joint Insured. The Owner may
request this Split Option by notifying us at our Office in writing within 90
days following either:

1. The later of the enactment or the effective date of a change in the Federal
estate tax laws that would reduce or eliminate the unlimited marital
deduction; or
2. The date of entry of a final decree of divorce with respect to the Joint
Insureds; or
3. Written confirmation of a dissolution of a business partnership of which
the partners are the Joint Insureds.

If more than one person owns this Policy, each Owner must agree to the split.

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SPECIFIED AMOUNT. The initial specified amount for each new policy cannot be
greater than 50% of this Policy's Specified Amount, not including the face
amount of any Riders.

CASH VALUE. Cash value and indebtedness under this Policy will be allocated
equally to each of the new policies. If one Joint Insured does not meet our
insurability requirements we will pay the Owner one half of this Policy's Net
Surrender Value and issue only the policy covering that Joint Insured who meets
our insurability requirements or; the Owner may elect to keep this Policy in
force on both Joint Insureds and no new policies will be issued.

ISSUE LIMITS/PREMIUM RATE CLASSIFICATION. The new policies will be subject to
our minimum and maximum specified amounts and issue ages for the plan of
insurance selected.

If one of the Joint Insureds is older than the new policy's maximum issue age at
the time the split option is requested, our approval must be obtained to
exercise this split option.

PREMIUMS. The premiums for the new policies will be based on each Joint
Insured's attained age and premium rate class as determined by current evidence
of insurability. Premiums are payable as of the policy dates for each new
policy.

POLICY DATE. The policy date for each new policy will be the Monthiversary
following notification to us to execute this split option.

OWNER/BENEFICIARY. The owner and beneficiary for the new policies will be those
named in this Policy, unless otherwise specified.

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

SETTLEMENT OPTIONS

EFFECTIVE DATE AND FIRST PAYMENT DUE. The effective date of a settlement option
will be either the date of surrender or the date of death of the Surviving
Insured. The first payment due will be on the effective date of the settlement
option.

BETTERMENT OF MONTHLY ANNUITY. The payee will receive the greater of:

1. The income rate guaranteed in this Policy; or
2. The income rates in effect for us at the effective date of the settlement
option.

AVAILABILITY. If the payee is not a natural person, a settlement option is only
available with our permission. No
settlement option is available if:

1. The payee is an assignee; or 2. The periodic payment is less than $20.

AGE. Age, when required, means age nearest birthday on the effective date of the
option. We will furnish rates for other ages and for two males or two females
upon request.

PROOF OF AGE. Prior to making the first payment under this Policy, we reserve
the right to require satisfactory evidence of the birthdate and sex of any
payee. If required by law to ignore differences in sex of any payee, annuity
payments will be determined using unisex rates.

Page 16

<PAGE>

PROOF OF SURVIVAL. Prior to making any payment under this Policy, we reserve the
right to require satisfactory evidence that any payee is alive on the due date
of such payment.

INTEREST AND MORTALITY. All settlement options are based on a guaranteed
interest rate of 3%. Mortality is based on the "1983 Table a" mortality table
with projection. Gender based mortality tables will be used unless prohibited by
law.

AMOUNT OF MONTHLY ANNUITY PAYMENT. The amount of each monthly annuity payment
will be determined by multiplying:

1. The appropriate rate based on the guaranteed interest rate and, for Options
B and C, the mortality table for the payments; times

2. The proceeds as of the effective date of the settlement option.

OPTIONS. The following options are available for payment of monthly annuity
payments. The rates shown are the guaranteed rates for each $1,000 of proceeds
at selected ages. Any guaranteed rates not shown for the options below will be
available upon request. Higher current rates may be available as of the
effective date of the settlement option.

Option A - Fixed Period. The proceeds will be paid in equal installments. The
installments will be paid over a fixed period determined from the following
table:

FIXED PERIOD
(IN MONTHS) RATE
------------ -----
60 17.91
120 9.61
180 6.87
240 5.51

Option B - Life Income. The proceeds will be paid in equal installments
determined from the following table. Such installments are payable:

1. during the payee's lifetime only (Life Annuity); or
2. during a 10 Year fixed period certain and for the payee's remaining
lifetime (Certain Period); or
3. until the sum of installments paid equals the proceeds applied and for the
payee's remaining lifetime (Installment Refund).
<TABLE>
<CAPTION>

Life Annuity Certain Period Installment Refund
Payee's Male Female Unisex Male Female Unisex Male Female Unisex
Age
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.20 3.81 4.01 4.15 3.79 3.98 4.00 3.71 3.85
60 4.67 4.17 4.43 4.59 4.14 4.37 4.37 4.02 4.19
65 5.33 4.68 5.01 5.17 4.61 4.90 4.84 4.42 4.62
70 6.26 5.39 5.82 5.89 5.24 5.58 5.45 4.94 5.18
75 7.53 6.42 6.97 6.75 6.06 6.42 6.24 5.64 5.91
80 9.33 7.95 8.63 7.66 7.04 7.37 7.25 6.57 6.88
85 11.84 10.21 11.02 8.48 8.04 8.27 8.55 7.78 8.14
90 15.31 13.49 14.40 9.08 8.81 8.96 10.21 9.30 9.74
</TABLE>

Option C - Joint and Survivor Life Income. The proceeds will be paid in equal
installments during the joint lifetime of two payees and continuing upon the
death of the first payee for the remaining lifetime of the survivor.

