VAN KAMPEN LIFE INVESTMENT TRUST, 497, 1999-07-15

VAN KAMPEN LIFE INVESTMENT TRUST
497, 1999-07-15

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[VAN KAMPEN FUNDS LOGO]

VAN KAMPEN
LIFE INVESTMENT TRUST

COMSTOCK PORTFOLIO
DOMESTIC INCOME PORTFOLIO
EMERGING GROWTH PORTFOLIO
MONEY MARKET PORTFOLIO
Shares of the Portfolios have not been approved or disapproved by the Securities
and Exchange Commission (SEC) or any state regulators, and neither the SEC nor
any state regulator has passed upon the accuracy or adequacy of this prospectus.
It is a criminal offense to suggest otherwise.

This prospectus is dated APRIL 30, 1999,
AS SUPPLEMENTED ON JULY 15, 1999.
<PAGE> 2

No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus, in connection with the offer contained in this prospectus and, if
given or made, such other information or representation must not be relied upon
as having been authorized by the Portfolios, the Portfolios' investment adviser
or the Portfolios' distributor. This prospectus does not constitute an offer by
the Portfolios or by the Portfolios' distributor to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful for the Portfolios to make such an offer in such
jurisdiction.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summaries:
Comstock Portfolio.............................. 3
Domestic Income Portfolio....................... 4
Emerging Growth Portfolio....................... 6
Money Market Portfolio.......................... 8
Life Investment Trust General Information......... 10
Investment Objectives, Policies and Risks:
Comstock Portfolio.............................. 10
Domestic Income Portfolio....................... 11
Emerging Growth Portfolio....................... 16
Money Market Portfolio.......................... 17
Investment Practices.............................. 18
Investment Advisory Services...................... 22
Purchase of Shares................................ 24
Redemption of Shares.............................. 25
Dividends, Distributions and Taxes................ 25
Financial Highlights.............................. 27
Appendix A -- Description of Securities Ratings... A-1
</TABLE>
<PAGE> 3

COMSTOCK PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Comstock Portfolio is a mutual fund with an investment objective to seek
capital growth and income through investments in equity securities, including
common stocks, preferred stocks and securities convertible into common and
preferred stocks.

INVESTMENT STRATEGIES

Under normal market conditions, the Portfolio's management seeks to achieve the
investment objective by investing in a portfolio of equity securities,
consisting principally of common stocks. The Portfolio emphasizes a "value"
style of investing seeking well-established, undervalued companies believed to
possess the potential for capital growth and income. The Portfolio may invest up
to 15% of its total assets in securities of foreign issuers. The Portfolio may
invest in certain derivatives, such as options and futures, which may subject
the Portfolio to additional risks.

INVESTMENT RISKS

Investors who seek only long-term capital growth should be aware that the
Portfolio also seeks to generate income and that capital growth is only a part
of the Portfolio's overall investment objective. Similarly, investors who seek a
more assured level of current income should be aware that the Portfolio's income
will fluctuate and that seeking income is only a part of the Portfolio's overall
investment objective.

An investment in the Portfolio is subject to investment risks, and you could
lose money on your investment in the Portfolio. There can be no assurance that
the Portfolio will achieve its investment objective.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. Market risk may affect a single issuer,
industry, sector of the economy, or the market as a whole. Investments in equity
securities generally are affected by changes in the stock markets, which
fluctuate substantially over time, sometimes suddenly and sharply. A "value"
style of investing emphasizes undervalued companies with characteristics for
improved valuations. This style of investing is subject to the risks that the
valuations never improve or that the returns on "value" equity securities are
less than the returns on other styles of investing or the overall stock markets.
During an overall stock market decline, stock prices of small- or medium-sized
companies (in which the Portfolio may invest) often fluctuate more than prices
of larger companies. The ability of the Portfolio's investment holdings to
generate income depends on the earnings and the continuing declaration of
dividends by the issuers of such securities.

FOREIGN RISKS. Because the Portfolio may own securities of foreign issuers, it
may be subject to risks not usually associated with owning securities of U.S.
issuers. These risks can include fluctuations in foreign currencies, foreign
currency exchange controls, political and economic instability, differences in
financial reporting, differences in securities regulation and trading, and
foreign taxation issues.

RISKS OF USING DERIVATIVE INVESTMENTS. In general terms, a derivative investment
is one whose value depends on (or is derived from) the value of an underlying
asset, interest rate or index. Options and futures are examples of derivatives.
Such transactions involve risks different from the direct investment in
underlying securities such as imperfect correlation between the value of the
instruments and the underlying assets; risks of default by the other party to
certain transactions; risks that the transactions may result in losses that
partially or completely offset gains in portfolio positions; risks that the
transactions may not be liquid; and manager risk.

MANAGER RISK. As with any managed fund, the Portfolio's management may not be
successful in selecting the best-performing securities and the Portfolio's
performance may lag behind that of similar funds.

An investment in the Portfolio is not a deposit of any bank or other insured
depository institution. Your investment is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

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INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek capital growth and income over the long term.

- - Can withstand volatility in the value of their shares of the Portfolio.

- - Wish to add to their personal investment holdings a portfolio that emphasize a
"value" style of investing in equity securities.

An investment in the Portfolio may not be appropriate for all investors. The
Portfolio is not intended to be a complete investment program, and investors
should consider their long-term investment goals and financial needs when making
an investment decision about the Portfolio. An investment in the Portfolio is
intended to be a long-term investment, and the Portfolio should not be used as a
trading vehicle.

The Comstock Portfolio commenced investment operations as of April 30, 1999 and
therefore does not have a calendar year of annual performance or comparative
performance to provide to investors.

DOMESTIC INCOME
PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVES

The Domestic Income Portfolio is a mutual fund with a primary investment
objective to seek current income. When consistent with the primary investment
objective, capital appreciation is a secondary investment objective.

INVESTMENT STRATEGIES

The Portfolio's management seeks to achieve the investment objectives by
investing primarily in a diversified portfolio of income securities, including
convertible and non-convertible debt securities and preferred stocks. Under
normal market conditions, the Portfolio invests at least 80% of its total assets
in income securities rated at the time of purchase B or higher by Standard &
Poor's ("S&P") or rated B or higher by Moody's Investors Service, Inc.
("Moody's") or unrated securities judged by the Portfolio's investment adviser
to be of comparable quality at the time of purchase. Securities rated BB or
below by S&P or rated Ba or below by Moody's or unrated securities of comparable
quality are commonly referred to as "junk bonds" and involve special risks as
compared to investments in higher-grade securities (see sidebar for an
explanation of quality ratings). The Portfolio may invest up to 25% of its total
assets in securities of foreign issuers. The Portfolio may purchase or sell
securities on a when-issued or delayed delivery basis.

UNDERSTANDING
QUALITY RATINGS

Security ratings are based on the issuer's ability to pay interest and repay
the principal. Securities with ratings above the line are considered
"investment grade," while those with ratings below the line are regarded as
"noninvestment grade," or "junk bonds." A detailed explanation of these
ratings can be found in the appendix to this prospectus.

<TABLE>
<CAPTION>
S&P Moody's Meaning
- ------------------------------------------------------
<C> <S> <C>
AAA Aaa Highest quality
......................................................
AA Aa High quality
......................................................
A A Above-average quality
......................................................
BBB Baa Average quality
- ------------------------------------------------------
BB Ba Below-average quality
......................................................
B B Marginal quality
......................................................
CCC Caa Poor quality
......................................................
CC Ca Highly speculative
......................................................
C C Lowest quality
......................................................
D -- In default
......................................................
</TABLE>

INVESTMENT RISKS

With its holdings of medium- and lower-grade securities, the Portfolio has
greater risks than a portfolio owning only higher-grade securities.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. The prices of income securities tend to

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fall as interest rates rise and such declines tend to be greater among
securities with longer durations. Although the Portfolio has no policy limiting
the maturities of its investments, the Portfolio's investment adviser seeks to
maintain the dollar-weighted average duration of the Portfolio between four to
six years. This means the Portfolio generally will be subject to greater market
risk than a portfolio that owns only shorter term securities but lesser market
risk than a portfolio that owns only longer term securities. Lower-grade
securities, especially those with longer durations or that do not make regular
interest payments, may fluctuate more in price in response to negative issuer or
general economic news than higher-grade securities. When-issued and delayed
delivery transactions are subject to changes in market conditions from the time
of the commitment until settlement. This may adversely affect the prices or
yields of the securities being purchased, as well as any portfolio securities
held for payment of such commitments. The greater the Portfolio's outstanding
commitments for these securities, the greater the Portfolio's exposure to market
price fluctuation.

CREDIT RISK. Credit risk refers to an issuer's ability to make timely payments
of interest and principal. Because the Portfolio may invest in securities with
below investment grade credit quality, the Portfolio is subject to a higher
level of credit risk than a portfolio that buys only investment grade
securities. The credit quality of "noninvestment grade" securities is considered
speculative by recognized rating agencies with respect to the issuer's
continuing ability to pay interest and principal. Lower-grade securities may
have less liquidity and a higher incidence of default than investments in
higher-grade securities. The Portfolio may incur higher expenditures to protect
the Portfolio's interest in such securities. The credit risks and market prices
of lower-grade securities are more sensitive to negative issuer developments,
such as reduced revenues or increased expenditures, or adverse economic
conditions, such as a recession, than higher-grade securities.

INCOME RISK. The income you receive from the Portfolio is based primarily on
interest rates, which can vary widely over the short and long term. If interest
rates drop, your income from the Portfolio may drop as well.

CALL RISK. If interest rates fall, it is possible that issuers of securities
with high interest rates will prepay or "call" their securities before their
maturity dates. In this event, the proceeds from the called securities would be
reinvested by the Portfolio in securities with the new, lower interest rates,
resulting in a possible decline in the Portfolio's income and distributions to
shareholders.

INVESTOR PROFILE

In light of its objectives and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek current income and capital appreciation over the long term.

- - Are willing to take on the increased risks of medium- and lower-grade
securities in exchange for potentially higher income.

- - Wish to add to their personal investment holdings a portfolio that invests
primarily in income securities, including medium- and lower-grade income
securities.

5
<PAGE> 6

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Portfolio is to look at how its
performance varies from year to year. The following chart shows the annual
returns of the Portfolio over the past ten calendar years prior to the date of
this prospectus. Sales charges or other expenses at the contract level are not
reflected in this chart. If sales charges or other expenses at the contract
level had been included, the returns shown below would have been lower. Remember
that the past performance of the Portfolio is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1989' -5.44
'1990' -7.23
'1991' 21.23
'1992' 12.50
'1993' 16.32
'1994' -4.33
'1995' 21.37
'1996' 6.68
'1997' 11.90
'1998' 6.34
</TABLE>

During the ten-year period shown in the bar chart, the highest quarterly return
was 7.16% (for the quarter ended June 30, 1995) and the lowest quarterly return
was -8.33% (for the quarter ended December 31, 1989).

COMPARATIVE PERFORMANCE

This table shows how the Portfolio's performance compares with the Lehman
Brothers Index of BBB Corporate Bonds, a broad-based market index that the
Portfolio's management believes is an applicable benchmark for the Portfolio.
The performance figures do not include sales charges or other expenses at the
contract level that would be paid by investors. Average annual total returns are
shown for the periods ended December 31, 1998 (the most recently completed
calendar year prior to the date of this prospectus). Remember that the past
performance of the Portfolio is not indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Past Past 10
December 31, 1998 1 Year 5 Years Years
- -------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Van Kampen
Domestic Income
Portfolio 6.34% 8.07% 7.45%
.......................................................
Lehman Brothers
Index of BBB
Corporate Bonds 6.85% 7.96% 9.97%
.......................................................
</TABLE>

EMERGING GROWTH
PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Emerging Growth Portfolio is a mutual fund with an investment objective to
seek capital appreciation by investing in a portfolio of securities consisting
principally of common stocks of small- and medium-sized companies considered by
the Portfolio's investment adviser to be emerging growth companies.