Page 17

<PAGE>

WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO

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

Joint Survivorship Flexible Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Surviving Insured
Prior to Maturity Date
Net Surrender Value Payable at Maturity Date
Flexible Premiums Payable During Lifetime of Surviving Insured
Until the Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results

EXHIBIT 99.A9.A

Exhibit 1(A)(5)(b)

Joint Insured Term Rider

<PAGE>

WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
(A STOCK COMPANY)

Home Office: Columbus, Ohio
Administrative Office: Clearwater, Florida

JOINT INSURED TERM RIDER

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

IN THIS RIDER, the Joint Insureds are named on Page 3 of the Policy. Western
Reserve Life Assurance Co. Of Ohio will -be referred to as We, Our or Us.

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

BENEFIT. We will pay to the Beneficiary the then current Face Amount of this
Rider upon the death of the Surviving Insured when we receive proof that both
Joint Insureds died while this Rider is in force.

FACE AMOUNT. The initial Face Amount of this Rider is shown on Page 4 of the
Policy. The Face Amount may be decreased at any time after the first policy
year. Any decrease will become effective on the first Monthiversary on or next
following the day we receive a Written Notice.

CONSIDERATION. This Rider is issued in consideration of:

1. the application for this Rider; and
2. the payment of the Initial Premium.

INCONTESTABILITY. The Incontestability Provision of the Policy also applies to
the Face Amount of this Rider.

SUICIDE. If either Joint Insured dies by suicide, while sane or insane, within
two years after the effective date of this Rider, our liability shall be limited
to an amount equal to the total monthly deductions for this Rider. However, in
no event will this Increase the total liability set forth in the Suicide
Provision of the Policy to which this Rider is attached.

TERMINATION. This Rider will terminate on the earliest of:

1. the Maturity Date of the Policy
2. the date this Policy terminates;
3. the Monthiversary on which this Rider is terminated by Written Notice.

GENERAL. This Rider is part of the Policy. It is subject to all the terms of
this Rider and the Policy. This Rider has no cash value.

The monthly deduction for this Rider, for each of the first 12 Policy months, is
shown on Page 4 of the Policy. Monthly deductions after the first policy year
will be calculated consistent with:

1. the Face Amount of this Rider and the Monthly Cost of insurance Rates
Provision of the Policy to which this Rider is attached; and
2. the death benefit G-uarantee Charge for this Rider as shown on Page 4 of
the Policy This Guarantee Charge will not be deducted on and after the No
Lapse Date shown in the Policy.

<PAGE>

EFFECTIVE DATE. This Rider becomes effective on the same date as the Policy
unless a later date is shown here.

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

/s/ WILLIAM H. GEIGER
Secretary
<PAGE>

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CLEARWATERs FLORIDA

POLICY NUMBER: 01-12345678

RIDER INFORMATION

RIDER MONTHLY DEDUCTION

JOINT INSURED TERM RIDER $10.80

NUMBER: 01-12345678-2
FACE AMOUNT: $500,000
RATE CLASS: NONSMOKER
GUARANTEE CHARGE: $.02 PER $1,000 FACE AMOUNT

THE MONTHLY DEDUCTIONS SHOWN ABOVE ARE APPLICABLE FOR THE FIRST' POLICY MONTH.
FOR MONTHLY DEDUCTIONS AFTER THE FIRST POLICY MONTH9 REFER TO THE RIDER FORM.

PAGE 4

EXHIBIT 99.A9.B

Exhibit 1(A)(5)(c)

Individual Insured Rider

<PAGE>

WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
( A STOCK COMPANY)

Home Office: Columbus, Ohio
Administrative Office: Clearwater, Florida

INDIVIDUAL INSURED RIDER

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

IN THIS RIDER, the Individual Insured is named on Page 4 of the Policy. The
Individual Insured will be referred to as You or Your. Western Reserve Life
Assurance Co. Of Ohio will be referred to as We, Our or Us.

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

BENEFIT. We will pay to the Beneficiary the Face Amount of this Rider as shown
on Page 4 of the Policy when we receive due proof that your death occurred while
this Rider is in force.

CONSIDERATION. This Rider is issued in consideration of:

1. the application for this Rider; and
2. the payment of the Initial Premium.

INCONTESTABILITY. This Rider shall be incontestable after it has been in force
while you are still alive, for two years after the effective date of this Rider.