INVESTMENT STRATEGIES

Under normal market conditions, the Portfolio's management seeks to achieve the
investment objective by investing at least 65% of the Portfolio's total assets
in a portfolio of common stocks of small-and medium-sized emerging growth
companies. Emerging growth companies are those domestic or foreign companies
that the Portfolio's management believes are in the early stages of their life
cycles and have the potential to become major enterprises. Investing in such
companies involves risks not ordinarily associated with investments in larger,
more established companies. The Portfolio may invest up to 20% of its total
assets in securities of foreign issuers. The Portfolio may invest in certain
derivatives, such as options and futures, which may subject the Portfolio to
additional risks.

6
<PAGE> 7

INVESTMENT RISKS

With its investments in common stocks of smaller-and medium-sized, less
established companies, the Portfolio has greater risks than a portfolio that
invests only in larger-sized, more seasoned companies.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in equity
securities generally are affected by changes in the stock markets, which
fluctuate substantially over time, sometimes suddenly and sharply. During an
overall market decline, stock prices of small- and medium-sized companies (such
as those in which the Portfolio invests) often fluctuate more and often fall
more than the prices of larger sized company stocks. It is possible that the
stocks of small- and medium-sized companies will be more volatile and
underperform the overall stock market. Historically, smaller- and medium-sized
company stocks have sometimes gone through extended periods when they did not
perform as well as larger company stocks.

RISKS OF EMERGING GROWTH COMPANIES. Companies that the Portfolio's management
believe are emerging growth companies are often companies with limited product
lines, markets, distribution channels or financial resources and the management
of such companies may be dependent upon one or a few key people. The stocks of
emerging growth companies can therefore be subject to more abrupt or erratic
market movements than stocks of larger, more established companies or the stock
market in general.

INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek capital appreciation over the long term.

- - Are willing to take on the increased risks of investing in smaller- and
medium-sized, less established companies in exchange for potentially higher
capital appreciation.

- - Can withstand substantial volatility in the value of their shares of the
Portfolio.

- - Wish to add to their personal holdings a portfolio that invests primarily in
common stocks of small-and medium-sized emerging growth companies.

Investors should carefully consider the additional risks associated with
investments in smaller- and medium-sized, less established companies. An
investment in the Portfolio may not be appropriate for all investors. The
Portfolio is not intended to be a complete investment program, and investors
should consider their long-term investment goals and financial needs when making
an investment decision about the Portfolio. An investment in the Portfolio is
intended to be a long-term investment and the Portfolio should not be used as a
trading vehicle.

7
<PAGE> 8

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Portfolio is to look at how its
performance varies from year to year. The following chart shows the annual
returns of the Portfolio over the past three calendar years prior to the date of
this prospectus. Sales charges or other expenses at the contract level are not
reflected in this chart. If sales charges or other expenses at the contract
level had been included, the returns shown below would have been lower. Remember
that the past performance of the Portfolio is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1996' 16.65
'1997' 20.42
'1998' 37.56
</TABLE>

The Portfolio commenced investment operations on July 3, 1995. The return from
July 3, 1995 to December 31, 1995 was 17.20%.

During the three-year period shown in the bar chart, the highest quarterly
return was 28.01% (for the quarter ended December 31, 1998) and the lowest
quarterly return was -12.05% (for the quarter ended September 30, 1998).

COMPARATIVE PERFORMANCE

This table shows how the Portfolio's performance compares with two broad-based
market indices that the Portfolio's management believes are applicable
benchmarks for the portfolio: the Russell 2000 Stock Index and the Standard &
Poor's Midcap 400 Index. The performance figures do not include sales charges or
other expenses at the contract level that would be paid by investors. Average
annual total returns are shown for the periods ended December 31, 1998 (the most
recently completed calendar year prior to the date of this prospectus). Remember
that the past performance of the Portfolio is not indicative of its future
performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Since
December 31, 1998 1 Year Inception
- ---------------------------------------------
<S> <C> <C> <C> <C>
Van Kampen
Emerging Growth
Portfolio 37.56% 26.31%(1)
.............................................
Russel 2000
Stock Index -2.55% 13.54%(2)
.............................................
Standard & Poor's
Midcap 400 Index 19.11% 23.00%(3)
.............................................
</TABLE>

Inception dates: (1) 7/3/95, (2) 6/30/95, (3) 7/6/95.

MONEY MARKET
PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Money Market Portfolio is a mutual fund with an investment objective to seek
protection of capital and high current income through investments in money
market instruments. There can be no assurance that the Portfolio will achieve
its investment objective.

INVESTMENT STRATEGIES

The Portfolio seeks to maintain a constant net asset value of $1.00 per share by
investing in a diversified portfolio of money market instruments maturing within
one year with a dollar-weighted average maturity of 90 days or less. The
Portfolio seeks high current income from these short-term investments to the
extent consistent with protection of capital.

INVESTMENT RISKS

An investment in the Portfolio is subject to investment risks.

INCOME RISK. The income you receive from the Portfolio is based primarily on
short-term interest rates, which can vary widely over time. If short-term
interest rates drop, your income from the Portfolio may drop as well.

8
<PAGE> 9

CREDIT RISK. Credit risk refers to an issuer's ability to make timely payments
of interest and principal. Credit risk should be low for the Portfolio because
it invests in high-quality money market instruments.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. An investment in the Portfolio is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Portfolio seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Portfolio.

INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek protection of capital and high current income through investments in
money market instruments.

ANNUAL PERFORMANCE

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1989' 9.13
'1990' 7.83
'1991' 5.60
'1992' 3.36
'1993' 2.66
'1994' 3.71
'1995' 5.46
'1996' 4.89
'1997' 5.06
'1998' 5.02
</TABLE>

During the ten-year period shown in the bar chart, the highest quarterly return
was 2.34% (for the quarter ended June 30, 1989) and the lowest quarterly return
was 0.65% (for the quarter ended June 30, 1993).

Investors can obtain the current seven-day yield of the Portfolio by calling
(800) 341-2911.

COMPARATIVE PERFORMANCE

The table below shows the Portfolio's performance for the past 1-year, 5-year
and 10-year periods ended December 31, 1998 (the most recently completed
calendar year prior to the date of this prospectus). The performance figures do
not include sales charges or other expenses at the contract level that would be
paid by investors. Remember that the past performance of the Portfolio is not
indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Past Past 10
December 31, 1998 1 Year 5 Years Years
- -------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Van Kampen Money
Market Portfolio 5.02% 4.82% 5.25%
.......................................................
</TABLE>

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VAN KAMPEN LIFE
INVESTMENT TRUST
GENERAL INFORMATION

Van Kampen Life Investment Trust (the "Trust") is a diversified, open-end
management investment company which offers shares in eleven separate Portfolios
(the "Portfolios"), four of which are described herein and offered pursuant to
this Trust's prospectus. Each Portfolio is in effect a separate mutual fund.
Each Portfolio has its own income, expenses, assets, liabilities and net asset
value and each Portfolio issues its own shares. Shares of each Portfolio
represent an interest only in that Portfolio. Shares are sold only to separate
accounts (the "Accounts") of various insurance companies to fund the benefits of
variable annuity or variable life insurance policies (the "Contracts"). The
Accounts may invest in shares of the Portfolios in accordance with allocation
instructions received from contract owners ("Contract Owners"). Such allocation
rights, as well as sales charges and other expenses imposed on Contract Owners
by the Contracts, are further described in the accompanying Contract prospectus.

Each Portfolio of the Trust has a different investment objective(s) which it
pursues through its investment policies as described below under "Investment
Objectives and Policies." The section entitled "Investment Practices" provides
further discussion of certain investment techniques, strategies or risks that
are common to some or all of the Portfolios. The investment objective(s) of each
Portfolio is a fundamental policy and may not be changed without shareholder
approval of the holders of a majority of the Portfolio's outstanding voting
securities, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"). The differences in objectives and policies among the Portfolios can
be expected to affect the return of each Portfolio and the degree and types of
risks to which each Portfolio is subject. There are risks inherent in all
investments in securities; accordingly there can be no assurance that any
Portfolio will achieve its investment objective(s).

INVESTMENT OBJECTIVES,
POLICIES AND RISKS

COMSTOCK PORTFOLIO

The investment objective of the Comstock Portfolio is to seek capital growth and
income through investments in equity securities, including common stocks,
preferred stocks and securities convertible into common and preferred stocks.
There are risks inherent in all investments in securities; accordingly, there
can be no assurance that the Portfolio will achieve its investment objective.

Under normal market conditions, the Portfolio's investment adviser seeks to
achieve the investment objective by investing in equity securities, consisting
principally of common stocks. Common stocks are shares of a corporation or other
entity that entitle the holder to a pro rata share of the profits of the
corporation, if any, without preference over any other class of securities,
including such entity's debt securities, preferred stock and other senior equity
securities. Common stock usually carries with it the right to vote and
frequently an exclusive right to do so.

While the Portfolio invests principally in common stocks, the Portfolio may
invest in preferred stock and securities convertible into common and preferred
stocks. Preferred stock generally has a preference as to dividends and
liquidation over an issuer's common stock but ranks junior to debt securities in
an issuer's capital structure. Unlike interest payments on debt securities,
preferred stock dividends are payable only if declared by the issuer's board of
directors. Preferred stock also may be subject to optional or mandatory
redemption provisions. A convertible security is a bond, debenture, note,
preferred stock, warrant or other security that may be converted into or
exchanged for a prescribed amount of common stock or other equity security of
the same or a different issuer within a particular period of time at a specified
price or formula. A convertible security generally entitles the holder to
receive interest paid or accrued on debt securities or the dividend paid on
preferred stock until the convertible security matures or is redeemed, converted
or exchanged. Before conversion, convertible securities generally have
characteristics similar to both debt and equity securities. The value of
convertible securities tends to decline as interest rates rise and, because of
the conversion feature, tends to vary with fluctuations in

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<PAGE> 11

the market value of the underlying equity security. Convertible securities
ordinarily provide a stream of income with generally higher yields than those of
common stock of the same or similar issuers. Convertible securities generally
rank senior to common stock in a corporation's capital structure but are usually
subordinated to comparable nonconvertible securities. Preferred stocks and
convertible securities generally do not participate directly in any dividend
increases or decreases of the underlying equity security although the market
prices of preferred stocks and convertible securities may be affected by any
such dividend changes or other changes in the underlying equity security.

In selecting securities for investment, the Portfolio will focus primarily on
the security's potential for capital growth and income. The Portfolio emphasizes
a "value" style of investing seeking well-established, undervalued companies.
The Portfolio's investment adviser generally seeks to identify companies that
are undervalued and have identifiable factors that might lead to improved
valuations. This catalyst could come from within the company in the form of new
management, operational enhancements, restructurings or reorganization. It could
also be an external factor, such as an improvement in industry conditions or a
regulatory change. The Portfolio's style presents the risk that the valuations
never improve or that the returns on "value" equity securities are less than
returns on other styles of investing or the overall stock market. The Portfolio
may invest in issuers of small-, medium- or large-capitalization companies. The
securities of small- or medium-sized companies may be subject to more abrupt or
erratic market movements than securities of larger companies or the market
averages in general. In addition, such companies typically are subject to a
greater degree of change in earnings and business prospects than are larger
companies. Thus, the Portfolio may be subject to greater investment risk than
that assumed through investment in the equity securities of
larger-capitalization companies.

The Portfolio may dispose of a security whenever, in the opinion of the
Portfolio's investment adviser, factors indicate it is desirable to do so. Such
factors include change in economic or market factors in general or with respect
to a particular industry, a change in the market trend or other factors
affecting an individual security, changes in the relative market performance or
appreciation possibilities offered by individual securities and other
circumstances bearing on the desirability of a given investment.

The Portfolio generally holds up to 10% of its total assets in high-quality
short-term debt securities and in investment grade corporate debt securities in
order to provide liquidity. High-quality short-term debt investments include
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, prime commercial paper, certificates of deposit, bankers'
acceptances and other obligations of domestic banks having total assets of at
least $500 million and repurchase agreements. Investment grade corporate debt
securities include securities rated BBB or better by Standard & Poor's ("S&P")
or rated Baa or better by Moody's Investors Service, Inc. ("Moody's") or unrated
securities judged by the investment adviser to be of comparable quality. A more
complete description of security ratings is contained in the appendix to this
prospectus. The market prices of such debt securities generally vary inversely
with changes in prevailing interest rates.

The Portfolio may invest up to 15% of its total assets in securities of foreign
issuers. Such investments include certain risks not typically associated with
investments in U.S. securities. See "Investment Practices -- Foreign
Securities."

The Portfolio may engage in portfolio management strategies and techniques
involving options, futures contracts and options on futures which may subject
the Portfolio to additional risks. See "Investment Practices -- Using Options,
Futures Contracts and Options on Futures Contracts."

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

DOMESTIC INCOME PORTFOLIO

The primary investment objective of the Domestic Income Portfolio is to seek
current income. When consistent with the primary investment objective, capital
appreciation is a secondary investment objective. There are risks inherent in
all investments in securities; accordingly, there can be no assurance that the
Portfolio will achieve its investment objectives.

The Portfolio's investment adviser seeks to achieve these investment objectives
by investing primarily in a diversified portfolio of income securities,
including convertible and non-convertible debt securities and preferred stocks.
The Portfolio may invest in

11
<PAGE> 12

investment grade securities and lower-rated and unrated securities. Under normal
market conditions, the Portfolio invests at least 80% of its total assets in
income securities rated at the time of purchase B or higher by S&P or rated B or
higher by Moody's or unrated securities judged by the Portfolio's investments
adviser to be of comparable quality. Securities rated BB or below by S&P or Ba
or below by Moody's or unrated securities of comparable quality are commonly
referred to as "junk bonds" and involve special risks as compared to investments
in higher-grade securities. See "Risks of Lower Grade Securities" below.

In general, the prices of income securities vary inversely with interest rates.
If interest rates rise, income security prices generally fall; if interest rates
fall, income security prices generally rise. In general, longer-maturity income
securities offer higher yields than shorter-maturity income securities, all
other factors, including credit quality, being equal; however, for a given
change in interest rates, longer-maturity income securities generally fluctuate
more in price (gaining or losing more in value) than shorter-maturity income
securities. While the Portfolio has no policy limiting the maturities of the
income securities in which it may invest, the Portfolio's investment adviser
seeks to moderate market risk by generally maintaining a portfolio duration
within a range of four to six years. Duration is a measure of the expected life
of an income security that was developed as an alternative to the concept of
"term to maturity." Duration incorporates an income security's yield, coupon
interest payments, final maturity and call features into one measure. A duration
calculation looks at the present value of a security's entire payment stream
whereas term to maturity is based solely on the date of a security's final
principal repayment.

The higher yields sought by the Portfolio are generally obtainable from
securities rated in the lower categories by recognized rating services or
unrated securities of comparable quality. These securities may be issued in
connection with corporate restructurings, such as leveraged buyouts, mergers,
acquisitions, debt recapitalization or similar events. These securities are
often issued by smaller, less creditworthy companies or companies with
substantial debt and may include financially troubled companies or companies in
default or in restructuring. Lower-grade securities often are subordinated to
the prior claims of banks and other senior lenders. Lower-grade securities are
regarded by the rating agencies as predominately speculative with respect to the
issuer's continuing ability to make principal and interest payments. The ratings
of S&P and Moody's represent their opinions of the quality of the securities
they undertake to rate, but not the market risk of such securities. It should be
emphasized, however, that ratings are general and are not absolute standards of
quality. Consequently, securities with the same maturity, coupon and rating may
have different yields while securities of the same maturity and coupon with
different ratings may have the same yield. See "Risks of Lower-Grade Securities"
below.

In purchasing securities for the Portfolio, the investment adviser considers,
among other thing, the security's current income potential, the rating assigned
to the security, the issuer's experience and managerial strength, the financial
soundness of the issuer and the outlook of its industry, changing financial
condition, borrowing requirements or debt maturity schedules, regulatory
concerns, and responsiveness to changes in business conditions and interest
rates. The Portfolio's investment adviser also may consider relative values
based on anticipated cash flow, interest or dividend coverage, balance sheet
analysis, and earnings prospects. The investment adviser evaluates each
individual income security for credit quality and value and attempts to identify
higher-yielding securities of companies whose financial condition has improved
since the issuance of such securities or is anticipated to improve in the
future. Because of the number of investment considerations involved in investing
in medium- and lower-grade securities, achievement of the Portfolio's investment
objectives may be more dependent upon the investment adviser's credit analysis
than is the case with investing solely in higher-grade securities.

The Portfolio may invest in securities not producing immediate cash income when
their effective yield over comparable instruments producing cash income make
these investments attractive. Prices on non-cash-paying instruments may be more
sensitive to changes in the issuer's financial condition, fluctuation in
interest rates and market demand/supply imbalances than cash-paying securities
with similar credit ratings, and thus may be more speculative. In addition, the
accrued interest income earned on such instruments is included in investment
company taxable income, thereby increasing the required minimum distributions to
shareholders without providing the corresponding cash flow with which to pay
such distributions. The Portfolio's investment

12
<PAGE> 13

adviser will weigh these concerns against the expected total returns from such
instruments.

The Portfolio also may purchase or sell U.S. government securities on a forward
commitment basis. See "When-Issued and Delayed Delivery" below.

Although the Portfolio invests primarily in domestic income securities, the
Portfolio may invest up to 25% of its total assets based on the market value at
the time of investment in securities of foreign issuers. Such investments
include certain risks not typically associated with investments in U.S.
securities. See "Investment Practices -- Foreign Securities."

Income securities in which the Portfolio may invest include the following:

STRAIGHT INCOME SECURITIES. These include bonds and other debt obligations which
bear a fixed or variable rate of interest payable at regular intervals and have
a fixed or resettable maturity date, and preferred stock, which generally has a
fixed or variable dividend rate (and, unlike interest on debt securities, such
dividends must be declared by the issuer's board of directors before becoming
payable) and may be subject to optional or mandatory redemption provisions. The
particular terms of such securities vary and may include features such as call
provisions and sinking funds.

PAY-IN-KIND INCOME SECURITIES. These pay interest in additional income
securities rather than in cash.

ZERO-COUPON SECURITIES. These bear no interest obligation but are issued at a
discount from their value at maturity. When held to maturity, their entire
return equals the difference between their issue price and their maturity value.
Interest is however accrued by the Portfolio each day for accounting and federal
income tax purposes.

ZERO-FIXED-COUPON SECURITIES. These are zero-coupon securities which convert on
a specified date to interest-bearing income securities.

The Portfolio may invest in securities rated below B by both S&P and Moody's,
common stocks or other equity securities and income securities on which interest
or dividends are not being paid when such investments are consistent with the
Portfolio's investment objectives or are acquired as part of a unit consisting
of a combination of income or equity securities. The Portfolio will not purchase
any such securities which will cause more than 20% of its total assets to be so
invested or which would cause more than 10% of its total assets to be invested
in common stocks or other equity securities. Equity securities as referred to
herein do not include preferred stocks (which the Portfolio considers income
securities). This limitation does not require the Portfolio to sell a portfolio
security because its rating has been changed.

Securities rated below B by both S&P and Moody's often include debt obligations
or other securities of companies that are financially troubled, in default or
are in bankruptcy or reorganization. Securities of such companies are usually
available at a deep discount from the face value of the instrument. The
Portfolio may invest in deep discount securities when the Portfolio's investment
adviser believes that existing factors are likely to restore the company to a
healthy financial condition. Such factors include a restructuring of debt,
management changes, existence of adequate assets, or other unusual
circumstances.

A security purchased at a deep discount may pay a very high effective yield. In
addition, if the financial condition of the issuer improves, the underlying
value of the security may increase, resulting in a capital gain. If the company
defaults on its obligations or remains in default, or if the plan of
reorganization is insufficient for debtholders, the deep discount securities may
stop generating income and lose value or become worthless. The Portfolio's
investment adviser will balance the benefits of deep discount securities with
their risks. While a diversified portfolio may reduce the overall impact of a
deep discount security that is in default or loses its value, the risk cannot be
eliminated.

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

RISKS OF LOWER-GRADE SECURITIES. Securities which are in the lower-grade
categories generally offer a higher current yield than is offered by
higher-grade securities of similar maturities, but they also generally involve
greater risks, such as greater credit risk, greater market risk, greater
liquidity concerns and potentially greater manager risk. Investors should
carefully consider the risks of owning shares of a portfolio which invests in
lower-grade securities before investing in the Portfolio.

13
<PAGE> 14

Credit risk relates to the issuer's ability to make timely payment of interest
and principal when due. Lower-grade securities are considered more susceptible
to nonpayment of interest and principal or default than higher-grade securities.
Increases in interest rates or changes in the economy may significantly affect
the ability of issuers of lower-grade debt securities to pay interest and to
repay principal, to meet projected financial goals or to obtain additional
financing. In the event that an issuer of securities held by the Portfolio
experiences difficulties in the timely payment of principal and interest and
such issuer seeks to restructure the terms of its borrowings, the Portfolio may
incur additional expenses and may determine to invest additional assets with
respect to such issuer or the project or projects to which the Portfolio's
securities relate. Further, the Portfolio may incur additional expenses to the
extent that it is required to seek recovery upon a default in the payment of
interest or the repayment of principal on its portfolio holdings, and the
Portfolio may be unable to obtain full recovery on such amounts.

Market risk relates to changes in market value of a security that occur as a
result of variation in the level of prevailing interest rates and yield
relationships in the debt securities market and as a result of real or perceived
changes in credit risk. The value of the Portfolio's investments can be expected
to fluctuate over time. When interest rates decline, the value of a portfolio
invested in fixed income securities generally can be expected to rise.
Conversely, when interest rates rise, the value of a portfolio invested in fixed
income securities generally can be expected to decline. However, the secondary
market prices of lower-grade debt securities generally are less sensitive to
changes in interest rate and are more sensitive to general adverse economic
changes or specific developments with respect to the particular issuers than are
the secondary market prices of higher-grade debt securities. A significant
increase in interest rates or a general economic downturn could severely disrupt
the market for lower-grade securities and adversely affect the market value of
such securities. Such events also could lead to a higher incidence of default by
issuers of lower-grade securities as compared with higher-grade securities. In
addition, changes in credit risks, interest rates, the credit markets or periods
of general economic uncertainty can be expected to result in increased
volatility in the market price of the lower-grade securities in the Portfolio
and thus in the net asset value of the Portfolio. Adverse publicity and investor
perceptions, whether or not based on rational analysis, may affect the value and
liquidity of lower-grade securities.