SUICIDE. If you die by suicide, while sane or insane, within two years after the
effective date of this Rider, our liability shall be limited to an amount equal
to the total monthly deductions for this Rider. However, in no event will this
increase the total liability set forth in the Suicide Provision of the Policy to
which this Rider is attached.

CONVERSION PRIVILEGE. On any Monthiversary while this Rider is in force, the
Owner may exchange this Rider without evidence of insurability for a new policy
on your life. Such new policy will be issued upon Written Notice subject to the
following:

1. the Rider has not reached the Anniversary nearest your 70th birthday; and
2. the new policy is on any permanent plan of insurance then offered by us;
and
3. the amount of insurance upon conversion will equal the Face Amount then in
force under this Rider; and
4. the payment of the premium based on your rate class under this Rider.

TERMINATION. This Rider will terminate on the earliest of:

1. the Maturity Date of the Policy;
2. the date this Policy terminates;
3. the date of conversion of this Rider;
4. the Monthiversary on which this Rider is terminated by Written Notice;
5. the Anniversary nearest your attained age 95.

<PAGE>

GENERAL. This Rider is part of the Policy. It is subject to all the terms of
this Rider and the Policy. This Rider has no cash value.

The monthly deduction for this Rider, for each of the first 12 policy months, is
shown on Page 4 of the Policy. Monthly deductions after the first policy year
will be calculated consistent with the Face Amount of this Rider and the Monthly
Cost of Insurance Rates provision of the Policy to which this Rider is attached.

EFFECTIVE DATE. This Rider becomes effective on the same date as the Policy
unless a later date is shown here.

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

/s/ WILLIAM H. GEIGER
Secretary

EXHIBIT 99.A9.C

Exhibit 1(A)(5)(d)

Wealth Protector Rider

<PAGE>

WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
(A STOCK COMPANY)

Home Office: Columbus, Ohio
Administrative Office: Clearwater, Florida

WEALTH PROTECTOR RIDER

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

IN THIS RIDER, the Joint Insureds are named on Page 3 of the Policy. Western
Reserve Life Assurance Co. Of Ohio will be referred to as We, Our or Us.

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

BENEFIT. We will pay to the Beneficiary the Face Amount of this Rider as shown
on Page 4 of the Policy upon the death of the Surviving Insured when we receive
proof that both Joint Insureds died while this Rider is in force.

CONSIDERATION. This Rider is issued in consideration of:

1. the application for this Rider; and
2. the payment of the Initial Premium.

INCONTESTABILITY AND SUICIDE. The Incontestability and Suicide Provisions of the
Policy also apply to the Face Amount of this Rider.

TERMINATION. This Rider will terminate on the earliest of:

1. the date this Policy terminates;
2. the fourth Anniversary of this Policy;
3. the Monthiversary on which this Rider is terminated by Written Notice.

GENERAL. This Rider is part of the Policy. It is subject to all the terms of
this Rider and the Policy. This Rider has no cash value.

The monthly deduction for this Rider, for each of the 48 policy months this
Rider is in force, is shown on Page 4 of the Policy.

EFFECTIVE DATE. This Rider becomes effective on the same date as the Policy
unless a later date is shown here.

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

/s/ WILLIAM H. GEIGER
Secretary

EXHIBIT 99.1

Exhibit 1(A)(11)

Memorandum

<PAGE>

JOINT SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO'S
ISSUANCE, REDEMPTION AND TRANSFER PROCEDURES

This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Western Reserve Life
Assurance Co. of Ohio ("Western Reserve") in connection with the issuance of the
Joint Survivorship Flexible Premium Variable Life Insurance Policy ("Policy")
described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interest in the
Policies.

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

1. "Public Offering Price":

PURCHASE AND RELATED TRANSACTIONS

Set out below is a summary of the principal Policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "purchase" transaction. The summary shows that,
because of the insurance nature of the Policies, the procedures involved
necessarily differ in certain significant respects from the purchase
procedures for mutual funds and contractual plans.

(a) PREMIUM SCHEDULES AND UNDERWRITING STANDARDS

Premiums for the Policies will not be the same for all
Policyowners. Western Reserve will require the Policyowner to pay an
initial premium that is at least equal to a minimum monthly first year
premium set forth in the Policy. Policyowners will determine a planned
periodic premium payment schedule that provides for a level premium
payable at a fixed interval for a specified period of time. Payment of
premiums in accordance with this schedule is not, however, mandatory,
and failure to make a planned periodic premium payment will not of
itself cause the Policy to lapse. Instead, Policyowners may make
premium payments in any amount at any frequency, subject only to the
minimum premium amount, (1) and the maximum

- ------------------------
(1) The minimum premium amount is currently $100.00.
<PAGE>

premium limitation.(2) If at any time a premium is paid which would
result in total premiums exceeding the current maximum premium
limitation set forth in the Policy, Western Reserve will accept only
that portion of the premium which will make total premiums equal that
amount. Any portion of the premium in excess of that amount will be
returned to the Policyowner and no further premiums will be accepted
until allowed by the current maximum premium limitations set forth in
the Policy. The Policy will remain in force so long as net surrender
value is sufficient to pay certain monthly charges imposed in
connection with the Policy. Thus, the amount of a premium, if any,
that must be paid to keep the Policy in force depends upon the net
surrender value of the Policy, which in turn depends on such factors
as the investment experience and the cost of insurance charge.
However, until the No Lapse Date shown on the Policy Schedule Page,
the Policy will remain in force and no grace period will begin
provided: (1) the total of the premiums received (minus any
withdrawals and minus any outstanding loans) equals or exceeds the
minimum monthly guarantee premium times the number of months since the
policy date, including the current month, and (2) the excess
indebtedness (total of all Policy loans less any unearned loan
interest on Policy loans) does not exceed the cash value.

The cost of insurance rate utilized in computing the cost of
insurance charge will not be the same for each insured. The chief
reason is that the principle of pooling and distribution of mortality
risks is based upon the assumption that the joint insureds incur an
insurance rate commensurate with their mortality risk which is
actuarially determined based upon factors such as attained age, sex,
rate class and length of time a Policy is in force. Accordingly, while
not all joint insureds will be subject to the same cost of insurance
rate, there will be a single "rate" for all joint insureds in a given
actuarial category.

The Policies will be offered and sold pursuant to established
underwriting standards and in accordance with state insurance laws.
State insurance laws prohibit unfair discrimination among joint
insureds, but recognize that premiums must be based upon factors such
as age, sex, health and occupation.

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

(2) The maximum premium limitation will be set forth in the Policy Summary.
This limitation will be imposed to conform the Policy to certain
restrictions on premiums contained in the internal Revenue Code of 1986, as
amended.

<PAGE>

(b) APPLICATION AND INITIAL PREMIUM PROCESSING

Upon receipt of a completed application, Western Reserve will
follow certain insurance underwriting (I.E., evaluation of risks)
procedures designed to determine whether the proposed joint insureds
are

insurable. This process may involve such verification procedures as medical
examinations and may require that further information be provided by the
proposed joint insureds before a determination can be made. A Policy will not be
issued until this underwriting procedure has been completed.

If a premium of $2,000 or more is paid upon submission of the
application, amounts will then be allocated to the Money Market
Account of the WRL Series Life Account ("Series Account"). In such
instances, the policy date will ordinarily be the date of receipt of
the premium payment. If a premium of less than $2,000 is paid with the
application, such amounts will be held by Western Reserve until the
policy date. In such instances, the policy date will ordinarily be the
date the Policy goes in force. Insurance coverage under the Policy and
associated monthly deductions commence on the policy date. In either
case, the record date of the Policy will be the date on which the
Policy is recorded on Western Reserve's books as an "in force" Policy
and Western Reserve will allocate net premiums to the sub-accounts of
the Series Account on the first valuation date on or following the
record date in accordance with the directions on the application.

If Western Reserve determines to its satisfaction that on the
date the application is signed and submitted with an initial payment
the proposed joint insureds were insurable and acceptable under
Western Reserve's underwriting rules and standards for insurance for
the amount, plan and risk classification applied for in the
application, then the insurance protection applied for, subject to the
limits of liability and in accordance with the terms set forth in the
Policy and in the conditional receipt, will by reason of such payment
take effect on the later of the date of the application, or the
completion of all medical tests and examinations, if required.

Under Western Reserve's current rules, the minimum specified
amount at issue is $100,000. Western Reserve's reserves the right to
revise its rules from time to time to specify a different minimum
specified amount at issue.

<PAGE>

In the application for a Policy, the Policyowner can allocate net
premiums (total premiums less any premium expense charges) among the
sub-accounts of the Series Account and the Fixed Account.
Notwithstanding the allocation in the application, if a premium
payment of $2,000 or more is paid upon submission of the application,
the net premium will initially be allocated to the sub-account of the
Series Account that invests exclusively in shares of the Money Market
Portfolio and will be re-allocated on the first valuation date on or
following the record date in accordance with the directions in the
application. If a premium payment of less than $2,000 accompanies the
application, the net premium payment will be allocated on the first
valuation date on or following the record date in accordance with the
directions in the application. Net premiums paid after the record date
will be allocated in accordance with the Policyowner's instructions in
the application. The minimum percentage of each premium that may be
allocated to any account is 10%; percentages must be in whole numbers.
The allocation for future net premiums may be changed at any time by
providing Western Reserve with written notification. However, Western
Reserve reserves the right to limit the number of changes of the
allocation of net premiums to one per year.

(d) REINSTATEMENT

A lapsed Policy may be reinstated any time within 5 years after
the date of lapse and before the maturity date by submitting the
following items to Western Reserve:

1. A written application for reinstatement from the Policyowner;
2. Evidence of insurability satisfactory to Western Reserve; and
3. A premium that, after the deduction of premium expense
charges, is large enough to cover:

(a) one monthly deduction at the time of termination; (b) the
next two monthly deductions which will become due after the
time of reinstatement; and (c) an amount sufficient to cover
any surrender charge (as set forth in the Policy) as of the
date of reinstatement.