The markets for lower-grade securities may be less liquid than the markets for
higher-grade securities. Liquidity relates to the ability of a fund to sell a
security in a timely manner at a price which reflects the value of that
security. To the extent that there is no established retail market for some of
the lower-grade securities in which the Portfolio may invest, trading in such
securities may be relatively inactive. Prices of lower-grade securities may
decline rapidly in the event a significant number of holders decide to sell.
Changes in expectations regarding an individual issuer or lower-grade securities
generally could reduce market liquidity for such securities and make their sale
by the Portfolio more difficult, at least in the absence of price concessions.
The effects of adverse publicity and investor perceptions may be more pronounced
for securities for which no established retail market exists as compared with
the effects on securities for which such a market does exist. An economic
downturn or an increase in interest rates could severely disrupt the market for
such securities and adversely affect the value of outstanding securities or the
ability of the issuers to repay principal and interest. Further, the Portfolio
may have more difficulty selling such securities in a timely manner and at their
stated value than would be the case for securities for which an established
retail market does exist.

The Portfolio's investment adviser is responsible for determining the net asset
value of the Portfolio, subject to the supervision of the Portfolio's Board of
Trustees. During periods of reduced market liquidity and in the absence of
readily available market quotations for lower-grade securities held in the
Portfolio's portfolio, the ability of the Portfolio's investment adviser to
value the Portfolio's securities becomes more difficult and the investment
adviser's use of judgment may play a greater role in the valuation of the
Portfolio's securities due to the reduced availability of reliable objective
data.

New or proposed laws may have an impact on the market for lower-grade
securities. The Portfolio's investment adviser is unable at this time to predict
what effect, if any, legislation may have on the market for lower-grade
securities.

Special tax considerations are associated with investing in certain lower-grade
securities, such as zero coupon or pay-in-kind securities. The Portfolio

14
<PAGE> 15

accrues income on these securities prior to the receipt of cash payments. The
Portfolio must distribute substantially all of its income to its shareholders to
qualify for pass-through treatment under federal income tax law and may,
therefore, have to dispose of its portfolio securities to satisfy distribution
requirements.

The Portfolio will rely on its investment adviser's judgment, analysis and
experience in evaluating the creditworthiness of an issue. The amount of
available information about the financial condition of certain lower-grade
issuers may be less extensive than other issuers. In its analysis, the
Portfolio's investment adviser may consider the credit ratings of S&P and
Moody's in evaluating securities although the investment adviser does not rely
primarily on these ratings. Ratings evaluate only the safety of principal and
interest payments, not the market value risk. Additionally, ratings are general
and not absolute standards of quality, and credit ratings are subject to the
risk that the creditworthiness of an issuer may change and the rating agencies
may fail to change such ratings in a timely fashion. A rating downgrade does not
require the Portfolio to dispose of a security. The Portfolio's investment
adviser continuously monitors the issuers of securities held in the Portfolio.
Because of the number of investment considerations involved in investing in
lower-grade securities, achievement of the Portfolio's investment objectives may
be more dependent upon the investment adviser's credit analysis than is the case
with investing in higher-grade securities.

The table below sets forth the percentages of the Portfolio's assets invested
during the fiscal year ended December 31, 1998 in the various S&P's and Moody's
rating categories and in unrated securities determined by the Portfolio's
investment adviser to be of comparable quality. The percentages are based on the
dollar-weighted average of credit ratings of all securities held by the
Portfolio during the 1998 fiscal year computed on a monthly basis.

<TABLE>
<CAPTION>
Period Ended December 31, 1998
Unrated Securities of
Rated Securities Comparable Quality
(As a Percentage of (As a Percentage of
Rating Category Portfolio Value) Portfolio Value)
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA/Aaa 2.56% 0.00%
....................................................................
AA/Aa 0.00% 0.00%
....................................................................
A/A 13.96% 0.00%
....................................................................
BBB/Baa 55.01% 0.00%
....................................................................
BB/Ba 28.47% 0.00%
....................................................................
Percentage of
Rated and
Unrated
Securities 100.00% 0.00%
....................................................................
</TABLE>

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase or sell
U.S. government securities on a "when-issued" or "delayed delivery" basis
("Forward Commitments"). These transactions occur when securities are purchased
or sold by the Portfolio with payment and delivery taking place in the future,
frequently a month or more after such transaction. The price is fixed on the
date of the commitment, and the seller continues to accrue interest on the
securities covered by the Forward Commitment until delivery and payment take
place. At the time of settlement, the market value of the securities may be more
or less than the purchase or sale price. The Portfolio may either settle a
Forward Commitment by taking delivery of the securities or may either resell or
repurchase a Forward Commitment on or before the settlement date in which event
the Portfolio may reinvest the proceeds in another Forward Commitment. These
transactions are subject to market risk as the value or yield of a security at
delivery may be more or less than the purchase price or the yield generally
available on securities when delivery occurs. When engaging in Forward
Commitments, the Portfolio relies on the other party to complete the
transaction, should the other party fail to do so, the Portfolio might lose a
purchase or sale opportunity that could be more advantageous than alternative
opportunities at the time of the failure. The Portfolio maintains a segregated
account (which is marked to market daily) of cash or liquid portfolio securities
with the Portfolio's custodian in an aggregate amount equal to the amount of its
commitment as long as the obligation to purchase or sell continues.

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<PAGE> 16

EMERGING GROWTH PORTFOLIO

The investment objective of the Emerging Growth Portfolio is to seek capital
appreciation by investing in a portfolio of securities consisting principally of
common stocks of small- and medium-sized companies considered by the Portfolio's
investment adviser to be emerging growth companies. Any ordinary income received
from securities owned by the Portfolio is entirely incidental to the Portfolio's
investment objective of capital appreciation. There are risks inherent in all
investments in securities; accordingly, there can be no assurance that the
Portfolio will achieve its investment objective.

As a fundamental investment policy, the Portfolio under normal conditions,
invests at least 65% of its total assets in common stocks of small- and medium-
sized companies both domestic and foreign, in the early stages of their life
cycles that the Portfolio's investment adviser believes have the potential to
become major enterprises. The Portfolio's investment adviser, under current
market conditions, generally defines small- and medium-sized companies by
reference to the Standard & Poor's Midcap 400 Index (which consists of companies
in the capitalization range of approximately $170 million to $14 billion as of
March 31, 1999). Investments in such companies may offer greater opportunities
for growth of capital than larger, more established companies, but also may
involve certain special risks. Emerging growth companies often have limited
product lines, markets, distribution channels or financial resources, and they
may be dependent upon one or a few key people for management. The securities of
such companies may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general.

The Portfolio does not limit its investments to any single group or type of
security. The Portfolio may invest in securities involving special situations,
such as new management, special products and techniques, unusual developments,
mergers or liquidations. Investments in unseasoned companies and special
situations often involve much greater risks than are inherent in other types of
investments, because securities of such companies may be more likely to
experience unexpected fluctuations in price.

The Portfolio's primary approach is to seek what the Portfolio's investment
adviser believes to be unusually attractive growth investments on an individual
company basis. The Portfolio may invest in securities that have above average
volatility of price movement. Because prices of common stocks and other
securities fluctuate, the value of an investment in the Portfolio will vary
based upon the Portfolio's investment performance. The Portfolio attempts to
reduce overall exposure to risk from declines in securities prices by spreading
its investments over many different companies in a variety of industries. There
is, however, no assurance that the Portfolio will be successful in achieving its
objective.

Common stocks are shares of a corporation or other entity that entitle the
holder to a pro rata share of the profits of the corporation, if any, without
preference over any other class of securities, including such entity's debt
securities, preferred stock and other senior equity securities. Common stock
usually carries with it the right to vote and frequently an exclusive right to
do so.

While the Portfolio invests principally in common stocks, the Portfolio may
invest to a limited extent in other securities such as preferred stocks,
convertible securities and warrants. Preferred stock generally has a preference
as to dividends and liquidation over an issuer's common stock but ranks junior
to debt securities in an issuer's capital structure. Unlike interest payments on
debt securities, preferred stock dividends are payable only if declared by the
issuer's board of directors. Preferred stock also may be subject to optional or
mandatory redemption provisions. Generally, warrants are securities that may be
exchanged for a prescribed amount of common stock or other equity security of
the issuer within a particular period of time at a specified price or in
accordance with a specified formula.

The Portfolio may invest up to 20% of its total assets in securities of foreign
issuers. Such investments include certain risks not typically associated with
investments in U.S. securities. See "Investment Practices -- Foreign
Securities."

The Portfolio may engage in portfolio management strategies and techniques
involving options, futures contracts and related options which may subject the
Portfolio to additional risks. See "Investment Practices -- Using Options,
Futures Contracts and Options on Futures Contracts."

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

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<PAGE> 17

MONEY MARKET PORTFOLIO

The investment objective of the Money Market Portfolio is to seek protection of
capital and high current income through investments in money market instruments.
There are risks inherent in all investments in securities; accordingly there can
be no assurance that the Portfolio will achieve its investment objective.

The investment policies, the percentage limitations, and the kinds of securities
in which the Portfolio can invest may be changed by the Portfolio's Board of
Trustees, unless expressly governed by those limitations stated under
"Investment Restrictions" in the Trust's Statement of Additional Information
which can be changed only by action of the shareholders of the Portfolio. It is
not the intention of the Portfolio's Trustees, however, to change these policies
without prior notice to shareholders.

There are risks inherent in all investments in securities, accordingly there can
be no assurance that the Portfolio will achieve its investment objective or that
the Portfolio will be able at all times to preserve the net asset value per
share at $1.00 per share. The daily dividend rate paid by the Portfolio is
expected to fluctuate with changes in prevailing market interest rates. The
Portfolio uses the amortized cost method for valuing portfolio securities
purchased at a discount.

The Portfolio may invest in money market instruments of the following types, all
of which will be U.S. dollar obligations:

OBLIGATIONS OF THE U.S. GOVERNMENT, ITS AGENCIES OR ITS INSTRUMENTALITIES. The
Portfolio may invest in obligations issued or guaranteed as to principal and
interest by the U.S. government, its agencies or its instrumentalities which are
supported by any of the following: (a) the full faith and credit of the U.S.
government, (b) the right of the issuer to borrow an amount limited to a
specific line of credit from the U.S. government, (c) discretionary authority of
the U.S. government to purchase obligations of its agencies or instrumentalities
or (d) the credit of the instrumentality. Such agencies or instrumentalities
include, but are not limited to, the Federal National Mortgage Association, the
Government National Mortgage Association, Federal Land Banks, and the Farmer's
Home Administration.

BANK OBLIGATIONS. The Portfolio may invest in negotiable time deposits,
certificates of deposit and bankers' acceptances which are obligations of
domestic banks having total assets in excess of $1 billion as of the date of
their most recently published financial statements. The Portfolio is also
authorized to invest up to 5% of its total assets in certificates of deposit
issued by domestic banks having total assets of less than $1 billion, provided
that the principal amount of the certificate of deposit acquired by the
Portfolio is insured in full by the Federal Deposit Insurance Corporation.

COMMERCIAL PAPER. The Portfolio may invest in short-term commercial paper
obligations of companies which at the time of investment are (a) rated in one of
the two highest categories by at least two nationally recognized statistical
organizations (or one rating organization if the obligation was rated by only
one such organization) or (b) if unrated, are of comparable quality as
determined in accordance with procedures established by the Portfolio's Board of
Trustees. Commercial paper consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by corporations in order to finance their
current operations. The Portfolio's current policy is to limit investments in
commercial paper to obligations rated in the highest rating category. A more
complete description of security ratings is in the appendix to this prospectus.

REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements with
banks and broker-dealers which involve certain risks in the event of a default
by the other party. See "Investment Practices -- Repurchase Agreements" below
and in the Statement of Additional Information.

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

17
<PAGE> 18

INVESTMENT PRACTICES

REPURCHASE AGREEMENTS

Each Portfolio may enter into repurchase agreements with banks or broker-dealers
in order to earn a return on temporarily available cash. A repurchase agreement
is a short-term investment in which the purchaser (i.e., the Portfolio) acquires
ownership of a debt security and the seller agrees to repurchase the obligation
at a future time and set price, thereby determining the yield during the holding
period. Repurchase agreements involve certain risks in the event of default by
the other party. Each Portfolio may enter into repurchase agreements with banks
or broker-dealers deemed to be creditworthy by the Portfolio's investment
adviser under guidelines approved by the Portfolio's Board of Trustees. No
Portfolio will invest in repurchase agreements maturing in more than seven days
if any such investment, together with any other illiquid securities held by such
Portfolio, would exceed the Portfolio's limitation on illiquid securities
described below. In the event of the bankruptcy or other default of a seller of
a repurchase agreement, a Portfolio could experience both delays in liquidating
the underlying securities and losses including: (a) possible decline in the
value of the underlying security during the period while the Portfolio seeks to
enforce its rights thereto; (b) possible lack of access to income on the
underlying security during this period; and (c) expenses of enforcing its
rights.

For the purpose of investing in repurchase agreements, a Portfolio's investment
adviser may aggregate the cash that certain funds or portfolios advised or
subadvised by the investment adviser or certain of its affiliates would
otherwise invest separately into a joint account. The cash in the joint account
is then invested in repurchase agreements and the funds or portfolios that
contributed to the joint account share pro rata in the net revenue generated.
The investment adviser believes that the joint account produces efficiencies and
economies of scale that may contribute to reduced transaction costs, higher
returns, higher quality investments and greater diversity of investments for the
participating Portfolio than would be available to the Portfolio investing
separately. The manner in which the joint account is managed is subject to
conditions set forth in an exemptive order from the SEC authorizing this
practice, which conditions are designed to ensure the fair administration of the
joint account and to protect the amounts in that account.

Repurchase agreements are fully collateralized by the underlying debt securities
and are considered to be loans under the 1940 Act. A Portfolio pays for such
securities only upon physical delivery or evidence of book entry transfer to the
account of a custodian or bank acting as agent. The seller under a repurchase
agreement will be required to maintain the value of the underlying securities
marked-to-market daily at not less than the repurchase price. The underlying
securities (normally securities of the U.S. government, or its agencies and its
instrumentalities) may have maturity dates exceeding one year. A Portfolio does
not bear the risk of a decline in value of the underlying security unless the
seller defaults under its repurchase obligation.

FOREIGN SECURITIES

Each of the Portfolios listed below may invest in securities issued by foreign
issuers up to the following limits:

<TABLE>
<S> <C> <C>
Comstock Portfolio Up to 15% of total assets
..........................................................
Domestic Income Portfolio Up to 25% of total assets
..........................................................
Emerging Growth Portfolio Up to 20% of total assets
..........................................................
</TABLE>

Such securities may be denominated in U.S. dollars or in currencies other than
U.S. dollars. Investments in foreign securities present certain risks not
ordinarily associated with investments in securities of U.S. issuers. These
risks include fluctuations in foreign currency exchange rates, political,
economic or legal developments (including war or other instability,
expropriation of assets, nationalization and confiscatory taxation), imposition
of foreign exchange limitations (including currency blockage), withholding taxes
on dividend or interest payments or capital transactions or other restrictions,
higher transaction costs (including higher brokerage, custodial and settlement
costs and currency translation costs) and possible difficulty in enforcing
contractual obligations or taking judicial action. Also, foreign securities may
not be as liquid and may be more volatile than comparable domestic securities.

In addition, there often is less publicly available information about many
foreign issuers, and issuers of foreign securities are subject to different,
often less comprehensive, auditing, accounting, financial reporting and
disclosure requirements than domestic

18
<PAGE> 19

issuers. There is generally less government regulation of stock exchanges,
brokers and listed companies abroad than in the U.S., and, with respect to
certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, or diplomatic developments which could affect investment
in those countries. Because there is usually less supervision and governmental
regulation of exchanges, brokers and dealers than there is in the U.S., a
Portfolio may experience settlement difficulties or delays not usually
encountered in the U.S.

Delays in making trades in foreign securities relating to volume constraints,
limitations or restrictions, clearance or settlement procedures, or otherwise
could impact yields and result in temporary periods when assets are not fully
invested or attractive investment opportunities are foregone.

A Portfolio's investments in securities of developing or emerging markets are
subject to greater risks than a Portfolio's investments in securities of
developed countries since emerging markets tend to have economic structures that
are less diverse and mature and political systems that are less stable than
developed countries.

Each of these Portfolios may purchase foreign securities in the form of American
Depository Receipts, European Depositary Receipts or other securities
representing underlying shares of foreign companies. The risks of foreign
investments should be considered carefully by an investor in a Portfolio that
invests in foreign securities.

FOREIGN CURRENCY TRANSACTIONS

Each Portfolio's securities that are denominated or quoted in currencies other
than the U.S. dollar will be affected by changes in foreign currency exchange
rates (and exchange control regulations) which affects the value of the
securities in the Portfolio and the income or dividends and appreciation or
depreciation of its investments. Changes in foreign currency exchange ratios
relative to the U.S. dollar will affect the U.S. dollar value of the Portfolio's
assets denominated in that currency and the Portfolio's yield on such assets. In
addition, the Portfolio will incur costs in connection with conversions between
various currencies. A Portfolio's foreign currency exchange transactions
generally will be conducted on a spot basis (that is, cash basis) at the spot
rate for purchasing or selling currency prevailing in the foreign currency
exchange market. A Portfolio purchases and sells foreign currency on a spot
basis in connection with the settlement of transactions in securities traded in
such foreign currency. The Portfolios do not purchase and sell foreign
currencies as an investment.

A Portfolio also may enter into contracts with banks or other foreign currency
brokers and dealers to purchase or sell foreign currencies at a future date
("forward contracts") and purchase and sell foreign currency futures contracts
to hedge against changes in foreign currency exchange rates. A foreign currency
forward contract is a negotiated agreement between the contracting parties to
exchange a specified amount of currency at a specified future time at a
specified rate. The rate can be higher or lower than the spot rate between the
currencies that are the subject of the contract.

A Portfolio may attempt to hedge against changes in the value of the U.S. dollar
in relation to a foreign currency by entering into a forward contract for the
purchase or sale of the amount of foreign currency invested or to be invested,
or by buying or selling a foreign currency futures contract for such amount.
Futures contracts are described below under the heading "Investment
Practices -- Using Options, Futures Contracts and Options in Futures Contracts."
Such hedging strategies may be employed before a Portfolio purchases a foreign
security traded in the hedged currency which a Portfolio anticipates acquiring
or between the date the foreign security is purchased or sold and the date on
which payment therefore is made or received. Hedging against a change in the
value of a foreign currency in the foregoing manner does not eliminate
fluctuations in the price of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions reduce
or preclude the opportunity for gain if the value of the hedged currency should
move in the direction opposite to the hedged position. Unanticipated changes in
currency prices may result in poorer overall performance for the Portfolio than
if it had not entered into such contracts.

The Portfolio's custodian will place cash or liquid securities in a segregated
account having a value equal to the aggregate amount of the Portfolio's
commitments under forward contracts. If the value of the securities placed in
the segregated account declines, additional cash or securities are placed in the
account on a daily basis so that the value of the account equals the amount of
the Portfolio's

19
<PAGE> 20

commitments with respect to such contracts. As an alternative to maintaining all
or part of the segregated account, the Portfolio may purchase a call option
permitting the Portfolio to purchase the amount of foreign currency by a forward
sale contract at a price no higher than the forward contract price or the
Portfolio may purchase a put option permitting the Portfolio to sell the amount
of foreign currency subject to a forward purchase contract at a price as high or
higher than the forward contract price.

ILLIQUID SECURITIES

Each of the Portfolios listed below may invest in illiquid securities and
certain restricted securities up to the following limits:

<TABLE>
<S> <C> <C>
Comstock Portfolio Up to 10% of net assets
......................................................
Domestic Income Up to 5% of net assets
Portfolio
......................................................
Emerging Growth Up to 15% of net assets
Portfolio
......................................................
Money Market Portfolio Up to 5% of net assets
......................................................
</TABLE>

Such securities may be difficult or impossible to sell at the time and the price
that the Portfolio would like. Thus, the Portfolio may have to sell such
securities at a lower price, sell other securities instead to obtain cash or
forego other investment opportunities.

USING OPTIONS, FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

Each Portfolio (excluding the Domestic Income Portfolio and the Money Market
Portfolio) may use options, futures contracts or options on futures contracts in
several different ways, depending upon the status of a Portfolio's portfolio
securities and the investment adviser's expectations concerning the securities
or currency markets.

In times of stable or rising securities' prices, the Portfolios generally seek
to be fully invested. Even when the Portfolios are fully invested, however,
prudent management requires that at least a small portion of assets be available
as cash to honor redemption requests and for other short-term needs. The
Portfolios may also have cash on hand that has not yet been invested. The
portion of a Portfolio's assets that is invested in cash or cash equivalents
does not fluctuate with overall market prices, so that, in times of rising
market prices, the Portfolio may underperform the market in proportion to the
amount of cash or cash equivalents in the Portfolio. By purchasing stock or bond
index futures contracts, however, the Portfolios can compensate for the cash
portion of its assets and may obtain performance equivalent to investing all of
its assets in securities.

If the Portfolios' investment adviser forecasts a market decline, the Portfolios
may seek to reduce its exposure to the securities markets by increasing its cash
position. By selling stock or bond index futures contracts instead of Portfolio
securities, a similar result can be achieved to the extent that the performance
of the futures contracts correlates to the performance of the Portfolios'
investments. Sales of futures contracts frequently may be accomplished more
rapidly and at less cost than the actual sale of securities. Once the desired
hedged position has been effected, the Portfolios could then liquidate
securities in a more deliberate manner, reducing its futures position
simultaneously to maintain the desired balance, or it could maintain the hedged
position.

As an alternative to futures contracts, the Portfolios can engage in options (or
stock or bond index options or stock or bond index futures options) to manage
the Portfolios' risk in advancing or declining markets. For example, the value
of a put option generally increases as the underlying security declines below a
specified level, value is protected against a market decline to the degree the
performance of the put correlates with the performance of the Portfolios'
investment portfolio. If the market remains stable or advances, the Portfolios
can refrain from exercising the put and the Portfolios will participate in the
advance, having incurred only the premium cost for the put.

The Portfolios are authorized to purchase and sell listed and over-the-counter
options ("OTC Options"). OTC Options are subject to certain additional risks
including default by the other party to the transaction and the liquidity of the
transactions.

In addition to futures and options on securities, the Portfolios may engage in
foreign currency futures and options. The Portfolios may use currency options to
increase its gross income or to protect it against declines in the U.S. dollar
value of foreign currency denominated securities and against increases in the
U.S. dollar cost of such securities to be acquired. As in the case of other
kinds of options, however, the selling of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium received, and
the Portfolios could be required to cover its position by purchasing or selling
foreign currencies at disadvantageous exchange rates,

20
<PAGE> 21

thereby incurring losses. The purchase of an option on a foreign currency may
constitute an effective hedge against fluctuations in exchange rates although,
in the event of rate movements adverse to a Portfolio's position, the Portfolio
may forfeit the entire amount of the premium plus related transaction costs.
Options on foreign currencies in which the Portfolios invest are traded on U.S.
and foreign exchanges or over-the-counter.