Any indebtedness on the date of lapse will not be reinstated. The cash
value of the Policy loan on the date of reinstatement will also not be
reinstated. The amount of cash value on the

<PAGE>

date of reinstatement will be equal to the amount of the cash value on
the date of lapse (exclusive of any Policy loan on that date) increased
by the net premiums paid at reinstatement, less the amounts paid in
accordance with (a) above. Upon approval of the application for
reinstatement, the effective date of reinstatement will be the first
monthly anniversary on or next following the date of approval of the
application of reinstatement.

(e) REPAYMENT OF INDEBTEDNESS

A loan under the Policy will be subject to an interest rate of
5.2% payable annually in advance. Outstanding indebtedness may be
repaid at any time before the maturity date of the Policy and while the
Policy is in force. Payments made by the Policyowner while there is
indebtedness will be treated as premium payments unless the Policyowner
indicates that the payment should be treated as a loan repayment. Under
Western Reserve's current procedures, at each Policy anniversary,
Western Reserve will compare the amount of the outstanding loan
(including interest in advance until the next Policy anniversary, if
not paid) to the amount in the loan reserve. Western Reserve will also
make this comparison any time the Policyowner repays all or part of the
loan. At each such time, if the amount of the outstanding loan exceeds
the amount in the loan reserve, Western Reserve will withdraw the
difference from the accounts and transfer it to the loan reserve, in
the same manner as when a loan is made. If the amount in the loan
reserve exceeds the amount of the outstanding loan, Western Reserve
will withdraw the difference from the loan reserve and transfer it to
the accounts in the same manner as premiums are allocated. Western
Reserve will allocate the repayment of indebtedness at the end of the
valuation period(3) during which the repayment is received.

(f) CORRECTION OF MISSTATEMENT OF AGE OR SEX

If Western Reserve discovers that the age or sex of either joint
insured has been misstated, Western Reserve will adjust the death
benefits based on what the cost of

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

(3) A valuation period is the period between two successive valuation
dates, commencing at the close of business of each valuation date and
ending at the close of business of the next succeeding valuation. The
net asset value per share of a portfolio of the Fund will be
determined, once daily, as of the close of the regular session of
business on the New York Stock Exchange (currently 4:00 p.m., New York
City time) Monday through Friday, except on customary national holidays
on which the New York Stock Exchange is closed.

<PAGE>

insurance charge for the most recent monthly deduction would have
purchased based on the correct age or sex.

2. "REDEMPTION PROCEDURES":

SURRENDER AND RELATED TRANSACTIONS

This section outlines those procedures which might be deemed to
constitute redemptions under the Policy. These procedures differ in certain
significant respects from the redemption procedures for mutual funds and
contractual plans.

(a) CASH VALUES

At any time before the earlier of the death of the surviving
insured or the maturity date, the Policyowner may totally surrender
or, after the first Policy year, make a cash withdrawal from the
Policy by sending a written request to Western Reserve. The amount
available for surrender is the net surrender value at the end of the
valuation period during which the surrender request is received at
Western Reserve's office. The net surrender value as of any date is
equal to:

(1) the cash value as of such date; minus
(2) any surrender charge as of such date; minus
(3) any outstanding Policy loan; plus
(4) any unearned interest.

A surrender charge will be deducted if the Policy is surrendered
during the first 15 Policy years. The surrender charge consists of a
deferred issue charge of $5.00 per $1,000 of specified amount and of a
deferred sales charge equal to 26.5% of one guideline premium and not
more than 4.2% of premiums above that amount. A declining percentage
of the surrender charges as set forth in the Policy is assessed after
the tenth year. Surrenders from the Series Account will generally be
paid within seven days of receipt of the written request. Postponement
of payments may, however, occur in certain circumstances.(4)

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

(4) Payment of any amount from the Series Account upon complete surrender,
cash withdrawal, Policy loan, or benefits payable at death or maturity
may be postponed whenever: (i) the New York Stock Exchange is closed
other than customary week-end and holiday closings, or trading on the
New York Stock Exchange is restricted as determined by the Commission;
(ii) the Commission by order permits postponement for the protection of
Policyowners; or (iii) an emergency exists, as determined by the
Commission, as a result of which disposal of securities is not
reasonable practicable or it is not reasonably practicable to determine
the value of the Series Account's net assets. Transfers may also be
postponed under these circumstances. Western Reserve further reserves
the right to defer payment of transfer, cash withdrawals or surrenders
from the Fixed Account for up to six months. Payments under the Policy
of any amount paid by check may be postponed until such time as the
check has cleared the Policyowner's bank.

<PAGE>

If the Policy is being totally surrendered, the Policy itself must
be returned to Western Reserve along with the request. A Policyowner
may elect to have the amount paid in a lump sum or under a settlement
option.

For a cash withdrawal, the amount available may be limited to no
less than $500 and to no more than 10% of the net surrender value. The
amount paid plus a charge equal to the lesser of $25 or 2% of the
amount withdrawn will be deducted from the Policy's cash value at the
end of the valuation period during which the request is received. The
amount will be deducted from the accounts in the same manner as the
current allocation instructions unless the Policyowner directs
otherwise. Cash withdrawals are allowed only once each Policy year.

In addition, when death benefit Option A is in effect, the
specified amount will be reduced by the cash withdrawal. No cash
withdrawal will be permitted which would result in a specified amount
lower than the minimum specified amount set forth in the Policy or
would deny the Policy status as life insurance under the Internal
Revenue Code and applicable regulations.

(b) BENEFIT CLAIMS

As long as the Policy remains in force, Western Reserve will
generally pay a death benefit to the named beneficiary in accordance
with the designated death benefit option within seven days after
Western Reserve receives due proof of death of the surviving insured,
and Western Reserve receives proof that both joint insureds died while
the Policy was in force, and verifies the validity of the claim.
Payment of death benefits may, however, be postponed under certain
circumstances.(5) In particular, during the first two Policy years, and
during the first two years after a Policy is reinstated, and in other
circumstances in which Western Reserve may have a basis for contesting
the claim, there can be a delay beyond the seven day period. The amount
of the death benefit is determined at the end of the valuation period
during which the surviving insured dies. The death benefit proceeds
payable under the designated death benefit option will be reduced by
any outstanding indebtedness and any due and unpaid charges. The

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

(5) SEE note 4, SUPRA.

<PAGE>

proceeds will be increased by any additional insurance provided by
rider and any unearned loan interest.

The amount of the death benefit is guaranteed not to be less than
the specified amount of the Policy. These proceeds may be reduced by
any outstanding indebtedness and any due and unpaid charges. The death
benefit may, however, exceed the specified amount of the Policy. The
amount by which the death benefit exceeds the specified amount depends
upon the death benefit option in effect and the cash value of the
Policy. Under Death Benefit Option B, the death benefit will always
vary with the cash value because the death benefit will at least equal
the specified amount plus the cash value.

The amount of the benefit payable at maturity is the net surrender
value of the Policy on the maturity date. This benefit will only be
paid if either insured is living and the Policy is in force on the
Policy's maturity date. The Policy will mature on the anniversary
nearest the younger insured's 100th birthday, if either joint insured
is living and the Policy is in force.

After the first Policy year and so long as the Policy remains in
force, the Policyowner may borrow money from Western Reserve using the
Policy as the only security for the loan. The maximum amount that may
be borrowed is an amount which, together with any loans already
outstanding and any surrender charge, is 90% of the cash value.
Indebtedness equals the total of all Policy loans less any unearned
loan interest on the loans. The loan value will be determined at the
end of the valuation period during which the loan request is received.
Loans have priority over the claims of any assignee or other person.
The loan may be repaid all of in part at any time before that maturity
date and while the Policy is in force. Payments made by the Policyowner
while there is indebtedness will be treated as premium payments unless
the Policyowner indicates that the payment should be treated as a loan
repayment. The interest rate charged on Policy loans accrues daily.
Interest payments are payable annually in advance. If unpaid when due,
interest will be added to the amount of the loan and will become part
of the loan and bear interest at the same rate.

A Policyowner may allocate a Policy loan among the accounts. If no
such allocation is made, Western Reserve will allocate the loan in
accordance with the Policyowner's current

<PAGE>

allocation instructions. The loan amount will normally be paid within
seven days after receipt of a written request. Postponement of loans
may take place under certain circumstances.(6)

Cash value equal to the portion of the Policy loan plus interest
in advance until the next Policy anniversary allocated to each account
will be transferred from the account to the loan reserve, reducing the
Policy's cash value in that account. The loan reserve is a portion of
the Fixed Account to which amounts are transferred as collateral for
Policy loans. As noted above, under Western Reserve's current
procedures, at each Policy anniversary, Western Reserve will compare
the amount of the outstanding loan (including interest in advance until
the next Policy anniversary, if not paid) to the amount in the loan
reserve. Western Reserve will also make this comparison any time, if
the Policyowner repays all or part of the loan. At each such time, if
the amount of the outstanding loan exceeds the amount in the loan
reserve, Western Reserve will withdraw the difference from the accounts
and transfer it to the loan reserve, in the same manner as when a loan
is made. If the amount in the loan reserve exceeds the amount of the
outstanding loan, Western Reserve will withdraw the difference from the
loan reserve and transfer it to the accounts in the same manner as
premiums are allocated. Cash value in the loan reserve will be credited
with guaranteed interest at 4% per year. Additional interest may be
credited to this cash value.