In certain cases, the options and futures markets provide investment or risk
management opportunities that are not available from direct investments in
securities. In addition, some strategies can be performed with greater ease and
at lower cost by utilizing the options and futures markets rather than
purchasing or selling portfolio securities or currencies. However, such
transactions involve risks different from the direct investment in underlying
securities such as imperfect correlation between the value of the instruments
and the underlying assets, risks of default by the other party to certain
transactions, risks that the transactions may incur losses that partially or
completely offset gains in portfolio positions, risks that the transactions may
not be liquid and manager risk. In addition, such transactions may involve
commissions and other costs, which may increase a Portfolio's expenses and
reduce its return. A more complete discussion of options, futures contracts and
related options and their risks is contained in the Statement of Additional
Information.

OTHER INVESTMENT PRACTICES AND RISK FACTORS

Although the Portfolios do not intend to engage in substantial short-term
trading, each may sell securities without regard to the length of time they have
been held in order to take advantage of new investment opportunities or when the
Portfolio's management believes the securities potential relative to the
respective Portfolio's investment objective has lessened or otherwise. Each
Portfolio's turnover rate is shown under the heading "Financial Highlights." The
portfolio turnover rate for each Portfolio may be expected to vary from year to
year. A high portfolio turnover rate (100% or more) increases the Portfolio's
transaction costs, including brokerage commissions or dealer costs, and may
result in the realization of more short-term capital gains than if the Portfolio
had lower portfolio turnover. Increases in a Portfolio's transaction costs would
impact the Portfolio's performance. The turnover rate will not be a limiting
factor, however, if the Portfolio's investment adviser considers portfolio
changes appropriate.

Further information about these types of investments and other investment
practices that may be used by the Portfolios is contained in the Statement of
Additional Information which can be obtained by investors free of charge as
described on the back cover of this prospectus.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, each Portfolio may invest on a temporary basis a portion or
all of its assets in securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, prime commercial paper, certificates of deposit,
bankers' acceptances and other obligations of domestic banks having total assets
of at least $500 million, and repurchase agreements. Except with respect to the
Money Market Portfolio, a Portfolio may not achieve its investment objective(s)
if it takes a defensive position.

YEAR 2000 RISKS

Like other mutual funds, financial and business organizations and individuals
around the world, the Portfolios could be adversely affected if the computer
systems used by the Portfolios' investment adviser and other service providers
do not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." The
Portfolios' investment adviser is taking steps that it believes are reasonably
designed to address the Year 2000 Problem with respect to computer systems that
it uses and to obtain reasonable assurances that comparable steps are being
taken by the Portfolios' other major service providers. At this time, there can
be no assurances that these steps will be sufficient to avoid any adverse impact
to the Portfolios. In addition, the Year 2000 Problem may adversely affect the
markets and the issuers of securities in which the Portfolios may invest which,
in turn, may adversely affect the net asset values of the Portfolios. Improperly
functioning trading systems may result in settlement problems and liquidity
issues. In addition, corporate and governmental data processing errors may
result in production problems for individual companies or issuers and overall
economic uncertainty. Earnings of individual issuers will be affected by
remediation costs, which may be substantial and may be reported inconsistently
in U.S. and foreign financial statements. Accordingly, the

21
<PAGE> 22

Portfolios' investments may be adversely affected. The statements above are
subject to the Year 2000 Information and Readiness Disclosure Act which Act may
limit the legal rights regarding the use of such statements in the case of a
dispute.

INVESTMENT ADVISORY
SERVICES

THE INVESTMENT ADVISER

Van Kampen Asset Management Inc. is the investment adviser for each of the
Portfolios (the "Adviser"). The Adviser is a wholly owned subsidiary of Van
Kampen Investments Inc. ("Van Kampen Investments"). Van Kampen Investments is a
diversified asset management company with more than two million retail investor
accounts, extensive capabilities for managing institutional portfolios, and more
than $75 billion under management or supervision. Van Kampen Investments' more
than 50 open-end and 39 closed-end funds and more than 2,500 unit investment
trusts are professionally distributed by leading financial advisers nationwide.
Van Kampen Funds Inc., the distributor of the Portfolios (the "Distributor") and
the sponsor of the funds mentioned above, is also a wholly owned subsidiary of
Van Kampen Investments. Van Kampen Investments is an indirect wholly owned
subsidiary of Morgan Stanley Dean Witter & Co. The Adviser's principal office is
located at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace, Illinois 60181-5555.

ADVISORY AGREEMENTS

Each Portfolio retains the Adviser to manage the investment of its assets and to
place orders for the purchase and sale of its portfolio securities. Under an
investment advisory agreement (the "Combined Advisory Agreement") between the
Adviser and the Trust, on behalf of the Asset Allocation Portfolio, the Domestic
Income Portfolio, the Enterprise Portfolio, the Government Portfolio and the
Money Market Portfolio (the "Combined Portfolios") and under other advisory
agreements between the Adviser and the Trust on behalf of each remaining
Portfolio, the Trust pays the Adviser a monthly fee computed based upon an
annual rate applied to average daily net assets of the Portfolios as follows:

<TABLE>
<S> <C>
- -----------------------------------------

Asset Allocation Portfolio*,
Domestic Income Portfolio,
Enterprise Portfolio*, Government
Portfolio* and Money Market
Portfolio (based upon their
combined average daily net assets)

First $500 million........... 0.50%

Next $500 million............ 0.45%

Over $1 billion.............. 0.40%

(The resulting fee is prorated to
each of these Portfolios based upon
their respective average daily net
assets.)

Comstock Portfolio

First $500 million........... 0.60%

Over $500 million............ 0.55%

Emerging Growth Portfolio......... 0.70%
</TABLE>

- ---------------
* Not offered pursuant to this prospectus.

After voluntary fee waivers applicable to certain Portfolios, each Portfolio
paid the Adviser an advisory fee for the fiscal year ended December 31, 1998 at
the effective rate applied to the Portfolio's average daily net assets as
follows:

<TABLE>
<S> <C>
- -----------------------------------------

Comstock Portfolio................ *

Domestic Income Portfolio......... 0.01%

Emerging Growth Portfolio......... 0.32%

Money Market Portfolio............ 0.11%
</TABLE>

- ---------------
* As of December 31, 1998, the Comstock Portfolio had not commenced investment
operations and, accordingly, had no assets nor paid advisory fees from which
an effective rate could be derived.

Under each advisory agreement, the Portfolio reimburses the Adviser for the cost
of the Portfolio's accounting services, which include maintaining its financial
books and records and calculating its daily net asset value. Other operating
expenses paid by the Portfolio include service fees, distribution fees,
custodial fees, legal and independent accountant fees, the costs of reports and
proxies to shareholders,

22
<PAGE> 23

trustees' fees (other than those who are affiliated persons of the Adviser,
Distributor or Van Kampen Investments) and all other business expenses not
specifically assumed by the Adviser.

The Adviser may utilize at is own expense credit analysis, research and trading
support services provided by its affiliate, Van Kampen Investment Advisory Corp.
("Advisory Corp.").

PERSONAL INVESTMENT POLICIES

The Trust and the Adviser have adopted Codes of Ethics designed to recognize the
fiduciary relationship among the Trust and the Adviser and their employees. The
Codes permit directors, trustees, officers and employees to buy and sell
securities for their personal accounts subject to certain restrictions. Persons
with access to certain sensitive information are subject to preclearance and
other procedures designed to prevent conflicts of interest.

PORTFOLIO MANAGEMENT

The Portfolios have different portfolio managers.

The Comstock Portfolio is managed by a management team headed by B. Robert
Baker, Jr., Senior Portfolio Manager. Mr. Baker has been primarily responsible
for managing the Comstock Portfolio's investment portfolio since July 1994. Mr.
Baker has been a Senior Vice President since March 1999 and a Vice President and
a Portfolio Manager of the Adviser and Advisory Corp. since June 1995. Prior to
June 1995, Mr. Baker was an Associate Portfolio Manager of the Adviser.
Portfolio Managers Jason Leder and Edie Terreson have been responsible as
co-managers for the day-to-day management of the Comstock Portfolio's investment
portfolio since December 1995 and December 1997, respectively. Mr. Leder has
been a Vice President since March 1999 and an Assistant Vice President of the
Adviser and Advisory Corp. since October 1996. Prior to October 1996, Mr. Leder
was an Associate Portfolio Manager of the Adviser. Prior to February 1995, Mr.
Leder was a Securities Analyst with Salomon Brothers, Inc. Prior to August 1992,
Mr. Leder was a Securities Analyst with Fidelity Management and Research. Ms.
Terreson has been a Vice President since March 1999 and an Assistant Vice
President of the Adviser and Advisory Corp. since December 1997. Prior to
December 1997, Ms. Terreson was an Associate Portfolio Manager of the Adviser.
Prior to March 1997, Ms. Terreson was a Securities Analyst and Associate
Portfolio Manager with Delaware Investment Advisers. Prior to May 1996, Ms.
Terreson was a Securities Analyst and Associate Portfolio Manager with J.W.
Seligman & Co.

The Domestic Income Portfolio is managed by Kelly Gilbert, a Vice President of
the Adviser. Ms. Gilbert joined the Adviser and Advisory Corp. in September 1995
and became an Assistant Vice President of the Adviser and Advisory Corp. in
December 1997. Ms. Gilbert has been a Vice President of the Adviser and Advisory
Corp. since February 1999. Prior to September 1995, Ms. Gilbert was a Corporate
Bond Trader at ABN AMRO, N.A., a foreign owned bank. Reid Hill joined the
Adviser in 1995 and Advisory Corp. in 1992 and became an Assistant Vice
President of the Adviser and Advisory Corp. in December 1998.

The Emerging Growth Portfolio is managed by a management team headed by Gary M.
Lewis, Senior Portfolio Manager. Mr. Lewis has been primarily responsible for
managing the Portfolio since its inception. Mr. Lewis has been Senior Vice
President of the Adviser since October 1995 and Advisory Corp. since June 1995.
Prior to October 1995, Mr. Lewis was Vice President and Portfolio Manager of the
Adviser. Portfolio Managers Dudley Brickhouse, David Walker and Janet Luby are
responsible as co-managers for the day-to-day management of the Portfolio. Mr.
Brickhouse has been a Portfolio Manager and Vice President of the Adviser and
Advisory Corp. since January 1999 and an Associate Portfolio Manager of the
Adviser since September 1997. Prior to September 1997, Mr. Brickhouse was with
NationsBank Investment Management. Mr. Brickhouse has been affiliated with the
Portfolio since September 1997. Mr. Walker has been a Portfolio Manager and Vice
President of the Adviser and Advisory Corp. since January 1999 and an Assistant
Vice President of the Adviser since June 1995. Prior to June 1995 Mr. Walker was
a Quantitative Analyst of the Adviser. Mr. Walker has been affiliated with the
Portfolio since May 1996. Ms. Luby, has been Portfolio Manager and Vice
President of the Adviser and Advisory Corp. since January 1999 and an Assistant
Vice President of the Adviser since December 1997. Prior to January 1997, Ms.
Luby was an Associate Portfolio Manager of the Adviser. Prior to July 1995, Ms.
Luby was with AIM Capital Management, Inc. Ms. Luby has been affiliated with the
Portfolio since May 1995.

23
<PAGE> 24

PURCHASE OF SHARES

The Trust is offering its shares only to Accounts of various insurance companies
to fund the benefits of variable annuity or variable life insurance contracts.
The Trust does not foresee any disadvantage to holders of Contracts arising out
of the fact that the interests of the holders may differ from the interests of
holders of life insurance policies and that holders of one insurance policy may
differ from holders of other insurance policies. Nevertheless, the Trust's
Trustees intend to monitor events in order to identify any material
irreconcilable conflicts which may possibly arise and to determine what action,
if any, should be taken. The Contracts are described in the separate
prospectuses issued by participating insurance companies and accompanying this
Trust's prospectus.

The Trust continuously offers shares in each of the Portfolios to the Accounts
at prices equal to the respective per share net asset value of the Portfolio.
The Distributor, located at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace,
Illinois 60181-5555, acts as the distributor of the shares. Each of the Trust
and the Distributor reserves the right to refuse any order for the purchase of
shares. Net asset value is determined in the manner set forth below under
"Determination of Net Asset Value."

DETERMINATION OF NET ASSET VALUE

Net asset value per share is computed for each Portfolio as of the close of
trading (currently 4:00 p.m., New York time) each day the New York Stock
Exchange is open. See the accompanying prospectus for the policies for
information regarding holidays observed by the insurance company. Net asset
value of each Portfolio is determined by adding the total market value of all
portfolio securities held by the Portfolio, cash and other assets, including
accrued interest. All liabilities, including accrued expenses, of the Portfolio
are subtracted. The resulting amount is divided by the total number of
outstanding shares of the Portfolio to arrive at the net asset value of each
share. See "Determination of Net Asset Value" in the Statement of Additional
Information for further information.

Securities listed or traded on a national securities exchange are valued at the
last sale price. Unlisted securities and listed securities for which the last
sales price is not available are valued at the mean between the last reported
bid and asked prices. U.S. government and agency obligations are valued at the
mean between the last reported bid and asked prices. Listed options are valued
at the last reported sale price on the exchange on which such option is traded
or, if no sales are reported, at the mean between the last reported bid and
asked prices. Private placement securities are valued at the last reported bid
price. Securities for which market quotations are not readily available and
other assets are valued at a fair value in good faith by the Adviser in
accordance with procedures established by the Portfolio's Board of Trustees.
Short-term investments for all Portfolios other than the Money Market Portfolio
are valued as described in the notes to financial statements in the Statement of
Additional Information.

The Money Market Portfolio's assets are valued on the basis of amortized cost,
which involves valuing a portfolio security at its cost, assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the security. While this
method provides certainty in valuation, it may result in periods in which value
as determined by amortized cost is higher or lower than the price the Portfolio
would receive if it sold the security. During such periods, the yield to
investors in the Portfolio may differ somewhat from that obtained in a similar
fund which uses available market quotations to value all of its portfolio
securities.

Trading in securities on many foreign securities exchanges (including European
and Far Eastern securities exchange) and over-the-counter markets is normally
completed before the close of business on each business day in New York (i.e., a
day on which the Exchange is open). In addition, securities trading in a
particular country or countries may not take place on all business days for the
Exchange or may take place on days which are not business days for the Exchange.
Changes in valuations on certain securities may occur at times or on days on
which a Portfolio's net asset value is not calculated and on which a Portfolio
does not effect sales, redemptions and exchanges of its shares. The Portfolio
calculates net asset value per share, and therefore effects sales, redemptions
and exchanges of its shares, as of the close of trading on the Exchange each day
the Exchange is open for trading. Such calculation does not take place
contemporaneously with the determination of the prices of certain foreign
portfolio securities used in such calculation. If events materially affecting
the value of such securities occur between the time when their price is
determined and the time when a Portfolio's net asset value is calculated, such
securities may be valued at fair value as determined in good faith

24
<PAGE> 25

by the Adviser based in accordance with procedures established by the Trustees.

REDEMPTION OF SHARES

Payment for shares tendered for redemption by the insurance company is made
ordinarily in cash within seven days after tender in proper form, except under
unusual circumstances as determined by the SEC. The redemption price will be the
net asset value next determined after the receipt of a request in proper form.
The market values of the securities in each Portfolio are subject to daily
fluctuations and the net asset value per share of each Portfolio's shares will
fluctuate accordingly. Therefore, the redemption value may be more or less than
the investor's cost.

DIVIDENDS,
DISTRIBUTIONS
AND TAXES

All dividends and capital gains distributions of each Portfolio are
automatically reinvested by the Account in additional shares of such Portfolio.

Shares of the Money Market Portfolio become entitled to income distributions
declared on the day the shareholder service agent receives payment of the
purchase price in the form of federal funds. Such shares do not receive income
distributions declared on the date of redemption.

DIVIDENDS OF THE MONEY MARKET PORTFOLIO. The Money Market Portfolio declares
income dividends each business day payable monthly. The Money Market Portfolio's
net income for dividend purposes is calculated daily and consists of interest
accrued or discount earned, plus or minus any net realized gains or losses on
portfolio securities, less any amortization of premium and the expenses of the
Money Market Portfolio.

DIVIDENDS AND DISTRIBUTIONS OF THE COMSTOCK PORTFOLIO, THE DOMESTIC INCOME
PORTFOLIO AND THE EMERGING GROWTH PORTFOLIO Dividends from stocks and interest
earned from other investments are the main source of income for these
Portfolios. Substantially all of this income, less expenses, is distributed to
Accounts on an annual basis. When a Portfolio sells portfolio securities, it may
realize capital gains or losses, depending on whether the prices of the
securities sold are higher or lower than the prices the Portfolio paid to
purchase them. Net capital gains represent the excess of net long term capital
gains over net short-term capital losses and any losses carried forward from
prior years. Each of these Portfolios distributes any net capital gains to
Accounts no less frequently than annually.

TAX STATUS OF THE PORTFOLIOS. Each Portfolio has elected to be taxed as a
"regulated investment company" under the Code. By maintaining its qualification
as a "regulated investment company," a Portfolio is not subject to federal
income taxes to the extent it distributes its net investment income and net
capital gains. If for any taxable year a Portfolio does not qualify for the
special tax treatment afforded regulated investment companies, all of its
taxable income, including any net capital gains, would be subject to tax at
regular corporate rates (without any deduction for distributions to
shareholders).

TAX TREATMENT TO INSURANCE COMPANY AS SHAREHOLDER. The investments of the
Accounts in the Portfolios are subject to the diversification requirements of
Section 817(h) of the Code, which must be met at the end of each quarter of the
year (or within 30 days thereafter). Regulations issued by the Secretary of the
Treasury have the effect of requiring the Accounts to invest no more than 55% of
their total assets in securities of any one issuer, no more than 70% in the
securities of any two issuers, no more than 80% in the securities of any three
issuers, and no more than 90% in the securities of any four issuers. For this
purpose, the U.S. Treasury and each U.S. Government agency and instrumentality
is considered to be a separate issuer. In the event the investments of the
Accounts in the Portfolios are not properly diversified under Code Section
817(h), then the policies funded by shares of the Portfolios will not be treated
as life insurance for federal income tax purposes and the owners of the policies
will be subject to taxation on their respective shares of the dividends and
distributions paid by the relevant Portfolios.

Dividends paid by each Portfolio from its ordinary income and distributions of
each Portfolio's net short-term capital gains are includable in the insurance
company's gross income. The tax treatment of such dividends and distributions
depends on the insurance company's tax status. To the extent

25
<PAGE> 26

that income of a Portfolio represents dividends on equity securities rather than
interest income, its distributions are eligible for the 70% dividends received
deduction applicable in the case of a life insurance company as provided in the
Code. The Trust will send to the Accounts a written notice required by the Code
designating the amount and character of any distributions made during such year.

Under the Code, any distributions designated as being made from a Portfolio's
net capital gains are taxable to the insurance company as long-term capital
gains. Such distributions of net capital gains will be designated as capital
gain dividends in a written notice to the Accounts which accompanies the
distribution payments. Capital gain dividends are not eligible for the dividends
received deduction. Ordinary income dividends and capital gain dividends to the
insurance company may also be subject to state and local taxes.

As described in the accompanying prospectus for the Contracts, the insurance
company reserves the right to assess the Account a charge for any taxes paid by
it.

CERTAIN INVESTMENT PRACTICES OF PORTFOLIOS. Certain investment practices of a
Portfolio may be subject to special provisions of the Code that, among other
things, may defer the use of certain losses of the Portfolio and affect the
holding period of the securities held by the Portfolio and the character of the
gains or losses realized by the Portfolio. These provisions may also require the
Portfolio to recognize income or gain without receiving cash with which to make
distributions in the amounts necessary to maintain the Portfolio's qualification
as a regulated investment company and avoid income and excise taxes. Each
Portfolio will monitor its transactions and may make certain tax elections in
order to mitigate the effect of these rules and prevent disqualification of the
Portfolio as a regulated investment company.

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<PAGE> 27

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each
Portfolio's financial performance for the periods shown. The Comstock Portfolio
had not commenced investment operations prior to December 31, 1998 and has no
historical financial highlights to report. Certain information reflects
financial results for a single share of a Portfolio. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in a Portfolio (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose reports, along with each Portfolio's financial
statements, are included in the Statement of Additional Information and may be
obtained by shareholders without charge by calling the telephone number on the
back cover of this prospectus. This information should be read in conjunction
with the financial statements and notes thereto included in the Statement of
Additional Information.

<TABLE>
<CAPTION>
Year Ended December 31,
DOMESTIC INCOME PORTFOLIO 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Net Asset Value, Beginning of the Period...... $8.252 $8.008 $ 8.21 $ 7.35 $ 8.58
------ ------ ------ ------ -------

Net Investment Income....................... .614 .704 .755 .71 .85
Net Realized and Unrealized Gain/Loss....... (.096) .252 (.212) .8525 (1.2275)
------ ------ ------ ------ -------

Total from Investment Operations.............. .518 .956 .543 1.5625 (.3775)
------ ------ ------ ------ -------

Less Distributions from Net Investment
Income................................... .022 .712 .745 .7025 .8525
------ ------ ------ ------ -------

Net Asset Value, End of the Period............ $8.748 $8.252 $8.008 $ 8.21 $ 7.35
====== ====== ====== ====== =======

Total Return*................................. 6.34% 11.90% 6.68% 21.37% (4.33%)
Net Assets at End of the Period (In
millions)................................... $ 17.9 $ 17.2 $ 19.8 $ 26.6 $ 21.3
Ratio of Expenses to Average Net Assets*...... .60% .60% .60% .60% .60%
Ratio of Net Investment Income to Average Net
Assets*..................................... 7.29% 7.74% 7.97% 8.11% 8.35%

Portfolio Turnover............................ 46% 78% 77% 54% 94%

*If certain expenses had not been assumed by
the Adviser, Total Return would have been
lower and the ratios would have been as
follows:
Ratio of Expenses to Average Net Assets....... 1.09% 1.05% 1.29% .93% .95%
Ratio of Net Investment Income to Average Net
Assets...................................... 6.80% 7.29% 7.28% 7.78% 8.00%
</TABLE>

27
<PAGE> 28

<TABLE>
<CAPTION>
July 3, 1995
(Commencement of
Year Ended December 31, Investment Operations) to
Emerging Growth Portfolio 1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period...... $16.450 $13.660 $ 11.72 $10.00
------- ------- ------- ------