(d) POLICY LAPSE

Lapse will only occur where net surrender value is insufficient to
cover the monthly deduction, and a grace period expires without a
sufficient payment. If net surrender value is insufficient to cover the
monthly deduction, the Policyowner must, except as noted below, pay
during the grace period a payment at least sufficient to provide a net
premium to cover the sum of the monthly deductions due within the grace
period. However, until the No Lapse date shown on the Policy Schedule
Page, the Policy will remain in force and no grace period will begin
provided: (1) the total premiums received (minus any withdrawals and
minus any outstanding loans) equals or exceeds the minimum monthly
guarantee premium times the number of months since the Policy date,
including the current month, and (2) the excess

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

(6) SEE note 4, SUPRA

<PAGE>

indebtedness (total of all Policy loans less any unearned loan
interest on Policy loans) does not exceed the cash value.

If net surrender value is insufficient to cover the monthly
deduction, Western Reserve Life will notify the Policyowner and any
assignee of record of the minimum payment needed to keep the Policy in
force. The Policyowner will then have a grace period of 61 days,
measured from the date notice is sent to the Policyowner, to make
sufficient payment. If Western Reserve does not receive a sufficient
payment within the grace period, lapse of the Policy will result. If a
sufficient payment is received during the grace period, any resulting
net premium will be allocated among the accounts in accordance with the
Policyowner's then current instructions. If the surviving insured dies
during the grace period, the death benefit proceeds will equal the
amount of death benefit proceeds immediately prior to the commencement
of the grace period, reduced by any due and unpaid charges. See
Reinstatement, p. 4.

3. TRANSFERS

The Series Account currently has eleven sub-accounts. Each sub-account
invests exclusively in the shares of a corresponding portfolio of WRL
Series Fund, Inc., an open-end diversified management company registered
with the Securities and Exchange Commission. Policyowners may transfer cash
value among the sub-accounts of the Series Account or from the sub-accounts
to the Fixed Account, which is part of Western Reserve's General Account.
For transfers from the Fixed Account to a sub-account, Western Reserve
reserves the right to require that transfer requests be in writing and
received at Western Reserve's administrative office within thirty days
after a Policy anniversary. Under the Policy, the amount that may be
transferred is limited to the greater of (a) 25% of the amount in the Fixed
Account, or (b) the amount transferred in the prior Policy year from the
Fixed Account, unless Western Reserve consents otherwise. Currently,
Western Reserve allows 100% of the amount in the Fixed Account to be
transferred within 30 days after each Anniversary. The transfer will take
place on the day Western Reserve receives the request. No transfer charge
will apply to transfers from the Fixed Account to a Sub-Account. Amounts
may be withdrawn from the Fixed Account for cash withdrawals and surrenders
only upon written request of the Policyowner. Western Reserve further
reserves the right to defer payment of transfers, cash withdrawals, or
surrenders from the Fixed Account for up to six

<PAGE>

months. In addition, Policy provisions relating to transfers, cash
withdrawals or surrenders from the Series Account will also apply to Fixed
Account transactions. Policyowners may make transfer requests in writing or
by telephone. Written requests must be in a form acceptable to Western
Reserve. Telephonic requests are permissible if the Policyowner has
previously authorized telephone transfers in writing. Western Reserve may,
at any time, revoke or modify the transfer privilege. Cash value
transferred from one sub-account into more than one sub-account counts as
one transfer. Western Reserve will effectuate transfers and determine all
values in connection with transfers at the end of the valuation period
during which the transfer request is received. Postponement of transfers
may take place under certain circumstances.7 A transfer charge of $10 may
be imposed for the thirteenth and each subsequent transfer in a Policy year
and would be deducted from each sub-account from which a transfer is being
made in an equal amount. Transfers resulting from policy loans, the
exercise of conversion rights, and the reallocation of cash value
immediately after the record date, will not be subject to a transfer
charge. No transfer charge will apply to transfers from the Fixed Account
to a sub-account.

4. CONVERSION PROCEDURE

At any time upon written request within 24 months of the Policy date,
the Policyowner may elect to transfer all sub-account values to the Fixed
Account. No transfer charge will be assessed.

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

(7) SEE note 4, SUPRA

EXHIBIT 99.2

Exhibit 3

Opinion of Counsel

<PAGE>

WRL Letterhead

April 20, 1998

Board of Directors
Western Reserve Life Assurance
Co. of Ohio
WRL Series Life Account
201 Highland Avenue

Largo, Florida 33770

Gentlemen:

In my capacity as Vice President, Assistant Secretary and Associate General
Counsel of Western Reserve Life Assurance Co. of Ohio ("WRL"), I have
participated in the preparation and review of Post Effective Amendment No. 11 to
the Registration Statement on Form S-6 (File No. 33-69138) filed with the
Securities and Exchange Commission under the Securities Act of 1933 for the
registration of flexible premium variable life insurance policies (the
"Policies") to be issued with respect to the WRL Series Life Account (the
"Account"). The Account was established on July 16, 1985, by the Board of
Directors of WRL as a separate account for assets applicable to the Policies,
pursuant to the provisions of Section 3907.15 of the Ohio Revised Code and Rule
3901-1-12 of the Administrative Code of Ohio.