Net Investment Loss......................... (.014) (.007) (.016) (.08)
Net Realized and Unrealized Gain............ 6.186 2.797 1.956 1.80
------- ------- ------- ------

Total from Investment Operations.............. 6.172 2.790 1.940 1.72
Less Distributions in Excess of Net
Investment Income........................ .007 -0- -0- -0-
------- ------- ------- ------

Net Asset Value, End of the Period............ $22.615 $16.450 $13.660 $11.72
======= ======= ======= ======

Total Return*................................. 37.56% 20.42% 16.55% 17.20%**
Net Assets at End of the Period (In
millions)................................... $ 33.4 $ 10.5 $ 5.2 $ 2.3
Ratio of Expenses to Average Net Assets*...... .85% .85% .85% 2.50%
Ratio of Net Investment Loss to Average Net
Assets*..................................... (.23%) (.11%) (.17%) (1.45%)
Portfolio Turnover............................ 91% 116% 102% 41%**

*If certain expenses had not been assumed by
the Adviser, Total Return would have been
lower and the ratios would have been as
follows:
Ratio of Expenses to Average Net Assets....... 1.23% 2.14% 3.28% 5.40%
Ratio of Net Investment Loss to Average Net
Assets...................................... (.61%) (1.40%) (2.60%) (4.35%)
</TABLE>

** Non-Annualized

<TABLE>
<CAPTION>
Year Ended December 31,
MONEY MARKET PORTFOLIO 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period........ $1.00 $1.00 $1.00 $1.00 $ 1.00
----- ----- ----- ----- ------

Net Investment Income......................... .049 .049 .048 .0533 .0365

Less Distributions from Net Investment Income... .049 .049 .048 .0533 .0365
----- ----- ----- ----- ------

Net Asset Value, End of the Period.............. $1.00 $1.00 $1.00 $1.00 $ 1.00
===== ===== ===== ===== ======

Total Return*................................... 5.02% 5.06% 4.89% 5.46% 3.71%
Net Assets at End of the Period (In millions)... $26.7 $19.7 $19.6 $21.6 $ 28.5
Ratio of Expenses to Average Net Assets*........ .60% .60% .60% .60% .60%
Ratio of Net Investment Income to Average Net
Assets*....................................... 4.88% 4.95% 4.78% 5.33% 3.63%

*If certain expenses had not been assumed by the
Adviser, Total Return would have been lower and
the ratios would have been as follows:
Ratio of Expenses to Average Net Assets......... .99% .98% 1.29% .93% .87%
Ratio of Net Investment Income to Average Net
Assets........................................ 4.49% 4.57% 4.10% 5.00% 3.37%
</TABLE>

28
<PAGE> 29

APPENDIX A --
DESCRIPTION OF
SECURITIES RATINGS

STANDARD & POOR'S -- A brief description of the applicable Standard & Poor's
(S&P) rating symbols and their meanings (as published by S&P) follow:

A S&P corporate or municipal debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.

The debt rating is not a recommendation to purchase, sell, or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.

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

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

1. Likelihood of payment -- capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation:

2. Nature of and provisions of the obligation:

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

1. LONG-TERM DEBT -- INVESTMENT GRADE

AAA: Debt rated "AAA" has the highest rating assigned by S&P. Capacity to meet
its financial commitment on the obligation is extremely strong.

AA: Debt rated "AA" differs from the highest rated issues only in small degree.
Capacity to meet its financial commitment on the obligation is very strong.

A: Debt rated "A" is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rated
categories. Capacity to meet its financial commitment on the obligation is still
strong.

BBB: Debt rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to meet its financial commitment on the obligation.

SPECULATIVE GRADE

BB, B, CCC, CC, C: Debts rated "BB", "B", "CCC", "CC" and "C" are regarded as
having significant speculative characteristics. "BB" indicates the least degree
of speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Debt rated "BB" is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B: Debt rated "B" is more vulnerable to nonpayment than obligations rated "BB",
but the obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.

CCC: Debt rated "CCC" is currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC: Debt rated "CC" is currently highly vulnerable to nonpayment.

A- 1
<PAGE> 30

C: The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued.

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

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

r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk -- such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

DEBT OBLIGATIONS OF ISSUERS OUTSIDE THE UNITED STATES AND ITS TERRITORIES are
rated on the same basis as domestic corporate and municipal issues. The ratings
measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

BOND INVESTMENT QUALITY STANDARDS: Under present commercial bank regulations
issued by the Comptroller of the Currency, bonds rated in the top four
categories ("AAA", "AA", "A", "BBB", commonly known as "investment grade"
ratings) are generally regarded as eligible for bank investment. In addition,
the laws of various states governing legal investments impose certain ratings or
other standards for obligations eligible for investment by savings banks, trust
companies, insurance companies and fiduciaries generally.

2. COMMERCIAL PAPER

A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.

Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. These categories are as follows:

A-1: The highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

A-3: Issues carrying this designation have adequate capacity for timely payment.
They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.

B: Issues rated "B" are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C: This rating is assigned to short-term debt obligations currently vulnerable
to nonpayment and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation.

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

A commercial paper rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained from other sources it considers reliable. S&P does
not perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed, suspended or

A- 2
<PAGE> 31

withdrawn as a result of changes in, or unavailability of, such information, or
based on other circumstances.

3. PREFERRED STOCK

A S&P preferred stock rating is an assessment of the capacity and willingness of
an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which issue is intrinsically different from, and
subordinated to, a debt issue. Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the bond rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.

The preferred stock ratings are based on the following considerations:

i. Likelihood of payment-capacity and willingness of the issuer to meet the
timely payment of preferred stock dividends and any applicable sinking fund
requirements in accordance with the terms of the obligation.

ii. Nature of, and provisions of, the issuer.

iii. Relative position of the issue in the event of bankruptcy, reorganization,
or other arrangements under the laws of bankruptcy and other laws affecting
creditors' rights.

AAA: This is the highest rating that may be assigned by S&P to a preferred stock
issue and indicates an extremely strong capacity to pay the preferred stock
obligations.

AA: A preferred stock issue rated "AA" also qualifies as a high-quality, fixed
income security. The capacity to pay preferred stock obligations is very strong,
although not as overwhelming as for issues rated "AAA".

A: An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

BBB: An issue rated "BBB" is regarded as backed by an adequate capacity to pay
the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.

BB, B and CCC: Preferred stock rated "B", "B", and "CCC" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations.

"BB" indicates the lowest degree of speculation and "CCC" the highest. While
such issues will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

CC: The rating "CC" is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments, but that is currently paying.

C: A preferred stock rated "C" is a nonpaying issue.

D: A preferred stock rated "D" is a nonpaying issue with the issuer in default
on debt instruments.

NR: This indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy. PLUS (+) or MINUS (-): To provide more
detailed indications of preferred stock quality, ratings from "AA" to "CCC" may
be modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

A preferred stock rating is not a recommendation to purchase, sell, or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or unavailability of, such
information, or based on other circumstances.

MOODY'S INVESTORS SERVICE -- a brief description of the applicable Moody's
Investors Service (Moody's) rating symbols and their meanings (as published by
Moody's Investor Service) follows:

1. LONG-TERM DEBT

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or

A- 3
<PAGE> 32

by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

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

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

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

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

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

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

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

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

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

ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.

Should no rating be assigned, the reason may be one of the following:

1. An application for rating was not received or accepted.

2. The issue or issuer belongs to a group of securities that are not rated as a
matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately placed, in which case the rating is not published in
Moody's publications.

Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.

2. SHORT-TERM DEBT

Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issues:

Issuers rated Prime-1 (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will
often be evidenced by many of the following characteristics:

- -- Leading market positions in well-established industries.

A- 4
<PAGE> 33

- -- High rates of return on funds employed.

- -- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

- -- Broad margins is earnings coverage of fixed financial charges and high
internal cash generation.

- -- Well-established access to a range of financial markets and assured sources
of alternate liquidity.

Issuers rated Prime-2 (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or supporting institutions) have an acceptable ability
for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes of the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

3. PREFERRED STOCK

Preferred stock rating symbols and their definitions are as follows:

AAA: As issue which is rated "AAA" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.

AA: An issue which is rated "AA" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.

A: An issue which is rated "A" is considered to be an upper-medium-grade
preferred stock. While risks are judged to be somewhat greater than in the "AAA"
and "AA" classifications, earnings and asset protections are, nevertheless,
expected to be maintained at adequate levels.

BAA: An issue which is rated "BAA" is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.

BA: An issue which is rated "BA" is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.

B: An issue which is rated "B" generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.

CAA: An issue which is rated "CAA" is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payments.

CA: An issue which is rated "CA" is speculative in a high degree and is likely
to be in arrears on dividends with little likelihood of eventual payment.

C: This is the lowest rated class of preferred or preference stock. Issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

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

A- 5
<PAGE> 34

FOR MORE INFORMATION

EXISTING SHAREHOLDERS OR PROSPECTIVE INVESTORS
Call your broker or (800) 341-2911
7:00 a.m. to 7:00 p.m. Central time Monday through Friday

DEALERS
For dealer information, selling agreements, wire orders, or redemptions, call
the Distributor at (800) 421-5666

TELECOMMUNICATIONS DEVICE FOR THE DEAF
For shareholder and dealer inquiries through Telecommunications Device for the
Deaf (TDD), call (800) 421-2833

FUND INFO(R)
For automated telephone services, call (800) 847-2424

WEB SITE
www.vankampen.com

VAN KAMPEN LIFE INVESTMENT TRUST
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Investment Adviser

VAN KAMPEN ASSET MANAGEMENT INC.
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Distributor

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Transfer Agent

VAN KAMPEN INVESTOR SERVICES INC.
PO Box 218256
Kansas City, MO 64121
Attn: Van Kampen Life Investment Trust

Custodian

STATE STREET BANK AND TRUST COMPANY
225 West Franklin Street, PO Box 1713
Boston, MA 02105-1713
Attn: Van Kampen Life Investment Trust

Legal Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, IL 60606

Independent Accountants

PRICEWATERHOUSECOOPERS LLP
200 East Randolph Drive
Chicago, IL 60601
<PAGE> 35

[VAN KAMPEN FUNDS LOGO]

Investment Company Act File No.
811-4424.
LIT ALL SECDIR 7/99

VAN KAMPEN
LIFE INVESTMENT TRUST

PROSPECTUS
APRIL 30, 1999,
AS SUPPLEMENTED ON JULY 15, 1999.

A Statement of Additional Information, which
contains more details about the Trust and its
Portfolios, is incorporated by reference in
its entirety into this prospectus.

You will find additional information about the
Portfolios in their annual and semiannual
reports to shareholders. The annual report
explains the market conditions and investment
strategies affecting the Portfolios'
performance during its last fiscal year.

You can ask questions or obtain a free copy of
the Portfolios' reports or the Statement of
Additional Information by calling (800)
341-2911 from 7:00 a.m. to 7:00 p.m., Central
time, Monday through Friday.
Telecommunications Device for the Deaf users
may call (800) 421-2833. A free copy of the
Portfolios' reports can also be ordered from
our web site at www.vankampen.com.

Information about the Trust and its
Portfolios, including the reports and
Statement of Additional Information, has been
filed with the Securities and Exchange
Commission (SEC). It can be reviewed and
copied at the SEC Public Reference Room in
Washington, DC or online at the SEC's web site
(http://www.sec.gov). For more information,
please call the SEC at (800) SEC-0330. You can
also request these materials by writing the
Public Reference Section of the SEC,
Washington DC, 20549-6009, and paying a
duplication fee.