I am of the following opinion:

1. WRL has been duly organized under the laws of Ohio and is a validly
existing corporation.

2. The Account has been duly created and is validly existing as a separate
account pursuant to the aforesaid provision of Ohio law.

3. Section 3907.15 of the Ohio Revised Code provides that the portion of the
assets of the Account equal to the reserves and other liabilities for
variable benefits under the Policies is not chargeable with liabilities
arising out of any other business WRL may conduct. Assets allocated to the
Fixed Account under the Policies, however, are part of WRL's general
account and are subject to WRL's general liabilities from business
operations.

4. The Policies, when issued as contemplated by the Registration Statement,
will be legal and binding obligations of WRL in accordance with their
terms.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

/s/ THOMAS E. PIERPAN
---------------------
Thomas E. Pierpan
Vice President, Assistant Secretary
and Associate General Counsel

EXHIBIT 99.C6.A

Exhibit 6

Opinion of Alan Yaeger

<PAGE>

WRL Letterhead

April 20, 1998

Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 33770

RE: Registration No. 33-69138

Gentlemen:

This opinion is furnished in connection with the Post-Effective
Amendment No. 11 registration by Western Reserve Life Assurance Co. of Ohio of
flexible premium variable life insurance policies ("Policies") under the
Securities Act of 1933. The Prospectus included in the Registration Statement on
Form S-6 describes the Policies. The forms of Policies were prepared under my
direction, and I am familiar with the Registration Statement and Exhibits
thereof.

In my opinion, the illustrations of death benefits, cash values and net
surrender values included in the sections entitled "Death Benefit, Cash Value
and Net Surrender Value Illustrations" and "Illustration of Benefits" (Appendix
A) of the Prospectus, based on the assumptions stated in the illustrations, are
consistent with the provisions of the respective forms of the Policies.

I hereby consent to use of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the heading
"Experts" in the Prospectus.

Very truly yours,

/s/ ALAN YAEGER
- -----------------------------------
Alan Yaeger
Executive Vice President,
Actuary and Chief Financial Officer

EXHIBIT 99.C6.2

Exhibit 7

Consent of Thomas E. Pierpan, Esq.

<PAGE>

WRL Letterhead

April 20, 1998

Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 33770

Gentlemen:

I hereby consent to the reference to my name under the caption "Legal Matters"
in the Prospectus contained in Post-Effective Amendment No. 11 to the
Registration Statement on Form S-6 (File No. 33-69138) for Western Reserve Life
Assurance Co. of Ohio Series Life Account, as filed with the Securities and
Exchange Commission.

/s/ THOMAS E. PIERPAN
- -----------------------
Thomas E. Pierpan
Vice President, Associate General Counsel and
Assistant Secretary

EXHIBIT 99.C6.3

Exhibit 8

Consent of Sutherland, Asbill & Brennan LLP

<PAGE>

S.A.B. letterhead

April 20, 1998

Board of Directors
Western Reserve Life Assurance Co. of Ohio
WRL Series Life Account
201 Highland Avenue
Largo, Florida 33770

RE: WRL Series Life Account
File No. 33-69138

Gentlemen:

We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectuses for the WRL Freedom Wealth Protector contained in
Post-Effective Amendment No. 11 to the Registration Statement on Form S-6 (File
No. 33-69138) of the WRL Series Life Account filed by Western Reserve Life
Assurance Co. of Ohio with the Securities and Exchange Commission. In giving
this consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933.

Very truly yours,

SUTHERLAND, ASBILL & BRENNAN LLP

By: /s/ STEPHEN E. ROTH
-------------------------
Stephen E. Roth

EXHIBIT 99.C1A

Exhibit 9

Consent of Ernst & Young LLP

<PAGE>

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 27, 1998, with respect to the statutory-basis
financial statements and schedules of Western Reserve Life Assurance Co. of Ohio
included in Post-Effective Amendment No. 11 to the Registration Statement (Form
S-6 No. 33-69138) and related Prospectus of WRL Series Life Account.

ERNST & YOUNG LLP

Des Moines, Iowa
April 17, 1998

EXHIBIT 99.C1B

Exhibit 10

Consent of Price Waterhouse LLP

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of the WRL
Freedom Wealth Protector Post-Effective Amendment No. 11 to the Registration
Statement on Form S-6 of our report dated January 30, 1998, relating to the
financial statements and selected per unit data and ratios of the sub-accounts
comprising the WRL Series Life Account, which appear in such Prospectus. We also
consent to the reference to us under the heading "Experts" in such Prospectus.

PRICE WATERHOUSE LLP

Kansas City, Missouri
April 20, 1998